Is any kind of tax increase possible for this legislative session?
The House appropriations bill, scheduled for debate this weekend, would cut out the $10 million-a-year anti-smoking campaign, which remains a legacy of the state’s 1998 tobacco settlement.
To save the anti-smoking effort, Rep. Carol Alvarado, D-Houston, is pushing a bill to increase the state cigarette excise tax by $1.05 per pack.
“It doesn’t take a whiz to figure out we’re spending a lot because of a product that contributes to all those expenses,” she said. “We need the money. We can’t have a cuts-only approach, and it’s not a new tax. It’s not something that affects the masses.”
If passed, the state’s excise tax would rise from $1.41 to $2.46 a pack. The tax increase would generate about $375 million a year in extra revenue for Texas, according to Legislative Budget Board estimates. Alvarado proposes to use $25 million a year for anti-smoking programs and the remainder for property tax cuts.
Raising the state’s excise tax from $1.41 to $2.46 a pack would still leave at least eight states with higher cigarette taxes. It cost Texans $1.6 billion a year to cover Medicaid costs for smoking-related illnesses, according to 2004 data compiled by the Campaign for Tobacco-Free Kids.
To be clear about something, recall that the 2006 property tax cut wasn’t just financed by the business margins tax. There was also a one dollar increase in the excise tax on cigarettes, which contributed a smaller but still significant amount to the balance sheet. Where the article says that funds from Rep. Alvarado’s proposed increase would go towards “property tax cuts” after paying for the anti-smoking programs, that’s what it means. It would be a small step towards closing the gap between the cost of that property tax cut and the revenues being raised to pay for it.
[House Ways and Means Committee Chair Harvey] Hilderbran said Alvarado does not have enough support in his committee to recommend a cigarette tax increase “at this time.”
“But things change, so if she get the votes for it, I’ll be happy to consider bringing it up (for committee action)” Hilderbran said.
That’s better than a flat out “No”, but I wouldn’t be too optimistic about its chances. But to answer the question I started with, if any kind of tax increase is possible this session, this would be it.