Even though Gov. Rick Perry promised not to raise taxes in the just completed Legislature, one tax increase bill was approved by the lawmakers and has been signed by the governor, 1200 WOAI news reports.
The bill will raise taxes on cigarettes produced by so called 'small tobacco' companies, which were not affected by the 2003 tobacco lawsuit settlement. That settlement prompted Philip Morris and other large tobacco companies to raise prices on their cigarettes, and Dr. Eduardo Sanchez of the Texas Public Health Coalition says the tax increases just approved will simply 'level the playing field.'
"The tax that is on them is a tax that makes them equal, on the same level, as those tobacco products which are inside of the tobacco settlement agreement," Sanchez said.
Sanchez says the tax is designed to do the same thing that the tobacco settlement was designed to do, force the prices of cigarettes up so young people will think twice about taking up smoking.
"That translates into a lower likelihood, particularly of adolescents and low adults, to even start smoking, because it is too expensive for them," he said.
The new tax will jack up the price of a pack of cigarettes made by 'small tobacco' companies by 55 cents a pack.
The small tobacco companies say the new tax is unfair and they have filed suit to block it.
The lawsuit claims that HB 3536 was designed to 'protect the market share of the Big Tobacco manufacturers.'
"Under the Act, only cigarettes manufactured by 'non settling manufacturers' are subject to the tax," the lawsuit claims. "Thus, Big Tobacco defendants who were targeted for their illegal conduct in those lawsuits are wholly exempted from the tax."
The small tobacco companies claim the new tax violates the Equal Protection clause of the U.S. Constitution.
Sanchez says it is part of a greater effort to rein in smoking among younger Texans.
"The Legislature did approve an increase in funds to build tobacco cessation programs," he said.