LINCOLN — Smokers would pay more taxes while property taxpayers would get some relief under a bill introduced in the Nebraska Legislature on Friday.
Legislative Bill 1013 would increase cigarette taxes by $1.50, boosting the state tax total to $2.14 per pack.
State Sen. Mike Gloor of Grand Island, the bill's sponsor, said the tax change would bring in an estimated $120 million.
He is proposing to put $45 million into the state's Property Tax Credit Fund and use another $45 million to increase the personal property tax exemption.
An additional $30 million would be added to the state's Health Care Cash Fund for a variety of health programs.
Gloor said the tax increase would offset some of the costs to state government — and state taxpayers — from tobacco use.
Smoking-related health problems account for $162.3 million of the state Medicaid budget, he said, and smoking claims 2,500 lives per year.
"I know the impact of this on state coffers," he said. "It seems this is a fairness issue."
Gloor said the tax increase also would encourage more Nebraskans to quit smoking, which would reduce future health costs.
"My proposed increase ... will help us take a big step toward reducing heart disease, lung disease and cancers caused by smoking and tobacco use," he said.
David Holmquist, a lobbyist for the American Cancer Society Cancer Action Network, estimated that the tax increase could keep 12,100 young people from getting addicted to tobacco and push 12,300 adult smokers to quit, thus saving 7,000 lives.
"Tobacco control is a vital component of a healthy state," he said.
Nebraska's current cigarette tax ranks 40th among the 50 states and the District of Columbia, according to the Campaign for Tobacco Free Kids.
Gloor said the most recent increase in the cigarette tax was in 2002. At that time, the increase pushed Nebraska's cigarette tax into the top quarter of states.
Since then, 47 states and the District of Columbia have raised their cigarette taxes. The highest state rate is $3.75 in Rhode Island. The lowest is 17 cents in Missouri. In Iowa, the cigarette tax is $1.36.
Gloor said he could not predict how his proposal would fare this year. It is his third attempt to increase the cigarette tax. Bills introduced in 2011 and 2013 never made it out of committee, even though he made the 2013 proposal his priority for the year.
"We're going to raise the tobacco tax sometime, unless we aspire to be the bottom-ranked state in the nation," he said.
Past efforts ran into opposition from convenience stores, which argued that an increase would lead to the loss of sales, and from those who oppose any tax increases.
LB 1013 would not apply to electronic cigarettes. Gloor said the state does not levy excise taxes on those devices.
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