Cigarette Tax Definitely Still on the Table, Senate Tax Chair Says

by Kathleen Haughney
The News Service of Florida

The chair of the Senate's tax and finance committee said a higher state cigarette tax is still on the table for Florida even though President Barack Obama has signed a 62 cent increase in the federal tobacco tax.

“Absolutely. It's more than a revenue issue,” said Sen. Thad Altman, R-Viera, chairman of the Senate Finance and Tax Committee. “We hope that it does reduce smoking. You know, I think in terms of discussion in terms of tax reform, just about everything is on the table.”

{sidebar id=1}Many Democrats pushed for a $1 increase in the cigarette tax during the special session last month, but Republicans shot down the proposal, saying it was not the time to raise taxes. But now, as lawmakers begin looking at next year's budget, more and more are saying they cannot ignore ways to raise revenue. State economists have already projected that the state will have about $4 billion less to fund schools, health care and other government programs.

“I truly believe that Florida, the future of our state, is jeopardized by the lack of revenue,” Altman said. “We must reform our tax system and we've never had our back against the wall the way we do today.”

The state cigarette tax is currently 33.9 cents per pack of common-sized cigarettes. In November 2008, state economists projected that raising the cigarette tax by $1 would bring in just more than $1 billion per year in revenue.

Lawmakers are also looking at a variety of other tax reforms to bring in extra revenue including the closure of some tax exemptions.

Altman's House counterpart, Rep. Dean Cannon, R-Winter Park, told members of the House Tax and Finance Council to analyze the state's sales tax exemptions and report back to him. And Altman said the Senate committee is also beginning to look at criteria on how to address tax exemptions that may not be stimulating the economy and could bring in more revenue.

A Senate staff analysis says the state is potentially missing out on $12.3 billion in tax exemptions. But many of those exemptions -- such as those on groceries, electricity and prescription drugs – will likely not be lifted.

Sen. Jeremy Ring, D-Fort Lauderdale, cautioned that the committee must be careful not to hurt business, although he noted that there may be several exemptions that could be eliminated without any harm to enterprise.

“I contend that if we repeal charter fishing boats [exemptions], people aren't going to go to California to go charter fishing,” he said.

This article originally published on February 6, 2009.

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