Beebe Hints at Cigarette Tax and Other Notes Ahead of Next Week’s Legislative Session

Arkansas Business Editor Gwen Moritz files this report from a meeting today between jouralists and legislative leaders ahead of next week’s legislative session.

At the meeting, Gov. Mike Beebe, Rep. Robbie Wills, D-Conway, and Sen. Bob Johnson, D-Bigelow fielded questions from journalists. The mid-day meeting was sponsored by the Arkansas Associated Press Managing Editors Association, the Arkansas Associated Press Broadcasters Association and the Arkansas Pro Chapter of the Society of Professional Journalists. (John Brummett also blogs about the meeting here.)

According to Moritz’s report, the lottery remains top of mind with Wills and Johnson, while Beebe is more concerned with funding a statewide trauma system and other needs. He hints that his State of the State speech next Tuesday might include an increase in the tax on cigarettes to pay for the trauma system.

The idea of funding the trauma system with a significant increase in the state tax on cigarettes appears to be gaining traction. An additional tax of 50 cents per pack would generate $71 million to $73 million per year, Beebe said, far more than enough for the trauma system, which would require about $28 million a year to start.

And that figure assumes that there will be some reduction in cigarette sales as a direct result of the higher price.

Increasing the cigarette tax would require a 75 percent supermajority vote of both houses of the General Assembly. While Johnson pointed out the problem of funding an increasing obligation with a decreasing source of revenue, he also said that tobacco industry lobbyists might consider a legislative solution to be a lesser evil than an initiated act.

More on the trauma system, the lottery and more here.


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