cigarette taxes

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In a state where tobacco has a rich history, a movement is underway to increase Kentucky’s tax on cigarettes.  Supporters say it would reduce smoking rates and save lives while opponents argue a tax hike will hurt farmers and the economy.  But with the state facing billions of dollars in pension obligations, lawmakers this legislative session appear to have more of an appetite for increasing the cigarette tax. 

The Foundation for a Healthy Kentucky spent six figures just in the first month of this year’s legislative session trying to convince lawmakers to increase Kentucky’s cigarette tax by one dollar.  The $100, 240 spent by the health advocacy group wasn’t much more than the $95, 218 spent by tobacco companies. 

LRC Public Information

The leader of the state Senate is making no promises on whether proposals to increase the cigarette tax and create a tax on pain pills will be considered in his chamber.

On Thursday, the Republican-led state House of Representatives passed a revenue bill that would increase the cigarette tax by 50 cents per pack and create a 25-cent tax that distributors would have to pay for each dose of opioid pills sold in Kentucky.

Senate President Robert Stivers, a Republican from Manchester, said he wants to have more analysis on the issue before weighing in.

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The Foundation for a Healthy Kentucky spent six figures lobbying members of the General Assembly just in the first month of the 2018 session.  Their efforts are bearing some fruit.

The Kentucky House passed a budget bill Thursday that includes a 50 cent hike in the cigarette tax. 

The Foundation for a Healthy Kentucky is pressing lawmakers to raise the tax on a pack of cigarettes by one dollar.  CEO Ben Chandler sees a 50 cent tax increase as an ineffective compromise.  He thinks 50 cents isn’t enough to make smokers give up the habit.

Beshear Offers Tax Overhaul Plan

Feb 4, 2014

Gov. Steve Beshear has proposed sweeping changes to Kentucky's tax code that include lowering tax rates for individuals and businesses and expanding the sales tax to more services.

The state's cigarette tax would increase to $1 a pack under the plan.

Beshear said Tuesday his package includes 22 changes to the tax system. He calls it a "beginning point" in discussions with lawmakers to modernize the tax system to make Kentucky more competitive.

The Democratic governor proposes applying the state sales tax to labor charged to fix such personal property as automobiles and computers.

The sales tax also would apply to admissions to fitness centers and golf courses under the plan.

Beshear says his plan would increase state General Fund revenues by nearly $210 million per year once fully implemented.

A leading Kentucky lawmaker says raising the cigarette tax to $1 a pack would generate about $100 million a year that could be used to shore up the pension system for government retirees.

House Speaker Greg Stumbo told reporters that that's one of several options House lawmakers are considering to bolster the pension system, which has a $33 billion unfunded liability.

The Republican-controlled Senate passed a bill last week that requires the state to make its full contribution to the pension system but doesn't identify a funding source to do that. Stumbo said the Democratic-led House wants a designated funding source.

The Senate bill also would create a 401(k)-like hybrid retirement plan that some House lawmakers want to remove from the legislation.