Virginia Governor Kaine Proposes a 30 cent tax increase in cigarette tax..

December 18, 2008 - Virginia Governor Tim Kaine proposal to increase the cigarette tax as part of a larger plan to address the state's expected $2.9 billion buget shortfall.

The governor indicates further taxing cigarettes only helps to pay for the extra health costs associated with the addiction and could actually encourage smokers to quit. Kaine tied the tax on cigarette users to avoiding :even deeper cuts to the states lean Medicaid program." Adding 30 cents tax per pack (now at 30 cents per pack) would "bring tobacco products closer to paying for the costs that they create for Virginia taxpayers."


Virginia's present 30-cent tax is among the nation's lowest, ranking 47th nationally. Doubling it would move Virginia approximately into a tie for 37th place with Wyoming, seemingly inconsequential to a multinational tobacco giant. In 2004, Virginia's legislature approved a tenfold increase of its 2.5-cent cigarette tax, the nation's lowest at the time (raised to 30 cents in 2005).

Kaine continued, "The Centers for Disease Control and Prevention estimate that cigarette smoking causes over $400 million per year in Medicaid expenses for Virginia." His tax proposal would generate $167 million. "In other words, Virginians have to pay another $233 million a year in taxes just to support Medicaid costs related to smoking. I believe that the taxes on smoking should pay for the budget costs incurred because of smoking," Kaine said. "And it may, in fact, reduce our health care costs by encouraging some smokers to quit. That, in and of itself, would be a very good thing."

If approved, the new tax would bring the per-pack tax to 60 cents, which the governor said would put Virginia at about half the national average.

Virginia House Speaker William J. Howell and U.S. Rep. Eric Cantor (R-Richmond) came out agressively (sic) against a potential cigarette tax hike Tuesday, calling the increase “an assault on jobs.” Cantor felt the tax escalation (60 cents from 30 cents per pack) could negatively impact jobs at Richmond-based Philip Morris and its parent company, Altria.

Most counties and cities do not have their own cigarette tax rates because they are prohibited by state law, but there are major exceptions such as the cities and counties in Virginia.

References: Va. governor to propose 30-cent cigarette tax hike, CNNMoney.com, 12/16/2008; Yahoo! Buzz
Cantor steamed over proposed cigarette tax hike by Allison Brophy Champion, StarExponent.com, 12/17/2008; Howell rips Kaine tax hike (UPDATED AND BUMPED), The Right-Wing Liberal, 12/2008;