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Estimate: Higher tobacco tax could raise $585M
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ATLANTA (AP) — Georgia could raise an extra $585 million by increasing its tobacco taxes, according an analysis by Georgia State University that comes as state leaders seek ways to pay for transportation projects.

Researchers at Georgia State University predict that raising Georgia's cigarette tax to $1.60 per pack would still generate an extra $554 million by 2020, even though some people would likely quit smoking because of the increased cost.

The Atlanta Journal-Constitution reports that smokers in Georgia pay a 37-cent tax on cigarette packs, one of the lowest taxes in the country. The tax rate has not increased in more than a decade. Taxpayer-funded health care programs pay for the treatment of smoking-related illnesses.

"The 82 percent of Georgia's adult population that doesn't smoke is heavily subsidizing the 18 percent who do smoke," said state Sen. Chuck Hufstetler, R-Rome, who supports raising the tax and requested the analysis. "The people who do smoke need to pay their fair share."

The potential source of funding may prove tempting as Gov. Nathan Deal and state lawmakers seek ways to pay for transportation projects.

One proposal from House lawmakers would eliminate a state sales tax on motor fuels and phase out the local taxes on gas. Instead, the state would charge an excise tax of 29.2 cents per gallon. Local governments could add a 6-cent tax, too. That legislation would not affect the state's cigarette tax.

The proposal would have critics. Jim Tudor, a lobbyist for the Georgia Association of Convenience Stores, said raising cigarette taxes to $1.60 a pack would encourage people in Georgia to buy their tobacco in neighboring states that charge less.

"Anyone who proposes to simply raise the price of any item to a national average without understanding the competitive market that one deals in obviously does not operate a retail business," Tudor said. "We don't compete against New York, we don't compete against California. We do compete with South Carolina, Alabama, Tennessee and Florida."


Information from: The Atlanta Journal-Constitution,