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Arkansas Senate passes tobacco tax increase

LITTLE ROCK—The Arkansas Senate approved raising cigarette taxes by 56 cents a pack Thursday and increasing other tobacco taxes to pay for a statewide trauma system and a host of expanded health programs.

All that is needed is Gov. Mike Beebe’s signature, and his office is planning a signing ceremony for next week. The tax increase would be effective March 1.

Beebe had proposed the $87.8 million tax increase as a way for to pay for health improvements statewide. Thursday’s vote was 28-7, giving Beebe a vote to spare.

Arkansas’ increase is on top of a 62-cent-a-pack federal excise tax signed into law last week.

State officials have said the Arkansas tax increase, when combined with federal matching dollars, would pay for nearly $180 million in expanded health programs.

“This bill ... will provide much needed revenue to put Arkansas on the course to save lives and make our health care system better for all Arkansans,” said the sponsor, Sen. Tracy Steele, D-North Little Rock. “There are few opportunities we have as public servants and legislators to actually save lives.” Among those voting in favor was Sen. Terry Smith, a Hot Springs Democrat who had voted against the bill in committee but realized later it would pass the Senate. “I just wanted to be on the train,” Smith said. Only one senator rose to speak on the floor against the tax increase. Sen. Johnny Key, R-Mountain Home, said the nation’s worsening economy and the recently passed federal cigarette tax increase made it a bad time to raise the state tax.

“In this economic environment in our state and our nation, we’re facing a tax increase at the federal level and now we want to put a tax increase at the state level,” Key said. “I think it’s the wrong time to do that.”

During debate last week in the House, one member heckled another from the floor and one opponent of the tax compared lobbying by backers to torture.

When the increase takes effect next month, the state’s cigarette tax will rise to $1.15 per pack, ranking it 25th in the nation, according to the Campaign for Tobacco-Free Kids. The legislation would also raise the tax on other tobacco products — such as cigars and pipe and chewing tobacco — from 32 percent of the wholesale price to 68 percent.

The proposal would send the new tax money into the state’s general revenues. Steele has filed legislation that would establish the statewide trauma network that will be funded by the money.

Beebe has proposed using the new revenue to expand the ARKids First health insurance program for low-income children by changing the income eligibility, a move that will open it up to about 8,000 more children. Other programs that Beebe has called for funding with the tobacco tax money is a northwest Arkansas campus for the University of Arkansas for Medical Sciences, community health centers and a statewide flu shot campaign. The programs that will be funded aren’t spelled out in the bill, a move that Beebe defended on Thursday.







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