Arkansas Governor Proposes Tobacco Tax to Fund Trauma System

The fight over how to fund a statewide trauma system in Arkansas is expected to heat up this week, with Gov. Mike Beebe planning to rally support for his $87.8 million proposal to hike tobacco taxes while opponents are readying an alternate plan.

Beebe’s proposal would raise cigarette and chewing tobacco taxes to pay for the statewide trauma system and a host of other health programs. Meanwhile, opponents of the governor’s tax hike say they plan to file their proposal to fund only a trauma system by increasing driving fines early this week.

Beebe’s called for a 56-cent-a-pack hike in the state’s tax on cigarettes and wants to raise the taxes on smokeless tobacco by an additional $10 million. Opponents say raising the fines for drunken and reckless driving can raise $27 million annually for a trauma system.

Beebe is selling the tax hike as a way to pay for $177.9 million in health programs that would also be funded by federal matching dollars. The proposed health plan includes an expansion of the state’s health insurance program for low-income children, money for food banks and increased funds for community health centers.

He also received a boost from his party last week, which sent an e-mail urging passage of the tax increase proposal.

“For years, smoking-related illnesses have burdened our Arkansas’s budget and drained resources that were desperately needed to care for our State’s people,” Democratic Party of Arkansas Executive Director Mariah Hatta wrote in the e-mail sent Friday. “Governor Mike Beebe has taken a bold stand in the face of big tobacco’s corporate interests and proposed a plan to right this wrong.”

Republicans, meanwhile, planned to push for their alternate proposal to raise the driving fines, a measure that Rep. Ed Garner said had drawn the support of “15 to 20” of his colleagues.

“The bottom line is, and the important thing is, there are many people in here concerned about raising taxes during a recession while the state has a surplus,” Garner said.

Garner said he’s backing the alternate plan because he thinks Beebe’s proposal for a trauma network and assorted health-care programs is too big for the state to take on during a national recession.

“They baked a bigger and bigger pie, so everyone can have a piece,” he said. “And they’re lobbying like crazy, and all these government officials are coming in, lobbying for this, because they’re getting some money.”

Tobacco companies are also pushing lawmakers hard on the proposal. Representatives of Philip Morris parent company Altria Group have been contacting legislators and reporters expressing their opposition to Beebe’s tax hike.

Bill Phelps, a spokesman for Altria, said the tax hike would end up hurting convenience stores that could lose customers because of the higher prices.

“It impacts small businesses who in many cases are already struggling in a troubling economic time,” Phelps said.

It’s unclear whether Beebe has enough votes to pass the tax hike. He will need 75 votes in the 100-member House and 27 in the 35-member Senate for a tobacco-tax increase.

House Speaker Robbie Wills said he thinks there are 30 or 40 House members who are already supporting the bill and about 10 who are opposed.

“We’ve got a lot of members who simply want to be clear about how this benefits the state and their district. A lot of folks want to see the bill first,” Wills said. “I’m confident we’re going to get there.”

Also this week, a House committee plans to consider a bill that would ban drivers from using handheld cell phones. The bill, by Rep. Ray Kidd, D-Jonesboro, will go before the House Public Transportation Committee on Tuesday morning.

Associated Press Writer Jill Zeman contributed to this report.