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Tennessee Tax Hike Squashed

NASHVILLE, Tenn. -- The Senate Finance Committee yesterday rejected a proposed 30-cent increase in the state's cigarette tax, with members claiming the measure is a "piecemeal" approach to the state's budget problems. The panel's counterpart, the House Finance Committee, postponed until today a vote on a 1-cent sales tax increase.

Sen. Rosalind Kurita (D-Clarksville), who proposed the tobacco tax increase to discourage smoking, said the committee's refusal to pass the measure showed that some members "are so concerned with passing an income tax that they will prevent any other revenue bill from passing. That is my opinion."

With the General Assembly locked in its fourth year of struggling over the state's financial mess, Kurita pointed out that the measure would raise an estimated $167 million for the state and is a tax that is well accepted by voters. But when pushed to a vote, the bill received only five of the six committee votes needed for it to move to the full Senate floor, according to the Memphis Commercial Appeal.

Kurita's bill would have raised Tennessee's tobacco tax to 43 cents per pack of cigarettes. Tennessee, whose current 13-cent-per-pack cigarette tax is the seventh-lowest in the country, is one of 20 states considering sharp increases in tobacco taxes this year. Under Tennessee law, 99 percent of tobacco tax proceeds are earmarked for public education. Kentucky, West Virginia, Georgia and Missouri are among states considering tobacco tax increases, Kurita said.
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