Legislature(2003 - 2004)

2004-06-22 House Journal

Full Journal pdf

2004-06-22                     House Journal                      Page 4449
HB 1001                                                                                           
HOUSE BILL NO. 1001 by the House Rules Committee by request of                                      
the Governor, entitled:                                                                             
     "An Act relating to taxes on cigarettes and tobacco products, to                               
     tax stamps on cigarettes, to forfeiture of cigarettes and of property                          
     used in the manufacture, transportation, possession, or sale of                                
     unstamped cigarettes, to accounting for and use of part of the                                 
     proceeds of the additional cigarette tax, and to licenses and                                  
     licensees under the Cigarette Tax Act; relating to unfair cigarette                            
     sales; and providing for an effective date."                                                   
was read the first time and referred to the Labor & Commerce and                                    
Finance Committees.                                                                                 
The following fiscal note(s) apply:                                                                 
1.  Fiscal, Dept. of Public Safety                                                                  
2.  Fiscal, Dept. of Revenue                                                                        
The Governor's transmittal letter dated June 21, 2004, follows:                                     
"Dear Speaker Kott:                                                                                 
Under the authority of article III, section 18 of the Alaska                                        
Constitution, I am transmitting a bill that increases the cigarette excise                          
tax by $1.00 a pack and makes other changes in our current statutes.                                
The tax on "other tobacco products" such as smokeless tobacco would                                 
be increased from 75 percent to 100 percent of the wholesale cost.                                  
Passage of these tax increases is supported by the health benefits                                  
alone.  Tobacco is the number one preventable cause of death,                                       
disability, and chronic illness in Alaska.  It is public health enemy                               
number one.  I want these tax increases to reduce consumption of                                    
tobacco products in Alaska.  Such a decrease will benefit adult                                     
smokers who decide to quit, teenagers and pre-teens who decide to                                   

2004-06-22                     House Journal                      Page 4450
quit or not start smoking, and Alaskans that choose not to smoke but                                
suffer the ill effects of second hand smoke.                                                        
Current estimates are that passage of the cigarette tax should result in a                          
15 percent drop in illegal teen smoking.  A 15 percent drop in youth                                
smoking rates from current levels translates into 1,800 lives saved                                 
from premature death due to tobacco addiction.  My hope is that even                                
more Alaska teens decide not to try smoking or break their addiction                                
to cigarettes.                                                                                      
Among current adult smokers, 3,500 will quit smoking because of the                                 
tax, and of those, 800 will be saved from a smoking-caused death.                                   
Smoking among expectant mothers would also be reduced                                               
significantly; resulting in 850 babies being spared from exposure to                                
maternal smoking prior to delivery during the next five years.                                      
Alaska Natives should particularly benefit from reduced smoking.                                    
While smoking rates are declining within the U.S. general population,                               
the rate of smoking is unchanged among Alaska Native adults and, at                                 
44 percent, is almost double that of non-Natives.  Currently, 44                                    
percent of Alaska Native high school students smoke almost four                                     
times the rate among non-Native students.  Lung cancer, the leading                                 
cause of cancer deaths, is increasing at an alarming rate among Alaska                              
Natives of both sexes.  Cardiovascular disease, including heart disease                             
and stroke, is also linked with tobacco use, and kills approximately                                
120 Alaska Natives each year.                                                                       
In order to ensure we achieve these health benefits, I have included                                
language that earmarks part of the tax revenues for the smoking                                     
education, tobacco use prevention, and tobacco control program.  At                                 
the level I have included, Alaska would become one of five states that                              
fund tobacco cessation programs at or above the level recommended                                   
by the Centers for Disease Control.                                                                 
I have also included a significant increase in the tax on smokeless                                 
tobacco.  Other forms of tobacco such as chew or cigars also present                                
serious risks to the health of users.  For example, smokeless tobacco                               
users may be up to twice as likely as non-users to die from heart                                   
disease and other cardiovascular conditions due to increased blood                                  

2004-06-22                     House Journal                      Page 4451
There is also an important fiscal benefit in this bill.  The new revenues                           
generated by the tax increases will help reimburse a portion of the                                 
approximately $270 million in annual costs for direct medical                                       
expenses and lost productivity attributed to tobacco use in Alaska.                                 
The financial burden all Alaskans are stuck with because some                                       
Alaskans smoke should be reduced.   This bill targets users and asks                                
them to pay a bit more of the costs they impose on all Alaskans.  I                                 
believe many Alaskans would argue they should not be stuck with any                                 
costs for someone else's voluntary choice to use a dangerous product.                               
Given the health impact, cost savings, and revenue to be generated                                  
from the proposed tobacco tax, I urge your support for this legislation.                            
                                 Sincerely yours,                                                   
                                 Frank H. Murkowski