RICHMOND, Va. -- Governor Timothy M. Kaine will propose doubling Virginia's 30 cents-per-pack cigarette tax in a rewritten budget that pares up to 1,500 state jobs, Virginia legislators said Tuesday. The governor's budget amendments anticipate about $300 million in new state revenues, and a large share of that would come from the higher tax on cigarettes, reported the Associated Press.
House Speaker William J. Howell said Kaine told him Tuesday of his proposal to double cigarette taxes to 60 cents, making it the second tax increase on cigarettes in five years if it passes. [image-nocss] In 2004, Virginia's legislature approved a tenfold increase of its 2.5-cent cigarette tax, the nation's lowest at the time.
Howell and U.S. Rep. Eric Cantor (R-Va.), condemned the cigarette tax proposal as "a job killer," contending it would pose a major blow to Philip Morris, which supplies smokers globally with Marlboros and Virginia Slims from its cigarette manufacturing complex in Richmond.
Virginia's 30-cent tax is among the nation's lowest, ranking 47th nationally. Doubling it would move Virginia approximately into a tie for 37th place with Wyoming.
"You may say that there is a national market for cigarettes, but we would be disproportionately affected by this because of jobs," said Cantor, whose district includes offices of Altria, the corporate parent of Philip Morris. Howell said states that double their tobacco taxes often see revenues decline. "People start going across state lines to buy their cigarettes," he said.
"We strongly oppose the governor's proposal to increase the cigarette excise tax, especially during an economic downturn," said Bill Phelps, a spokesperson for Altria Group, New York. "We don't think it makes a lot of sense to fund important government programs with a declining revenue source."
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