February 18, 2009 - Gov. Mike Beebe signed an $87.8 million tobacco-tax hike into law (Act 180 of 2009, formerly House Bill 1204), on Tuesday, February 17, 2009. It will raise cigarette taxes by 56 cents a pack and increase other tobacco taxes to pay for a statewide trauma system and a host of expanded health programs. The law, which takes effect March 1, 2009 will raise cigarette taxes by 56 cents a pack (from 59 cents a pack) to $1.15 per pack. With the increase, Arkansas’ tax will still be below the national average of $1.19 per pack. The state increase is on top of a 62-cent-a-pack federal excise tax signed this month that goes into effect April 1, 2009.
Arkansas’ state senate had approved the tax on all tobacco products on February 12, 2009. The measure needed 27 votes to pass, and the state senate approved measure with a 28 to 7 vote. The house passed the bill earlier 75 to 24. The bill then goes to the governor to sign. (Arkansas Senate passes tobacco tax increase by ANDREW DeMILLO, Forbes.com - Associated Press (2/12/2009))
State officials say the Arkansas tax increase, when combined with federal matching dollars, will pay for nearly $180 million in expanded health programs.
Beebe has proposed using the new revenue to expand the ARKids First health insurance program for low-income children by raising the income eligibility cutoffs, a move that will open it up to about 8,000 more children. Other programs that Beebe has called for funding with the tobacco tax money are a northwest Arkansas campus for the University of Arkansas for Medical Sciences, community health centers and a statewide flu-shot campaign.
Arkansas also bans smoking in cars with children age 6 and younger.
Related news brief: Arkansas Governor's proposed tobacco tax increase..; U.S. States Considering Tobacco Tax Increase...
Reference: Beebe signs tobacco tax hike into law by John Lyon, Arkansas News Bureau, 2/17/2009.
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