CULLMAN, Ala.—As the power structure in Montgomery looks for ways to make up a budget shortfall in 2015, a state cigarette tax increase may be on the table.
Gov. Robert Bentley has said he might sign a bill if it came across his desk after some legislators expressed an interest in targeting cigarettes as a revenue generator.
Smokes may be an easy target because the Yellowhammer State now has one of the lowest cigarette tax rates in the country. Alabama’s per-pack tax rate of 42.5 cents is the fourth lowest in the United States and more than a dollar below the national average. A federal tax of $1.01 means smokers still pay nearly $1.43 in taxes for each pack in Alabama.
Researchers at the Mercatus Center at George Mason University say the heavy levy on cigarettes “contradicts basics of economics, finance and, most importantly, free choice.”
“Once it becomes legitimate for government to protect individuals from their own follies, there is no way to establish limits to governmental powers,” wrote researchers Richard Williams and Katelyn Christ.
Katherine Robertson, a policy analyst at Alabama Policy Institute, said she fully expects the issue to be discussed in 2015. She said lawmakers should look at cutting the fat rather than implement a new tax on an already overtaxed commodity.
State Rep. Randall Shedd, R-Cullman, said he also opposes the tax hike.
“I think it would hurt people who use it and I don’t see it solving the problem,” he said. “I’m still looking at ways to reduce [government] instead.”
Although Shedd said the Republican majority in the Legislature has done a good job of cutting in some areas despite resistance from the bureaucracy, there’s still plenty of work to be done.
“There are a lot of things we would have liked to have done, but we could only do what we could afford,” he said of providing additional government services during his time as mayor of Cullman. “State government should do the same.”
A Gallup poll released in July shows 59 percent of smokers see these “sin tax” hikes as unjust discrimination.
