Senate Republicans Sticking To 50-Cent Tax Increase

By ANDREW WELSH-HUGGINS, AP Statehouse Correspondent

COLUMBUS, Ohio (AP) - Senate Republicans on Tuesday said they are sticking with a plan to increase Ohio's tax on cigarettes by 50 cents.

The GOP-controlled Senate Finance Committee has included the 50-cent increase in the latest version of a plan to balance Ohio's $1.7 billion budget deficit.

The committee planned to vote on the plan Tuesday, followed by the full Senate and the House Finance Committee.

On Monday, House Republicans and Gov. Bob Taft showed support for reducing the proposed increase by 14 cents. That proposal would increase the current tax by 36 cents a pack, to 60 cents. The current tax is 24 cents.

Sen. Doug White of Manchester, a southern Ohio tobacco farmer, said he was reluctantly supporting the 50-cent increase. In return, lawmakers will restore $32 million in funding to help tobacco farmers.

"We are challenged to meet our responsibilities, step up to the plate and swing the bat," White said.

However, support for the tax increase among White's fellow Republicans remained unclear Tuesday.

Immediately after releasing their 25-point plan to balance the budget, Republican senators adjourned to discuss the proposal in private.

The House also met in private Tuesday afternoon. Speaker Larry Householder, a Glenford Republican, said many of the House Republicans had concerns about the cigarette tax increase, cuts to local government assistance and other parts of the plan. The House was waiting for the Senate to finish work on the plan.

"We're just continuing to talk and assure people that this is something that has to be done and these are the solutions," Householder said "It's not the easiest thing you ask legislators to do."

A 50-cent increase would raise about $400 million a year. A 36-cent increase would raise about $315 million.

Taft and lawmakers have until Friday to plug the state's deficit.

Taft, a Republican, prefers the 50-cent increase as the best way to ensure "significant ongoing revenue" for the state, Brian Hicks, Taft's chief of staff, said Monday.

However, Taft also realizes that Republican leaders in the House and Senate are having a hard time winning votes for that amount from their members, Hicks said.

The 36-cent proposal satisfied neither supporters nor opponents of the 50-cent tax.

Steve Jenkins, a wholesaler of tobacco products and candy, has to pay cigarette taxes upfront, then wait for reimbursement through sales. He said any increase could force him to borrow money to pay taxes instead of paying cash.

"The state is asking me to borrow money and pay interest on it to balance the state budget," said Jenkins, 47, of New Philadelphia.

Antismoking groups say a 50-cent increase would lead to double-digit reductions in Ohio's smoking rate, and any decrease in the tax is unacceptable.

Under 50 cents, "you would see some decline, but it wouldn't be significant," said Chris Schulte, a Tobacco-Free Ohio spokeswoman.

The budget plan rolled out Tuesday also would empty Ohio's rainy day fund, cut between $400 million and $500 million in state spending, delay a business tax break promised by President Bush's federal stimulus package and implement a tax on trusts to raise $119 million a year.

(Copyright 2002 by The Associated Press. All Rights Reserved.)