Arkansas Lawmakers Consider ‘Aggressive’ Tobacco Tax Increase

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LITTLE ROCK, Ark. – Arkansas smokers could soon pay more for a pack of cigarettes.

The American Cancer Society Cancer Action Network asked the legislature’s Tax Reform and Relief Task Force Wednesday to more than double the tobacco tax per pack.

“This is the opportunity to better our state’s health,” Michael Keck, the organization’s governmental relations director, told lawmakers. 

Keck wants the panel to consider increasing the tax by $1.50 per pack.

According to the Arkansas Department of Finance and Administration, the current $1.15 tax generates more than $165 million in revenue. Keck argues his $2.65 proposal would give the state an extra $121 million a year.

“In five years, we’ll save more than a billion dollars in long-term health costs,” he said.   

In summary, Keck argues an increase in the tax is essentially a decrease in lung cancer. Arkansas ranks the third highest in the country for adult smokers, while its youth smoking rate is more than double the national average. 

“An aggressive tobacco tax would allow us the opportunity to reverse that trend, encourage people not to start smoking and encourage people to quit smoking who have already started,” Keck said.

Members of the task force had some reservations. Co-chair Sen. Jim Hendren, R-Gravette, asked Keck if Arkansas would lose business to neighboring states with lower taxes, like Missouri.

“Are the people just going to go across the border and develop a huge black market?,” Hendren said.

Keck gave the senator examples of several other states that increased their tobacco tax and exceeded revenue projections. He seemed confident any adverse effect would be temporary.

Other lawmakers believe it’s only fair to put alcoholics under the same microscope.

“If we’re going to hold one part of society accountable on the basis that what they’re doing is increasing costs to the taxpayers, then I think we need to apply that equally across the board,” Rep. Kim Hammer, R-Benton, told his colleagues.

The debate continues at the capitol Thursday, where more of the politics could come into play.

“I don’t expect the tobacco industry to stand up and say, ‘We’re in favor of this,'” Keck said. “I fully expect them to fight it.”

Rep. Bob Johnson, D-Jacksonville, plans to suggest the task force further study both alcohol and tobacco taxes ahead of their initial recommendations due next month. 

At the task force’s meeting Thursday, members will submit their recommendations on excise and miscellaneous taxes and prioritize the $200 million tax relief proposals. Next week, the group will meet to decide which suggestions will be sent on for dynamic scoring. 

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