Should Virginia raise its cigarette tax? YES or NO?

YES:

Tough times for the national economy mean Virginians -- like all Americans -- are making tough decisions to weather the storm. Of all the choices facing the commonwealth's families today, the decision of whether to support the cigarette tax increase proposed by Gov. Tim Kaine should be a simple one.

At minimum, the cigarette tax presents a clear trade-off: Do we force people off Medicaid rolls at the worst possible time, or do we ask that smokers contribute more to the cost of their health care?

More broadly, the cigarette tax encourages individual responsibility -- a long-standing value among our citizens and our communities. While smokers have a right to smoke, they also have a duty to cover the costs of their actions -- rather than leaving taxpayers to foot the entire bill.

In the Virginia Medicaid program, health care costs related to smoking tobacco amount to approximately $400 million a year -- the equivalent of nearly $71 for every adult in Virginia. Meanwhile, increasing the cigarette tax by a mere 30 cents a pack would generate an additional $155 million for the Medicaid program.

For the commonwealth's most fragile citizens -- our seniors and children -- this influx of funding for the state's Medicaid program would reap tangible rewards. Not only would a funding increase of $155 million allow Virginia to maintain Medicaid eligibility at its current levels, the revenue raised from a cigarette tax hike would cover the costs of many key services for the Medicaid program.

Increased tax revenue would guarantee the commonwealth could meet Medicaid costs associated with heart disease, chronic lung disease and emphysema, health care for children, including those suffering from asthma, and prenatal care for women.

The cost to smokers would do anything but break the bank. Increasing the cigarette tax by 30 cents per pack will still leave Virginia with one of the lowest cigarette taxes in the country -- just half the national average of $1.18 per pack. Even for a "tobacco state" a move to 60 cents per pack would be a reasonable shift no matter what the condition of the economy.

At the same time, the threat to jobs in the cigarette manufacturing industry would be minimal, at worst. Because U.S. tobacco leaf is overwhelmingly smoked overseas in exported or foreign-made cigarettes, American smokers account for less than half of the total demand for our tobacco. Even if smokers in Virginia smoked less, the manufacturing industry would not have to reduce jobs because the overseas markets account for such a large portion of U.S. tobacco-leaf consumption.

On the other hand, job loss in the health care industry -- often the largest or second-largest employer in our communities -- could be disastrous if hospitals, nursing homes, and other providers are forced to endure another $155 million in cuts to their Medicaid rates. In rural communities in particular, health care providers offer some of the most stable employment and highest-wage jobs available.

By focusing only on potential job loss in the cigarette manufacturing industry, Virginians risk ignoring the impact that not raising the cigarette tax could have on health care providers and patients. When the commonwealth does not have quality health care providers, everyone across the state suffers -- smokers and non-smokers, cigarette manufacturers and health care providers, families and individuals.

If the General Assembly chooses not to adopt the cigarette tax increase, legislators will have to find cuts in the state Medicaid budget of another $155 million. Cuts there will directly damage our most vulnerable citizens and drive down employment in the most vulnerable regions of our commonwealth.

The governor's budget reflects months of line-by-line review of the state budget, and many difficult decisions about health care and other issues. He has proposed targeted strategies to steer the commonwealth through this fiscal crisis and ensure we emerge stronger at the end of it.

In this, the fourth round of budget cuts in two years, there's no fat left to be trimmed. The governor's proposal to increase the cigarette tax will hold off cuts that go into muscle and bone. In today's economy, we simply cannot make deeper cuts to the health care of low-income Virginians.

The governor has been willing to make tough decisions to get Virginia through a tough time. The cigarette tax is one of them, and it's the right thing to do.

Marilyn Tavenner is Virginia's secretary of health and human resources.

Should Virginia Raise Its Cigarette Tax? NO

FRANK RUFF

TIMES-DISPATCH COLUMNIST

If the proper role of government is to coerce or browbeat the public into the correct behavior according to the majority, then Gov. Tim Kaine is exactly right to propose yet another tax on the people of Virginia.

However, if, like me, you believe the role of

government is limited to only those functions that are for the common good of all citizens, then you should be gravely concerned about the modern concept of attempting to establish by government policy what is best for the individual.

Clearly, Kaine faced a daunting task amending the state budget. The economic turmoil each of us as individuals, families, and businesses have experienced has also rocked the finances of our state government.

Still, that is no excuse for not crafting a spending plan that meets our citizens' needs as well as possible -- and is as fair as could be done. On this count, the governor's efforts can stand considerable improvement.

One has to wonder on what the governor based this budget. Admittedly, his attention may have been focused elsewhere during the fall political season, but those days are past. On the national scene, one of his fellow Democrats was quoted as saying, "We can't let a good crisis go to waste." Perhaps that was on his mind when he steered his budget toward social engineering and away from basic needs.

Having failed in his efforts to ban smoking in restaurants, he now proposes doubling the tax on cigarettes, with the proceeds used to help fund health care. But here is what he doesn't tell you: More than the $154.9 million that would be generated by the cigarette tax increase is going to new, non-health care spending.

Here is how the shell game works: Kaine shifts current general fund dollars from Medicaid and replaces them with the proceeds from the new tax. That frees up the general fund to spend more on projects in which he wants to spend more taxpayer money. Meanwhile, there is no expansion or increased enrollment in health care programs that are matched to the proposed tax increase.

Look carefully at the governor's words. He pledges "to be willing to be innovative and invest new dollars in new areas that promise a return." Translated, that means even while average working Virginians are financially stressed, Gov. Kaine is willing to add to their burden if he believes that he has a better way to spend a family's money than does the family.

Apart from the deception involved, this is the wrong course to take in funding health care. The sale of tobacco products is going down every year in Virginia and across the nation. People's habits are changing. Do we really want to peg support for health care to a declining source of revenue?

Of course, smokers are an easy and convenient target. They are, after all, buying and using tobacco products voluntarily. Additionally, they also tend to be people with lower income and less political clout. However, does that make it right to single out one segment of our society to be the only one to bear higher taxes?

If it is really partly a health issue as the governor asserts, where does it end? What is next? A tax on sugared sodas as the governor of New York has proposed? A Big Mac tax as others have suggested? Why not raise the tax on alcoholic products?

And then there are simply the harsh economic realities to consider. The governor acknowledges "the current recession is shaping up to be longer than any other recession since World War II." Why then would he raise any tax?

I agree with the Democratic leader in the House of Delegates, Ward Armstrong, that this is not the time, period. On the national level, those who called for higher taxes last fall are retreating from that position. Perhaps Gov. Kaine should take a page out of their playbook.

I represent a part of Virginia far removed from the bustling metropolitan areas or leafy suburbs. Southside Virginia is hardscrabble country where honest, hardworking families who do what is right and play by the rules still have a hard time making ends meet.

Federal policies hastened the flight overseas of two pillars of our economy -- textiles and furniture manufacturing. Tobacco farming is waning as well. It is one thing for our communities to suffer hardships imposed by federal policies. It would be something else to feel the pain that would be inflicted by the proposals from our own Virginia governor.

In his budget address Kaine said, "Adversity reveals character. Our citizens will be watching us this session to see how their leaders handle things." I hope he is right. If so, we won't pick on any one class of citizens or taxpayers but will treat all with respect, dignity, and fairness.

State Sen. Frank Ruff, a Republican, has represented Southside Virginians in the General Assembly since 1994. His current Senate district is composed of all or parts of 11 counties stretching from the North Carolina border to the outskirts of Charlottesville. He is also the chairman of the Center for Rural Virginia.