OKLAHOMA – A controversial plan devised to shrink the state’s massive budget shortfall is now headed to the floor in both the House and the Senate.
It’s the major hike on tax on cigarettes.
Smokers are looking at paying an extra $1.50 for each pack of cigarettes.
Lawmakers in support of the bill think it could add up to more than $180 million in revenue next year, but opponents said it’s just another tax on the poor and simply not enough to chip away at our massive budget shortfall.
“We’ve got to do some things to raise money for the state,” Sen. Yen. “We have to.”
Senators debated two hours Tuesday afternoon over a big tax hike on cigarettes.
Right now, smokers pay a tax of $1.03 on every pack of cigarettes.
The bill would hike that tax another $1.50 to $2.53 per pack.
“I think it will decrease the number of smokers that we have in Oklahoma. Will it be huge? I don’t know, maybe not, but I think it will decrease it somewhat and, as a physician, I see on a daily basis what cigarette smoking does to Oklahomans,” Yen said.
Because of the budget crisis, the state Medicaid agency expects to cut provider rates by 25 percent.
The money generated from the cigarette tax hike would go to a so-called ‘healthcare revolving fund’ to help knock those rates down.
“If tobacco is such a bad thing, then we should tax all types of tobacco or make it illegal, but we don’t. What we’re doing is we’re specifically saying those on the lower end of the income scale that do smoke, we’re going to target you,” said Sen. Loveless.
Opponents said not only does the tax hike target the poorest Oklahomans, but the bill was voted on before other tax hikes that would make a bigger impact, like wind energy.
“It hurts the poor, it hurts senior citizens, so we want to make sure some of those other groups come to the table first,” said Sen. Marty Quinn.
And, the hike could just encourage Oklahomans to go out of state or to tribal land to get cigarettes on the cheap.
The hike could raise $180 million next year.
It could raise $120 million this year, because it wouldn’t go into effect until September 1.
The bill needs a majority vote to go to the governor’s desk.