Smokes could get tax hike

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By Nathan L. McBroom

As Ray Feinberg checked out a customer at Cox's Smoker Outlet on Thursday, he encouraged them to sign a petition that urges Governor Steve Beshear to oppose a proposed tax increase on tobacco products.

"No matter what you raise the tax on tobacco it's going to affect the industry," he said.

On Wednesday, the House of Representatives passed a $19 billion budget that relies on a tax increase on tobacco products, gasoline and other services to raise needed revenue.

The legislation, House Bill 262, would increase the tax on a pack of cigarettes from 30 cents to 55 cents per pack.

The bill was narrowly approved by a 50-45 vote.

It is unlikely that Beshear will oppose a tax increase on tobacco - earlier this year he laid out a budget that called for a tax increase of 70-cents per pack.

Feinberg, the manager of Cox's Smokers Outlet in Shelbyville, said both the 75-cent increase and the 25-cent increase would drastically affect his business.

With the soaring price of gas and other commodities, Feinberg said the tax increase on cigarettes would force more people to quit smoking.

Sheri Stiger said that while tax increase would not make her stop smoking, it would hurt her pocketbook.

Stiger, who along with close to 300 people have signed the petition locally, said the tax is not fair.

On the petition, smokers are asking Beshear to "look out for the citizens who elected you on the belief that you would not do to them what Ernie Fletcher did."

The vote on Wednesday was largely split down party line with only three Republicans voting for it.

State Rep. Brad Montell was one of 32 Republicans who voted against the measure.

He said the measure has serious shortfalls.

"I didn't think that raising taxes was the way to raise the funds the state needs," he said.

Instead of raising taxes, Montell would like to see the legislature suspend the prevailing wage rate for public project. He said this could save the state millions over the next two years.

While such taxes are sometimes seen as a way of keeping consumers from smoking, Montell, a non-smoker, said if that is what the legislature is trying to do, then the tax would need to be much higher.

"I think this was more about how much money can we get than about how many lives can we save," he said.

He said he and other Republicans supported an amendment to the bill that would remove the increase after two years. The amendment narrowly failed, he said.

While the tax and budget bill passed the House, it may have a tougher time in the Senate. Sen. Gary Tapp said with the economy slowing down a bit, he is hard pressed to support a tax increase.

"Sometimes we in government should live like we do at home -- if we don't have the money we shouldn't spend it," he said. "With these tough economic times, I don't know how we can conscientiously raise taxes."

Paul Hornback, a local farmer, said state governments across the nation often look to fix budget woes by taxing cigarettes.

"I think it's amazing that they pick one product, that is a legal product, and try to make the budget from that one product," he said.