Cigarette Tax Hike Would Help Budgets

State agencies that are funded out of Alabama's General Fund budget are hurting, and that means the services provided by those agencies -- including Medicaid and the state's program that provides health insurance for children living in poverty -- soon could be hurting as well.

There is a way to avoid some of the worst effects of those budget problems without dramatically affecting the state's economy and while making the state much healthier over time - by rising the state's taxes on cheap cigarettes.

"It's the most catastrophic budgetary time in the General Fund we've ever had in Alabama," Gov. Robert Bentley said Friday.

Bentley said that it is likely the current General Fund budget will have to be cut through probation by as much as 15 percent, and that the General Fund budget for the fiscal year that begins Oct. 1 may have to be reduced by an additional 15 to 20 percent or possibly even more.

If that happens, expect layoffs and major cuts to many services provided by state government. But by increasing the price of a pack of cigarettes by $1, the state could raise about $200 million a year, according to state health officials. Just as importantly, such an increase would reduce adult tobacco smoking by about 3 percent and the rate of smoking among teenagers by a whopping 6 percent.

If only for health reasons, the state should increase the tax on cigarettes and other tobacco products. But there may never be a better time to do it, since the need for additional revenues is huge.

Alabama currently taxes cigarettes at 42.5 cents per pack, ranking the state 47th in the nation. If Alabama raised its tax per pack by $1, it would still be below the current national average of $1.45 per pack, according to figures from the Campaign for Tobacco-Free Kids. Several states currently are considering tobacco tax increases, so it is likely that even with the higher rate Alabama would remain even further below the national average.

It would not be easy to raise the tax. Tobacco company lobbyists would descend upon the Legislature in droves. But it is still the right thing to do.

The Legislature should not just rise the best cigarette tax. Similar taxes should be imposed on other tobacco products so that teens don't turn from cigarettes to smokeless tobacco, for instance. Smokeless tobacco causes different kinds of cancers from cigarettes, but it is still addictive and stills a major health risk, especially for those who start the habit as teens.

A cigarette tax would not prevent all of the predicted budget cuts in the General Fund for this year and next year. There still would be the need to institute new efficiencies in government.

However, an infusion of $200 million could offset much of the effects of probation for this year. It could save lots of state jobs. It could protect Medicaid and children's health insurance, and lessen budget cuts for other agencies.

But most important, a tobacco tax increase would save lives. And that is the main reason it should be done.

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