Smokers may want to stock up before July 1.
That’s because July 1 a pack of cigarettes will cost 42 cents more after the House passed a bill to increase the tax on cigarettes by that amount in order to fund part of Gov. Phil Bredesen’s $500 million education funding overhaul.
After nearly two hours of debate in which insults flew, the House voted 60-34 for the cigarette tax increase, which more than triples the state’s current levy from 20 cents to 62 cents per pack.
The Senate had already passed the tax increase.
The bill is now headed to Bredesen, who said he was “very pleased” with the Legislature’s action.
“This is about funding education and saving lives,” Bredesen said in a statement. “Now let’s pass a good budget and close this session.”
The 42-cent cigarette tax is estimated to raise $230 million annually, which mainly will be used for K-12 and higher education.
“It’s going to do some wonderful things for the educational system,” said House Majority Leader Gary Odom (D-Nashville), the House sponsor of the bill.
Besides paying for part of Bredesen’s education plan, $21 million will go toward agricultural enhancement grants with another $11 million for state trauma centers.
Of the 60 votes in favor of it, 14 Republicans crossed over and voted for the cigarette tax increase. Four Democrats voted against the tax.
All members of the Davidson County Delegation voted in favor of the bill besides Republican Rep. Beth Harwell, who voted against it, and Democrat Rep. Sherry Jones, who didn’t vote.
Republicans who voted against raising the cigarette tax said the state had a “budget surplus” and didn’t need to collect any additional taxes from Tennesseans.
“If you increase taxes with a billion dollar surplus, you’re a tax and spend liberal no matter which side of the aisle you’re on,” said Rep. Frank Niceley (R-Strawberry Plains).
The House’s vote to hike the cigarette tax came after Odom garnered the votes to kill Harwell’s move to have a food, cigarette tax swap.
Harwell’s amendment would allow a cigarette tax increase but would set aside the money for an impending sales tax on food cut. It would not appropriate any new money toward Bredesen’s education reforms.
Harwell mentioned on the House floor that Odom had sponsored a similar tax swap last year.
“If you don’t do something about it when we have a budget surplus and when we are planning on voting on a tax increase that many people find palatable, when are you ever going to do anything about the highest food tax in the nation?” Harwell said to fellow House members.
Odom said he was “disappointed” in Harwell and said not increasing the cigarette tax would not fund Bredesen’s education reforms, state employee pay raises, anti-crime funding or more highway fund dollars.
“You know who’s opposed to this tax increase — big tobacco,” Odom said on the House floor. “They are the only ones out here in the lobby. They are the only ones you hear from against this. Big tobacco. And I know if you’ve been listening to your constituents, that’s what you’ve heard.”
Several other Republican efforts to take the sales tax off of food were killed. Odom said each effort was targeted at changing the bill to send it back to the Republican controlled Senate, whose GOP members were not in favor of a 42-cent increase and, as a result of Democratic absences, could have changed the bill.
The vote on the cigarette tax came after House Democrats said “no deal” to a Republican offer to take up a bill to use $100 million in lottery surplus funds for K-12 schools capital building projects.
Earlier in the day, Republicans in the House said they would not vote on a bill to increase the cigarette tax until a vote was taken on the plan to use the $100 million of the state’s excess lottery funds for a grant program that K-12 schools could use to build or repair schools.
Democrats weren’t in favor of the plan. House Speaker Jimmy Naifeh (D-Covington) called it a “giveaway bill.”
“It’s $100 million that you throw out there like a bunch of drunken sailors,” Naifeh told reporters.
The GOP lottery surplus plan fell by the wayside after the Democrats said “no deal” and the Senate Education Committee made it more of a moot issue when the panel did not approve the proposal.