Legislature(2003 - 2004)

2004-06-22 Senate Journal

Full Journal pdf

2004-06-22                     Senate Journal                      Page 3838
SB 1001                                                                                           
SENATE BILL NO. 1001 BY THE SENATE 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                                          

2004-06-22                     Senate Journal                      Page 3839
             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 and Commerce                                      
The following fiscal information was published today:                                               
 Fiscal Note No. 1, Department of Revenue                                                           
 Fiscal Note No. 2, Department of Public Safety                                                     
Governor's transmittal letter dated June 21:                                                        
Dear President Therriault:                                                                          
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 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.                                                                                      

2004-06-22                     Senate Journal                      Page 3840
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                                  
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.                                         

2004-06-22                     Senate Journal                      Page 3841
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