Tobacco Road Gets A Toll Booth

"It's been a sacred cow," said Rep. John Draud, the Republican sponsor of the Kentucky bill, which would earmark funds for education. "But things are changing."

Still, tobacco wields considerable clout in the South.

North Carolina, the top flue-cured tobacco producer, has taken heat recently for spending $400,000 from a national tobacco class-action settlement toward the engineering of a tobacco-processing plant, while spending none of it on smoking-cessation programs.

Kentucky spent $180 million in settlement funds on agriculture-related programs - including $40 million in direct payments to farmers who lost tobacco income and $91 million to help leaf growers develop other crops.

And in Virginia, whose 2.5-cent cigarette is the lowest in the nation and hasn't budged since 1960, legislators quickly sidelined about a dozen cigarette tax bills this session - despite an estimated $6 billion deficit. This was, after all, an election year.

"It seems to me that we still have a large number of people in the state that continue to believe that tobacco is more important than I believe it actually is in today's economy," said state Sen. Mary Margaret Whipple, who introduced a bill that would have raised the Old Dominion's tax to 60 cents.

But tobacco foes see chinks in tobacco's armor even in Richmond, where travelers on Interstate 95 pass by giant Marlboro and Virginia Slims logos at the corporate headquarters of industry leader Philip Morris.

A committee recently voted to make the public areas on the main floors of the legislative offices smoke-free. And the sheer number of bills introduced this year seemed to signal a shift.

"I'd say more (were filed) this year than have probably been proposed in the past 10 years put together," said David Bailey, a Virginia lobbyist for the American Lung Association. "It's major."

In North Carolina, Gov. Mike Easley hasn't ruled out calling for a hike in the 5-cent tax, the nation's third-lowest, and legislators have promised bills raising the tax to as high as $1.

Anti-tobacco forces are redoubling their lobbying efforts.

The National Campaign for Drug-Free Kids is trying to coordinate the activities of anti-tobacco and health care organizations in the South, particularly the tobacco states.

Armed with polls that they claim show lawmakers can tax cigarettes up to a dollar more per pack with little fear of political fallout, lobbyists tell legislators this is a "win-win-win" strategy - raising revenue, reducing health care costs and stopping teens from picking up the habit.

"Voters understand it's a public-health measure, and they're far more supportive of it," said Amy Barkley, the campaign's regional representative.

Tobacco interests are fighting back.

R.J. Reynolds spokesmen like John Singleton are making the rounds of state legislatures with a "hypocrisy chart," arguing that smokers, in some cases, are paying 10 and 20 times more tax than drinkers.

Between 1999 and 2001, Singleton said, governments took in about $88.1 billion in taxes and tobacco settlement payments.

"Matter of fact, we consider that tax profiling," said Singleton, whose company makes Camels and Winstons.

Michael D. LaFaive, director of fiscal policy for Michigan's Mackinac Center for Public Policy, a conservative think tank, said interstate cigarette smuggling has grown along with taxes, to the point where profits from smuggling reached an estimated $17 billion in 2000.

In Kentucky, which ranks No. 1 in the percentage of its residents who smoke - 30 percent - and has the nation's highest lung cancer rate, a cigarette tax bill proposed last session didn't even get a committee hearing.

But Draud said Kentucky's looming half-billion-dollar deficit gives his bill more than a fighting chance. A committee chairman has promised at least a hearing this time around.

"It's going to be cutting services for the needy, the old, the blind; letting people out of prison; mental health services; adoption for foster children - I mean, we're going to have to cut across the board here," the former school superintendent said. "I think it's easy when you frame it in that context."

In neighboring Virginia, locals aren't waiting for the state to act.

Just last month, officials in Alexandria, Portsmouth and Virginia Beach voted to increase their cigarette taxes to 50 cents a pack, joining the city of Chesapeake as the highest in Virginia. Gordonsville wasn't trying to balance its budget on the backs of smokers - just ease the strain a little.

In Gordonsville, a railroad town of 1,500 just east of Charlottesville, the tax is expected to raise an estimated $35,000 a year. That's not enough to cure the town's fiscal malaise, but critics say it's more than enough to cause hardship.

Brenda Morrison, owner of the town's 7-Eleven store, told the council that the same plant closings and cutbacks that have hurt city revenues are also hurting her loyal customers. And if they can drive a couple of minutes down the road to a convenience store outside the city limits, they will - taking their sales taxes with them.

"I can't afford to lose one customer," said Morrison, whose store is one of four tobacco purveyors in this town without stoplights. "They're already counting their pennies."

The council tabled the tax ordinance until later this month to allow for more study, but it didn't show any sign of backing down.

"There's no such thing as an equal tax," Coiner said. "We're in a fix."