Jun 23, 2011 5:59 AM by Lauren Wilson & AP

Jindal, lawmakers compromise on cigarette tax

BATON ROUGE, La. (AP) - A Westwego senator has agreed to accept the cigarette tax renewal that the House tacked onto his proposal to fund a popular college scholarship program.
The compromise is expected to bring to a close one of the most contentious battles of the legislative session, all but ensuring that the bill will emerge from a conference committee with the 4-cent tax extension intact.
Both the House and Senate will have to vote on the measure Thursday before it can receive final passage, and then it will require approval from voters in a fall ballot initiative.
Without enacting a renewal, Louisiana's cigarette tax will drop from 36 to 32 cents per pack at the end of June 2012. The state already has one of the lowest cigarette taxes in the nation and one of the highest rates of tobacco use.
First enacted 11 years ago, the tax generates $12 million annually. The money goes to health care services and draws additional matching funds from the federal government.
Rep. Harold Ritchie, D-Bogalusa, argued earlier this session that the tax should be increased in order to encourage smokers to kick the habit. Ritchie, who is a smoker, said his proposal would lower the burden that taxpayers already face in treating uninsured patients suffering from the myriad of tobacco-related diseases.
In hearings, business groups and public health advocates debated whether a few cents was enough of a price signal to have an effect on the behavior of smokers - or young people considering whether to try it out. Retailers said that any tax hike would simply drive business to other states and the Internet.
Jindal, however, sidestepped the health issue, labeling the renewal of the expiring tax as a tax increase and opposing any increases on principle.
In May, Ritchie withdrew his proposal to raise the tax, but a renewal of the 4-cent tax sailed through both chambers, garnering a super-majority in both the House and Senate. Democrats and independents voted in a near bloc to support the renewal, but the GOP was divided over whether the renewal amounted to a new tax. Tea party groups unsuccessfully called for defeat of the measure.
When the renewal reached Jindal's desk, he vetoed it. The House subsequently refused to override him.
But on Monday, Ritchie breathed new life into the cigarette tax extension by attaching it to a bill to fund college scholarships.
Republican John Alario had sponsored the Jindal administration's bill to redirect a stream of tobacco settlement money to the state's free college tuition program, called the Taylor Opportunity Program for Students, or TOPS.
In a last-minute compromise, Jindal said Tuesday - and Alario agreed Wednesday - that TOPS is a bigger priority than ensuring that the cigarette tax expires.
"I'm supporting the TOPS bill," Alario said, adding later, "I will vote for it."
The bill to fund TOPS and renew the cigarette tax now heads to a conference committee made up of members of both houses of the Legislature in order to work out some technical problems related to appropriation of funds, Alario said. The cigarette tax renewal is expected to stay on the bill when it comes out of the conference committee.


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