Proposal could hike tax on cigarettes $1 per pack

Wednesday, June 26, 2002 | 11:05 a.m.

CARSON CITY -- A proposal to raise the tax on a pack of cigarettes from 35 cents to $1 is "shortsighted and narrow-minded," a spokesman for the tobacco industry said.

The Task Force for the Fund for a Healthy Nevada Tuesday voted to ask the 2003 Legislature to boost the tax, which has not been changed since 1989.

Sen. Ray Rawson, R-Las Vegas, chairman of the task force, estimated it would raise an extra $70 million to $75 million a year.

The task force decided to send 20 percent of the added revenue to local governments; take 20 percent for the task force to dispense to health programs; 20 percent to higher education for training of medical professions, including nurses who are now in short supply and the remaining 40 percent to the state's general fund.

Assemblywoman Vivian Freeman, D-Reno, said the increase was justified. She noted the University and Community College System of Nevada is now embarking on a major project to train more nurses.

Backers of the plan believe it will reduce the unhealthy consumption of cigarettes.

C.O. Watson, lobbyist for the Nevada Association of Tobacco and Candy Wholesalers, said today this big an increase would kill the sales made to tourists. According to statistics supplied by the fiscal staff of the Legislature, the $1-a-pack tax would make it highest in the West.

California now charges 87 cents a pack and Utah imposes a 69.5 cent-a-pack tax, which are presently the highest among the Western states. Oregon charges 68 cents, Arizona 58 cents and Idaho 28 cents.

Watson said 67 percent of the sales in Nevada are to tourists who stock up on cartons of cigarettes before they return home. Only 33 percent of the purchases, he said, are made by Nevadans.

Nevada's existing 35 cents-per-pack tax raised $43.7 million for the state and $17.1 million for local governments in last fiscal year.

The fiscal analyst bureau of the Legislature said estimating the increased revenue is "somewhat problematic." It said "recent research indicates that each 10 percent increase in the price of cigarettes results in a 4 percent decline in consumption in the short term. "