Potential cigarette tax decreased in committee
Tax dropped to 39.5 cents, local tobacco vendors said O'Bannon's proposal was unfair.
by Hilary Brinson, Staff Reporter
Gov. Frank O'Bannon's proposal to raise cigarette taxes by 50 cents a pack has gone up in smoke.
According to the Associated Press, democrats in the House Ways and Means Committee voted 16-0 to send a new bill to the House that would raise the tax by 39.5 cents a pack.
Committee Chairman B. Patrick Bauer, D-South Bend, told AP that O'Bannon supported the change, and he said he thinks the public will too.
"I think the public is now more aware of the problems that face the state," Bauer said.
Committee Republicans said they needed more time to consider the bill and did not vote.
"The revenue shortfall for Indiana is pretty dramatic," said Cecil Bohanon, a professor of economics. "We are in a position now that if nothing was done about the shortfall, the state would likely go bankrupt by 2003."
If the proposal, in any form, passes, the tax increase will go into effect on March 15.
The tax, combined with other elements of the bill's proposal, could create an extra $382 million a year in revenue.
"In Indiana there always has been a strong resistance to raising taxes and there are other alternatives to this proposal, such as spending cuts, which could be passed just as easily," Bohanon said.
The modified plan is still being discussed among legislators, but Hoosier citizens had formed their sides about O'Bannon's proposal.
Supporters say there is an obvious advantage to the proposal. Some smokers will drop the habit because of higher prices, they said.
Indiana's teen-agers buy about 20 million packs of cigarettes each year, but proponents say the increase would keep 48,000 young people from smoking.
"I like the idea of higher taxes," said Dr. Donna Wilkins, county health officer for the Delaware County Health Department. "Fewer people, especially teenagers, would be buying cigarettes, and hopefully some of the tax money could be used for smoking-cessation programs."
Ball State students who smoke and cigarette vendors agree they might have to quit, though they are not as enthusiastic.
"As college students, we'll probably almost have to quit," said freshman Amber Kirby. "We don't have money to start with, so if we keep buying cigarettes at a higher price than they already are, we'll end up completely broke."
"They are saying that if the proposal passes, it will cut down on the amount of young people who smoke, but we card here and I know of a lot of other places that do the same so those young people can't buy anyway," said Ann Hoy, the manager of the Low Bob's Tobacco Town, 213 S. Tillotson Ave. "I think we are being penalized unfairly and so are the adult consumers.
"I think our business will be hurt, but there will always be the loyal
smokers. Those are the ones we will have to depend on if the proposal gets
passed," Hoy said.
Others think that if the proposal passes, smoking will decrease, though not by a significant amount.
"If taxes increase, people will cut down on smoking but there won't be a huge impact," said Dustin Hoover, a Village Tobacco employee. "We sell singles here and if the taxes increase, we'll just have more customers buying those and cheaper cigarettes."
According to the Indiana Tobacco Use Prevention and Cessation Executive Board, cigarette taxes have not increased in Indiana since 1987, when it was increased to 15.5 cents per pack.
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