MONTGOMERY, AL - Alabama lawmakers have ushered in 2012 with two proposals to raise state cigarette taxes, one by 32.5 cents per pack and one by $1 per pack, the Birmingham News reports.
The proposals are aimed at chipping away at an estimated $400 million shortfall in the state€™s general fund next fiscal year.
State rep. Patricia Todd filed a bill that would raise the tax 32.5 cents per pack, an increase she estimated would generate $75 million a year in revenue for the state. She has proposed a cigarette tax increase every year since 2008, and each one has failed.
Republicans control Alabama€™s Senate and House, and several top-ranking Republicans said they doubted the Legislature would approve a cigarette tax increase in 2012. Todd, however, is hopeful.
"I think we'll have a better shot this year, because of the budget being so bad," Todd said. "I think we have chopped everything we can chop."
State rep. Joe Hubbard€™s bill seeks to increase the tax $1 a pack, which would raise an estimated $230 million a year, all earmarked for the state€™s Medicaid agency, according to the Legislative Fiscal Office.
"This is not an unfair tax. It is a tax on the people who engage in activity that costs every taxpayer," Hubbard said. "My goal here is not to raise taxes. My goal is to make sure we provide necessary services, and that if we must raise revenue, we do so in a way that the revenue is raised fairly and raised responsibly."
David Sutton, a spokesperson for Philip Morris USA, said it would be unfair to tax a minority of taxpayers to fill a revenue shortfall.
"You're talking about a tax increase on one segment of the population to provide funding to the general fund, which benefits the entire population of the state," Sutton said. "That's an issue of taxing equity."
Sutton also said raising Alabama€™s cigarette tax would encourage smokers to cross state lines to purchase cigarettes, which would impact sales at state convenience stores.
Alabama€™s current state cigarette tax is 42.5 cents per pack, the fifth lowest among the 50 states, according to the National Conference of State Legislatures.