Kaine Defends Proposal to Double Cigarette Tax

RICHMOND, Va. -- Gov. Timothy M. Kaine defended his proposed doubling of Virginia's cigarette tax from attacks by Republicans and the tobacco industry, who called it a "job killer."
Boosting the per-pack tax on smokes from 30 cents to 60 cents was part of an austere budget that addresses a $2.9 billion shortfall through state layoffs, substantial cuts to public schools and health care, and early release of nonviolent prisoners to reduce jail crowding.
Leaders of the GOP-controlled House lambasted the proposed tax increase, calling instead for unspecified "reprioritizing" of spending priorities.
The reduction in cigarette sales from the increased cost, they asserted, would harm tobacco industry jobs in Virginia, where cigarette giant Philip Morris supplies the globe with Marlboros and Virginia Slims from the world's largest cigarette factory in Richmond.
Kaine said he offered the second increase in Virginia's cigarette tax in five years to soften more than $418 million in health care cuts that would apply chiefly to Medicaid, the federal-state partnership that helps cover medical needs for the indigent, elderly, blind and disabled.
It limits eligibility for those seeking Medicaid benefits, freezes provider reimbursement rates and delays new services but does not affect the eligibility of current recipients.
The administration estimates the higher tax on smokes will add $148 million in state revenue, without which the state Medicaid program would be cut even deeper.
"That stuck me as a much more prudent course than basically kicking people off the Medicaid rolls," Kaine told reporters.
Kaine's cuts to public schools, nearly $400 million, are targeted to staff other than school teachers, limiting the use of state funds for hiring support personnel such as aides and administrative staff. It doesn't take effect, however, until the 2009-2010 school year.
His proposal calls for cutting about 1,500 state jobs and eliminating planned pay raises, at least through June 2010.
The cuts are the fourth Kaine has imposed since October 2007.
Copyright AP - Associated Press
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