Raleigh, N.C. — An anti-smoking group said Tuesday that North Carolina could ease its budget problems and improve its overall health by raising the state tax on cigarettes.
North Carolina has the fifth-lowest tobacco tax in the country, at 35 cents a pack, and the North Carolina Alliance for Health called for raising the tax to $1.35 a pack.
"There's room for raising that," said Pam Seamans, executive director of the Alliance for Health.
A $1-per-pack increase in the cigarette tax would generate more than $400 million for the state, she said.The group did not say whether that figure accounted for any decrease in sales because of the tax hike or was based on current sales.
Budget analysts have forecast a state budget deficit of $800 million to $1.6 billion this fiscal year because of declining sales tax and personal and corporate income tax revenue. Some analysts have said the deficit could top $3 billion in the fiscal year that starts next July.
Seamans said raising the tax would produce the additional benefit of encouraging some people to quit smoking.
"The higher you go, the more benefit you see. The more revenue you raise, the more lives you save and the more kids you keep from starting," she said.
The federal government is also considering a tax increase on cigarettes.
George Hoffman, who owns Pipes By George in Raleigh, said the current recession would be the worst time to raise taxes on smokers.
"When is enough enough?" Hoffman said. "There are a lot of people who are having to tighten their belt, and I really think the most sane, sensible thing for government to do is to tighten their belt."
Gov. Mike Easley proposed higher tobacco and alcohol taxes last spring to pay for more education and mental health spending, but lawmakers shot down the idea in an election year.
Seamans said she hopes Governor-elect Beverly Perdue will stick to her previous support for higher cigarette taxes.
"Lt. Gov. Perdue, in her primary race, did suggest and call for an increase in the cigarette tax of 45 cents. So we have high hopes that she'll consider or that she'll be out there promoting this," she said.
Perdue issued a statement Tuesday afternoon in which she backed away from that earlier stance.
"As I consider my options for addressing the state budget in 2009, my first priority is to carefully identify opportunities to cut spending rather than implement new taxes," she said. "I've been down this road before, and I know how to make difficult decisions when it comes to balancing the budget."