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The Associated Press March 28, 2011, 10:42AM ET

Idaho budget cutters stymie cigarette tax hike

In recent days, Rep. Cameron Wheeler has fielded numerous phone calls from voters in his eastern Idaho district that took him a little off-guard.

"They told me, 'Vote for the cigarette tax increase,'" said Wheeler, R-Ririe, of the callers' message. "I told them, 'There isn't anything to vote for.'"

The people lighting up Wheeler's House floor phone's display panel were responding to full-page newspaper ads -- in Boise, Idaho Falls, Nampa and Twin Falls last week -- from a coalition of anti-smoking groups that have been pushing the proposed $1.25 per pack cigarette tax hike since before the 2011 session began in January.

The 31-member coalition, led by Campaign for Tobacco-free Kids, the American Cancer Society Cancer Action Network, argues raising the tax would discourage kids from starting smoking, but it also included this sweetener: It would raise about $50 million in tax revenue that would come in handy to fill budget holes as state tax revenue slumped yet again.

Their only problem is, Idaho lawmakers found other ways to fill what budget hole than raising taxes, including by cutting public education by $62 million and another $35 million Medicaid.

The crisis just wasn't big enough to force conservative Republicans into their worst nightmare -- raising taxes, regardless of their stripe.

"We don't need it," said House Majority Caucus Chairman Ken Roberts, R-Donnelly, of what ultimately killed the coalition's effort. "The budget is balanced."

Idaho's tax is now 57 cents, the same as South Carolina, a big tobacco producer. Heidi Low, the American Cancer Society lobbyist, said she was "extremely disappointed" her group's push to more than triple that never got off the ground -- even though they'd won a marquee sponsor, Rep. Dennis Lake, chairman of the House Revenue and Taxation Committee.

But Lake, a Republican from Blackfoot, says he couldn't muster enough support from his own panel to even win a bill introduction.

Rather than let the bill explode in ignominy, Lake instead decided to just quietly keep the measure in his drawer.

"It's certainly different than the way I saw this at the beginning of the session," Lake conceded. "I thought there'd be a clamor for it."

The clamor just never materialized.

Before the session, the budget gap was estimated at as much as $350 million for fiscal year 2012 starting July 1.

It turned out to be about $92 million -- big, but just not the disaster some had feared.

For Democrats who have been fighting the Medicaid and education cuts, that's still incentive enough to consider boosting the cigarette tax. For instance, smoking-related illness results in about $82 million in costs to Medicaid, so revenue from a cigarette-tax hike could have gone to fill that hole and ease the cuts elsewhere.

"When the ramifications of the cuts to Medicaid begin to affect people's daily lives, people are going to be very upset," said Rep. Wendy Jaquet, a member of the Joint Finance-Appropriations budget writing committee. "We've done some damage. Big damage."

From the beginning, those pushing the tax increase had an uphill battle.

The anti-tax group Americans for Tax Reform sent out a press release before the session -- distributed by an Idaho tobacco-company lobbyist -- urging lawmakers to just vote no.

And in one of the first votes of the 2011 session, the state House of Representatives killed a seemingly innocuous measure to raise fees by just $1.50 on those found guilty of violating Idaho laws -- to send a loud-and-clear message that tax or fee increases wouldn't be tolerated.

If lawmakers won't fees on criminals, it's a fair bet that they'll be tough to convince to raise them on smokers, too.

With the Idaho Legislature likely to adjourn during the first week of April, the question still remains: Will a budget crisis resurface when they return to Boise next January. Early estimates indicate that even if tax revenue growth in fiscal year 2013 lives up to current state government estimates, Idaho will be as much as $100 million short of what it needs to balance its budget.

If that happens, lawmakers who this session spent hours of hearings on Medicaid listening to heart-wrenching stories of disabled residents and their families how the loss of services will hurt their quality of life may be unwilling to make such cuts again -- and consequently, more likely to support the cigarette tax hike they deemed unnecessary this year.

Low, the head of the anti-smoking coalition, is hoping the economy rebounds.

If it doesn't, however, she'll be there to remind lawmakers they have a choice.

"The issue is definitely not dead," Low said. "We'll be back. It's good public health policy. We know that a bill like this would prevent 19 percent of youth from beginning to smoke."

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