The South Targets Tobacco

State budgets always are at the heart of state politics, but even more so than usual during a recession, when legislators face vexing choices as ...
by | March 25, 2009

State budgets always are at the heart of state politics, but even more so than usual during a recession, when legislators face vexing choices as to how to raise taxes and/or cut spending -- choices that will inevitably become fodder for campaigns in the months ahead. This year, we're seeing more talk about raising taxes than normal, but also the standard wariness from legislators concerned about their political future.

In this context, something interesting is happening: The South is falling in love with cigarette tax increases.

Arkansas and Kentucky have already approved tobacco tax hikes this year. South Carolina and Mississippi seem likely to do so too. In the nation's tobacco growing region, where most states have smoking rates above the national average, legislators are betting that it's politically safe to increase tobacco taxes -- or at least politically safer than the alternatives.

While the development is somewhat surprising, the legislators instincts are probably right. Without a doubt, an increases in broader-based taxes (income, sales, gas) would raise more hackles than a cigarette tax hike. Even in the conservative South, it might be safer than severe budget cuts in areas like public education.

Southern states' tobacco taxes generally are far lower than the rest of the country, so Southern smokers who have paid a visit to, say, New York, will still understand that they're still getting a bargain. Legislators are selling these tax hikes as ways to increase spending on public health, while reducing youth smoking.

Still, as the Associated Press notes, sin taxes do come with some political risks:

LAWRENCEBURG, Ky. - Faced with huge budget holes, states from Connecticut to Arkansas are eyeing higher taxes on cigarettes and booze, infuriating consumers who say the goods are the last vices they've got to help cope with lost jobs, a deepening recession and overall economic misery.

In Pittsburgh, protesters dumped beer and liquor into a river after county officials approved a 10 percent tax on poured drinks. Patrons in Oregon bars downed brews while writing lawmakers to oppose a proposed beer tax increase. And in Kentucky, protesters poured bourbon on the Capitol's front steps to demonstrate their opposition to a 6 percent sales tax on all booze.

Josh Goodman
Josh Goodman  |  Former Staff Writer
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