Local News

Proposal To Raise State's Cigarette Tax May Not Go Up In Smoke

Posted December 21, 2004 5:01 a.m. EST

— North Carolina's cigarette tax has been five cents for 14 years and is the second lowest in the country. Some North Carolinians believe it is time to raise it, and state lawmakers may now be on the same page.

House Speaker Jim Black is one of several lawmakers who say 2005 may be the year North Carolina moves up from the second-lowest cigarette tax in the nation.

"I've had some discussion with the tobacco companies and members of the House and they understand that something is probably coming along the line," he said.

Even opponents in the Legislature admit raising the cigarette tax is a way to raise revenue.

"When you have a billion-dollar shortfall, you have to look at all the options and I think that's what we're going to do," said House minority Leader Joe Kiser.

For health advocates, the proposal is more than a revenue-maker. They say raising the tax from five to 80 cents a pack would deter teen smoking and convince some adult smokers stop.

"These are very good signs that the Legislature will take this seriously this year," said Peg O'Connell, of the North Carolina Alliance for Health.

Advocates also believe a $10 billion federal tobacco buyout eliminates the argument that a tax increase would hurt farmers. Still, they may be in for a fight.

"I have a concern. You still have a lot of people still depending on it in this state for a living," said Rep. Rick Eddins, R-Wake.

However, O'Connell said people are going elsewhere to buy tobacco.

"The cigarette companies in North Carolina don't even buy the majority of their tobacco from North Carolina growers anymore," she said.

Going from five cents to 80 cents a pack would be a hefty increase, but North Carolina would still be below the national average, which is 84 cents a pack. Kentucky has the lowest tax at 2 cents a pack. New Jersey has the highest tax at over $2 a pack.

A cigarette tax hike has been a hard-fought fight in the Legislature. Advocates started pushing for the increase three years ago. In 2003, the Senate put a 25-cent increase in its proposed budget, but it was taken out by the House.

Earlier in the year, Virginia approved a 27.5-cent cigarette tax increase, which refueled the debate in North Carolina. There was a push for a 75-cent tax increase during the summer, but when the budget passed in July, the tax hike was nowhere to be found.