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Big tobacco tells Cretul: No net gain with cig tax

House Speaker Larry Cretul heard from lobbyists for the nation's largest tobacco companies in his office this morning with an anti-tax pitch that warned if the House agrees with the Senate and raises the cigarette tax, the state will see its revenue from Big Tobacco decline.

That's because these companies predict that buyers will switch to lower-priced cigarettes that don't pay into the tobacco settlement fund. Without raising the cigarette tax, the state will get $2.4 billion in Medicaid money, they said.

"People all of a sudden would have a choice,'' said Larry Williams of Reynolds Tobacco. "Do they want to stop smoking or swithc to a product that's $2 a pack less.''

"Our mission is to say, first people who use our product -- 55 percent of them are at the poverty level -- and if you're going to balance the budget, you're going to balance it on their backs.'' 

The industry lobbyists weren't the only ones offering arguments against the cigarette tax. Finance and Tax Committee Chairwomen Ellyn Bogdanoff sat in the meeting and suggested that if people stop buying cigarettes, they also stop visiting convenience stores.

 "Twenty-two percent of all sales in convenience stores are cigarettes,'' she said. "We need to look at everything. IF they don't go in to buy cigarettes, they don't buy the coke. They don't buy the chips.''