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Kentucky Mulls Boost in Cigarette Tax

House lawmakers in heavy tobacco-growing state propose 50-cent-per-pack increase

FRANKFORT, Ky. -- Lawmakers in the historically pro-tobacco state of Kentucky are advancing a proposal to raise cigarette taxes by 50 cents per pack—and possibly more—according to the Foundation for a Healthy Kentucky.

Supporters of the bill, which is part of the state’s current budget process, say the move will reduce smoking rates, while opponents are concerned that it will hurt both retail and farming in Kentucky, according to WKU Public Radio. But with the state facing billions of dollars in pension obligations, the news source said lawmakers seem to be more willing to act on a cigarette-tax increase.

Kentucky’s current cigarette tax of 60 cents per pack ranks 43rd in the nation, the foundation said. The national average is $1.72 per pack. The Kentucky House of Representatives included a 50-cent-per-pack increase to the cigarette tax in its budget bill, HB 366, which was approved March 1, said Ben Chandler, president and CEO of the Louisville, Ky.-based foundation. The bill now goes to the Senate, where the foundation, along with a coalition of 150 organizations, is urging adding another 50 cents per pack to the proposal, Chandler said.

Morgan Scarboro, an analyst with the Tax Foundation, Washington, D.C., called the proposal "an irresponsible way to raise that revenue."

Scarboro said Kentucky needs tax reform, not a higher cigarette tax. She said that a good tax code is neutral and doesn’t try to influence an individual’s behavior or rely heavily on any one industry. An unintended consequence of increasing cigarette taxes is that people can purchase tobacco products in neighboring states such as Tennessee and Virginia, which have lower cigarette taxes, Scarboro said.

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