tobacco in the crossfire

Cigarette tax increases in Oregon and Tennessee.

Oregon and Tennessee state lawmakers are combating the proposed rate increases on cigarette taxes. Oregon House Republicans are raising questions about using a state cigarette tax to pay for children’s health insurance.

In response, Oregon Senate Democrats are turning to voters and proposing a ballot measure under which the cigarette tax hike, known as the “Healthy Kids” plan, would be subject to voters to become a constitutional amendment.

The House defeated the Democrats’ proposed 84.5-cent-a-pack cigarette tax hike last month. The proposal would have created funds for health coverage for Oregon’s 117,000 uninsured children.

Down in Tennessee, the Senate Finance Committee amended Gov. Phil Bredesen’s bill to slice his proposed 40-cent cigarette tax increase in half to 20 cents per pack. The amendment doubled the wholesale tax on other tobacco products such as cigars and chewing tobacco from the current 6.6 percent to 13.2 percent.

Doubling the wholesale tax on other tobacco products in Tennessee could supply an additional $9.1 million annually to the state, in addition to the $120 million that the 20-cent cigarette tax hike is estimated to raise. Bredesen’s proposed 40-cent increase could raise about $220 million, which he plans to spend on K-12 and higher education, as well as agricultural enhancement grants.

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