Wednesday, December 17, 2008
Orlando Sentinel

TALLAHASSEE — There seems to be growing momentum in the Capitol for raising Florida’s 34-cent cigarette tax as one way to deal with the state’s deepening financial crisis — but a new estimate indicates smokes might not provide the budget boost once envisioned.

A $1 hike in the state cigarette tax — to $1.34 per pack — is now expected to bring in $700 million in extra revenues, said Amy Baker, the Legislature’s chief economist. That’s down sharply from last spring’s estimate that put the expected windfall to state coffers at $1 billion.
“People change their spending habits” in a recession, Baker said. “They might have bought some name brands or some sort of deluxe version of cigarettes before, but now they’re going to basics, the generic cigarettes.”

Even at 34 cents a pack, state revenues from cigarette taxes are declining. This year, the tax is expected to bring in $400.8 million — down from a high of $439.2 million in 2005. Next year, left unchanged, cigarette tax revenues are projected to decline slightly to $398.7 million.

Florida’s cigarette tax, the sixth-lowest in the nation, hasn’t changed since 1990. Yet year-after-year attempts by statehouse Democrats and health-care organizations like the American Lung Association to raise it have been stymied by the Legislature’s Republican leaders. Two South Florida Democrats — Sen. Ted Deutch, D-Boca Raton, and Rep. Jim Waldman, D-Coconut Creek — have filed the $1-per-pack increase for the 2009 session.

“Certainly (the cigarette tax increase) will be discussed and debated — and we need to know all the facts,” said House Majority Leader Adam Hasner, R-Boca Raton. “A new fact came into play today, which is that it’s not $1 billion, it’s $700 million.

“If the goal of the cigarette tax is to get people to stop smoking, that’s a goal we should pursue,” he added. “If the goal of the cigarette tax is to balance the budget and raise revenue, then we need to examine and determine if that’s a revenue source that’s going to be reliable. If you relied on that $1 billion, you’d have a $300 million shortfall before you got out of the gate.”