Indiana House GOP open to smaller cigarette tax increase

INDIANAPOLIS (AP) - The leader of the Indiana House said Thursday that he is willing to back down - at least partially - on a proposed $1 per pack cigarette tax increase, after encountering stiff resistance from industry groups and fellow Republicans in the state Senate.

The proposed hike is one of several measures that Republicans who control the Legislature are considering as they look to increase revenue or adjust existing streams of funding to cover the cost of an infrastructure improvement plan.

"We said at the start that this wasn't the only way to accomplish a plan," said House Speaker Brian Bosma, an Indianapolis Republican. "We want something that is sustainable, responsible and long term."

Instead, a 60-cent tax cigarette increase would be acceptable and keep Indiana in line with Ohio, he said.

Republicans, who are known to be resistant to tax increases, say the state's roads are crumbling and there is not enough money to pay for fixing them. A 10-cent per gallon gasoline tax increase - and potentially much more for diesel fuel - is also in the mix, as is a $15 increase in the cost of registering a vehicle.

But in a state with one of the worst smoking rates in the country, an increase in cigarette taxes was an attractive option for some lawmakers and public health advocates who think it would not only raise revenue, but provide a powerful disincentive.

"Indiana ranks near the bottom of states in every health category," said Monique French, co-chair of the Raise It For Health campaign, which supports an increase. "Significantly raising the price of cigarettes is the single most-effective way to reduce smoking, especially among youth."

Tobacco industry officials and convenience store trade groups unsurprisingly oppose the idea. They say it would harm business by encouraging people to cross state lines to buy cigarettes. Others say that cigarette tax increases provide a diminishing return because they drive people to quit smoking.

"You have to be open-minded," said GOP Senate leader David Long, of Fort Wayne. "But it's not a popular concept."

House Republicans pushed for a $1 increase last year, but that died after former Gov. Mike Pence, now the U.S. vice president, and Senate Republicans opposed the election year measure.

This year, the House initially pushed for a $1.50 increase, but trimmed that down to $1 in its budget proposal now before the Senate.

If approved, the money would help cover Medicaid costs, freeing up funds that could be shifted to infrastructure spending.

"Some 50 percent of Medicaid expenditures are related directly to smoking," Bosma said. "It makes a great deal of sense."