S.D. Tobacco Tax Hike Thwarted

PIERRE, S.D. -- A $15 million tobacco tax increase that supporters said would reduce smoking died after critics said the motive for the proposal was money, not public health.

The measure would have raised the state tax on a pack of cigarettes by 27 cents, to a total of 60 cents a pack, said Republican Rep. Don Van Etten of Rapid City, S.D., a sponsor of the measure.

But the debate over higher taxes on tobacco products is expected to return as early as this week. The regulation of tobacco promises to be a contentious issue as the State Legislature enters its last three weeks, the Sioux Falls (S.D.) Argus-Leader reported.

The House Tax Committee voted 9-6 to kill Thursday's bill, a compromise measure that rolled three separate tax proposals together. Anti-smoking groups say raising the cost of the product would cut South Dakota's rate of tobacco use, especially among the 44 percent of teens who use cigarettes, the report said.

Ven Etten said the estimated $15 million income would be divided like this:
* $6 million to Medicaid costs of the state budget.
* $4.5 million to schools on a per-student basis.
* $3.7 million to ethanol subsidies.
* $750,000 to tobacco reduction programs.

That split upset Democrat Rep. Charles Flowers of Iroquois, S.D. "I wasn't sent here to raise taxes," he said. "We're talking about raising $15 million, with $750,000 going to tobacco prevention. We'd better think what we're doing here."

Republican House Leader Bill Peterson of Sioux Falls, who supports higher taxes on tobacco, said after the meeting that the issue isn't finished. The Tax Committee has two other bills that would raise cigarette taxes.