There’s a battle brewing at the State Capitol over Republicans’ proposal to freeze the state’s cigarette tax at $3.04 per pack, eliminating the annual increase tied to the average retail price of cigarettes. House Speaker Kurt Daudt supports the plan, saying 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.” Democratic Lieutenant Governor Tina Smith says she hasn’t seen the bill, but likes the cigarette tax “just exactly the way it is.” Smith says, “The benefit of the inflator is that it keeps pace with [cigarette] prices as they change.”
Supporters say the cigarette tax helps pay for health care and discourages smoking. Republicans respond even with their plan, Minnesota would still have one of the highest cigarette taxes in the country which would continue acting as a deterrent.
At a Wednesday hearing, Brian Carr with the Minnesota Retailers Association told lawmakers he supports the bill, adding “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 Representative Jennifer Schultz, a Democrat from Duluth, said the cigarette tax automatic inflator should stay in place. She says, “We spend a lot of money in the state on health care related to smoking. One of our former governors — Pawlenty — called it a health care user fee.”
Lawmakers haven’t voted on the bill yet. That will likely come later when they consider it as part of other proposed legislation.
Here’s an interview with House Speaker Kurt Daudt, who says he supports freezing the cigarette tax: