Governor Mark Dayton opposes House Republicans’ plan to eliminate the automatic annual increase in Minnesota’s cigarette tax, freezing it at $3.04 per pack. Dayton says, “I don’t know why we want to give tax breaks to cigarette companies…. That’s revenue that comes out of the school programs or other places where it can be well-used.” But House Speaker Kurt Daudt says the cigarette tax “broke the promise that Democrats made to Minnesotans when they said they were only gonna tax the rich. It’s basically one of the most regressive taxes that you can put on Minnesotans, just like the gas tax.” Republicans floated a trial balloon last week for what could become a controversial issue in the 2017 legislative session.
The Minnesota Retailers Association is pushing for the change. Spokesman Brian Carr told lawmakers at a hearing last week, “Minnesota now has the seventh-highest cigarette tax rate in the country, and automatic adjustment drives consumer prices up to a level that is simply uncompetitive for our retailers.” But Duluth D-F-L Representative Jennifer Schultz opposes the bill, saying the cigarette tax automatic inflator should stay in place. “We spend a lot of money in the state on health care related to smoking,” Schultz says, adding that former governor Tim Pawlenty called the cigarette tax a health care “user fee.”
Here are Speaker Daudt’s comments from last week: