LINCOLN — Huddled in his pickup truck for warmth, just after flicking ash from his cigarette through a narrow slit in the driver's-side window, Jon McQuillan voiced an immediate reaction to the idea of tripling the state's tax on tobacco products.
“I think it (stinks),” said the 27-year-old landscape contractor, as he sat parked outside a Lincoln coffee shop.
McQuillan, who smokes a pack a day, is probably in the minority.
A poll of 500 likely Nebraska voters, commissioned by the American Cancer Society and released Tuesday, found that 73 percent of respondents favored a $1.35-a-pack increase in taxes on cigarettes.
Even some smokers — who now constitute less than 17 percent of all Nebraskans — say they'd be OK with paying nearly $2 a pack in state taxes.
“I'd rather pay that because it's my own habit, rather than have it tacked on another tax like sales or income,” said Mandi Maser, a 33-year-old office worker in Lincoln. “It might make me quit.”
It will soon become clear whether state senators also have an appetite for raising such taxes.
The issue is bound to come up this year because the state faces a monumental budget problem. State lawmakers either have to cut spending, raise taxes or select a combination of the two to close a $986-million gap between anticipated state tax revenue and the current cost of running state government.
Gov. Dave Heineman and several state senators have pledged to close the gap without raising any taxes. They plan to cut spending and eliminate programs.
But most senators agreed it's too early to completely rule out some kind of state tax or fee increases to help fill the budget hole.
Keep an eye on the cigarette tax idea. An increase in the so-called “sin tax” wasn't immediately snuffed out Tuesday when about 10 state lawmakers were asked about it.
Even conservative Hastings Sen. Dennis Utter, known for saying “no” to tax-hike ideas in the Legislature's Revenue Committee, said he'd be willing to “look at it.”
The idea of a higher tobacco tax is being pushed by the Cancer Society and by Sen. Mike Gloor of Grand Island, a former hospital administrator keen on health issues.
Gloor plans to introduce a bill later this week that would increase the state tax on a pack of 20 cigarettes from 64 cents to $1.99. Taxes on other tobacco products, except snuff, also would triple under his proposal.
“Sin taxes” are a popular option with lawmakers when money is short. The last time Nebraska faced a fiscal problem, in 2002, was the last time tobacco taxes were increased.
“Increasing sin taxes is easy because it's popular — there's usually an advocacy group willing to support it,” said Sen. Abbie Cornett of Bellevue, who heads the Revenue Committee.
Iowa recently raised taxes on liquor to help salve its budget woes. More than two dozen states, including Kansas, looked at raising tobacco taxes last year.
In the case of cigarette taxes, Gloor said it's a health issue for him more than a budgetary issue. A significant increase in tobacco taxes, he said, would encourage adults to quit and discourage teenagers from picking up the habit.
Gloor said reducing smoking would reduce by hundreds of millions of dollars the state's long-term expenses for caring for low-income people with smoking-related diseases.
“My whole career has been devoted to improving people's health,” he said.
He acknowledged that some senators will support his bill because it will generate an estimated $73 million in new state tax revenue. About half of that would ensure that funding for smoking cessation programs is maintained and that private providers of health care services for the elderly and poor don't see cuts in reimbursement rates. The other half would be used for other governmental services.
In the end, the state's “economic health” also would be aided, said Dave Holmquist, the Cancer Society's lobbyist.
The state's current tobacco tax is relatively low. The cigarette tax is 37th among all states and lower than any neighboring state except Missouri, where only 17 cents is charged on a pack of cigarettes.
Gloor's bill would push Nebraska up to 15th on the list, ahead of all neighboring states, according to a July 2010 survey by the National Conference of State Legislatures.
Gloor said he doesn't know whether support in the Nebraska Legislature mirrors the 73 percent public approval seen in the Cancer Society poll.
Any tax hike proposal likely will need support from 30 of the 49 state senators to overcome an expected veto by the governor.
But only one of about 10 state senators polled Tuesday gave the idea a flat “no.”
“This hits the working class, the normal laborer, who's having a hard time already,” said Wilber Sen. Russ Karpisek. “Maybe we should be looking at taxing golf and spas. That impacts affluent people.”
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