Raising cigarette taxes

Is any kind of tax increase possible for this legislative session?

The House appropriations bill, scheduled for debate this weekend, would cut out the $10 million-a-year anti-smoking campaign, which remains a legacy of the state’s 1998 tobacco settlement.

To save the anti-smoking effort, Rep. Carol Alvarado, D-Houston, is pushing a bill to increase the state cigarette excise tax by $1.05 per pack.

“It doesn’t take a whiz to figure out we’re spending a lot because of a product that contributes to all those expenses,” she said. “We need the money. We can’t have a cuts-only approach, and it’s not a new tax. It’s not something that affects the masses.”


If passed, the state’s excise tax would rise from $1.41 to $2.46 a pack. The tax increase would generate about $375 million a year in extra revenue for Texas, according to Legislative Budget Board estimates. Alvarado proposes to use $25 million a year for anti-smoking programs and the remainder for property tax cuts.

Raising the state’s excise tax from $1.41 to $2.46 a pack would still leave at least eight states with higher cigarette taxes. It cost Texans $1.6 billion a year to cover Medicaid costs for smoking-related illnesses, according to 2004 data compiled by the Campaign for Tobacco-Free Kids.

To be clear about something, recall that the 2006 property tax cut wasn’t just financed by the business margins tax. There was also a one dollar increase in the excise tax on cigarettes, which contributed a smaller but still significant amount to the balance sheet. Where the article says that funds from Rep. Alvarado’s proposed increase would go towards “property tax cuts” after paying for the anti-smoking programs, that’s what it means. It would be a small step towards closing the gap between the cost of that property tax cut and the revenues being raised to pay for it.

[House Ways and Means Committee Chair Harvey] Hilderbran said Alvarado does not have enough support in his committee to recommend a cigarette tax increase “at this time.”

“But things change, so if she get the votes for it, I’ll be happy to consider bringing it up (for committee action)” Hilderbran said.

That’s better than a flat out “No”, but I wouldn’t be too optimistic about its chances. But to answer the question I started with, if any kind of tax increase is possible this session, this would be it.

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4 Responses to Raising cigarette taxes

  1. Al Clarke says:

    This tax is such a joke. The revenue from cigarette taxes has never been used to fund or offset medical costs or anything related to smoking. It has always been and will always be a source of revenue. The anti-smoking lobby argues that increasing costs for smokers will deter their behavior so taxes rise on cigarettes, yet each legislative session there is a need to raise the cigarette taxes despite fewer people smoking.
    The goal here is revenue off the backs of an unpopular group of people – smokers. The same is true in many other states for those that drink (alcohol taxes) and gamblers – the so-called “sin taxes”. Texas legislators are no different that legislators from other states and they will continue to try to generate revenue from taxpayer groups that are unpopular – smokers certainly qualify.

  2. I don’t see a problem with taxing the bejeezus out of cigarettes, no matter the reason. If it gets a few people to stop – or not to start, then all the better. I feel the same way about fast food, junk food, and sodas.

  3. Al Clarke says:

    I am not in favor of taxing junk food, sodas, cigarettes, etc at a higher rate with the intent to change behavior. Tax laws are being used to do much more than generate revenue and that is contrary to their purpose and role. Revenues collected from such “sins” are not used for the purposes they claim the tax money is needed and intended to support……..nothing more than another example of government misdirection and misappropriation of funds.

  4. A.Scherer says:

    If the only intended purpose of creating this bill was to gain revenue and to make money off the people by targeting unpopular groups, it would have passed by now. The fact that it is still in committee tells me that other lawmakers are not in support of the bill. Carol Alvarado, the author of the bill, had intentions of putting the tax money back into the health care system. At the risk of wearing her heart on her sleeve, she just wants to make changes for the health of her citizens. There is always a debate about how to raise more money for health care. Who are the people trying to make changes so everyone can get the help they need? She is going straight to the source by taking money from taxes to pay for the effects of the problem.

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