Louisiana House Bill HB417

Louisiana 2013 Regular Session

• Introduced: 4/8/13
• Refer: 4/8/13

Caption

Increases the state tax on certain tobacco products and dedicates the monies (OR +$132,000,000 SD RV See Note)

Impact

The passage of HB 417 would have a profound impact on tobacco laws and state revenue. The bill is anticipated to generate approximately $132 million in additional revenue, which will be directed towards essential programs. Notably, 52% of the funds are earmarked for the Louisiana Medical Assistance Trust Fund, primarily to support the state Medicaid program. This earmarking is critical as it directly affects the state’s ability to provide healthcare to its residents, particularly those in lower-income brackets who rely on Medicaid services.

Summary

House Bill 417 proposes a significant increase in taxes on various tobacco products, including cigars, cigarettes, and smokeless tobacco. The bill adjusts the tax rates dramatically, raising the tax on cigars and smokeless tobacco from 20% and 33% to a uniform rate of 68% of the invoice price, while the tax on cigarettes would go from 36 cents to $1.41 per pack. It also introduces a special fund known as the Louisiana Healthier Families Fund, designed to allocate the additional revenue for specific health-related initiatives including Medicaid and smoking cessation programs.

Sentiment

The sentiment surrounding HB 417 appears to be mixed among lawmakers and the public. Proponents argue that the increased taxes are a necessary public health measure aimed at reducing tobacco use and the healthcare costs associated with smoking-related diseases. They believe the funding for smoking cessation and prevention programs will significantly benefit public health. Conversely, opponents express concern that such high taxation may disproportionately affect low-income individuals and question the effectiveness of such tax increases in curbing tobacco usage. This division reflects broader debates about public health policy versus economic implications.

Contention

While many agree on the need for public health funding, the approach of HB 417 raises potential contentions regarding the impact of tax increases on small businesses and tobacco users. Critics argue that excessively high taxes may lead to illicit trade or other unintended consequences, undermining the stated goals of the bill. Moreover, the allocation of funds provides a point of contention as some advocate for more resources directed to education and prevention rather than merely funding existing structures like Medicaid and state police. This complex interplay of public health and economic policy will continue to foster debate in legislative sessions.