ATLANTA – Georgia’s third-lowest-in-the-nation tobacco tax would go from 37 cents a pack to $1.35 under legislation the Senate Finance Committee approved Friday.
If the bill makes it through the General Assembly, it would represent the culmination of years of effort by health-care groups to build support for raising the state’s tobacco tax.
What is finally helping the proposal gain support is the state’s financial situation. The full Senate passed a fiscal 2021 state budget earlier Friday with $2.6 billion in spending cuts forced upon lawmakers by the impact the coronavirus pandemic and subsequent lockdown of the economy has had on tax revenues.
In voting against the budget, minority Democrats complained that legislative leaders were refusing to consider revenue-raising measures that could help offset some of the cuts.
The Georgia Budget and Policy Institute, an Atlanta-based think tank that has consistently called for legislation increasing revenues, released a statement late Friday supporting the tobacco tax hike.
“Lifting the tobacco tax will simultaneously help our state fund critical priorities, such as health and education, and boost health outcomes,” said Danny Kanso, a GBPI policy analyst. “GBPI commends Chairman [Chuck Hufstetler, R-Rome] and the Senate Finance Committee for their leadership in passing legislation that will generate several hundred million dollars per year by bringing our state’s abysmally low tobacco tax in line with the level assessed in most states across the nation.”
Raising the tobacco tax to $1.35 a pack would fall well short of the national average of $1.80 a pack, and Kanso suggested lawmakers consider that when the bill heads to the Senate floor.
But the legislation faces an uphill battle in the Georgia House of Representatives.
“I’m not a tax increaser, particularly during this [economic] climate we’re in,” House Speaker David Ralston, R-Blue Ridge, said earlier this week.
Ralston also is skeptical about another effort by Hufstetler’s committee to free up more tax revenue. The Senate Finance panel passed a bill Thursday that would eliminate a series of tax breaks the state offers to lure businesses to Georgia.
The speaker argued that getting rid of such tax incentives would put a damper on economic development efforts that create jobs.
“This is not a good time to be killing jobs,” he said. We need to be about the business of growing jobs back.”