N.C. Chief Wants Increase In Smoke Tax

In his final budget proposal as an officeholder, North Carolina Gov. Mike Easley wants lawmakers to raise the state tax on cigarettes from 35 cents per pack to 55 cents, mainly to boost teacher salaries to the national average and repair the state’s mental health system, The Associated Press reported.

Easley’s $21.5 billion spending plan calls for raising taxes on beer as well, with the per-can increase going from 5 cents to 9 cents, as well as from 22 cents to 25 cents for a bottle of most wines, the news service reported.

A two-term Democrat barred from seeking a third consecutive term in November, Easley said the $160 million raised annually by the new taxes would keep North Carolina’s education system strong and provide for the state’s most vulnerable citizens.

Legislative leaders expressed skepticism at the idea of proposing tax increases during an election year.

Easley wants to raise the cigarette tax to generate $99 million to help pay for an average teacher raise of 7%. Other state employees would get a raise of 1.5%, plus a one-time bonus of $1,000. The governor pledged in 2005 to raise the average teacher salary above the national average in four years. The average salary for a teacher with 15 years of experience in North Carolina is $46,319, compared with the national average of $49,520.

“We just didn’t see any way to get there without some revenue increase,” Easley said.

In 2005, Easley and North Carolina legislators agreed to raise the cigarette tax from 5 cents to 35 cents by mid-2006. It now ranks 45th among the states and the District of Columbia. Raising it another 20 cents would keep it less than half the current national average of $1.14 per pack, Easley said.

The beer and wine tax has not changed in North Carolina in more than 25 years, but “we just don’t feel like it’s right time to tack on an 80% increase to tax on beer,” already one of the highest in the nation, said Dean Plunkett, executive director of the North Carolina Beer and Wine Wholesalers Association.

Proceeds from the increased alcohol tax would be used to pay for local mental health crisis teams, hire more psychiatrists and nurses at state mental hospitals, build more housing for the mentally ill and assist veterans with their mental health care needs.

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