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LUCY MORGANA tax of 20 cents per pack receives preliminary Senate approval during an unusual weekend session.
TALLAHASSEE - A controversial tax on off-brand cigarettes gained new life Saturday as the Senate set the bargaining table for a final week of negotiations with the House.
After lengthy debate in an unusual weekend session, the Senate gave preliminary approval to a bill that would impose a 20-cent tax on each pack of off-brand cigarettes beginning July 1. The tax would increase to 40 cents per pack a year later. The Senate is expected to take a final vote Monday.
The measure would raise about $40-million the first year, $80-million the second, giving the state a much needed source of money. Of the total, the Senate would spend about $16-million a year to replenish programs that help stop teen smoking and $2-million to offset disparities in minority health care programs.
A similar bill died last month in the House on a 19-19 committee vote. But a spokesman for House Speaker Johnnie Byrd said Saturday that the House will consider the measure again "if it is a priority of the Senate."
Senate President Jim King, who has labeled the tax "a fairness fee," said he is not sure what the House will do.
Off-brand cigarette companies in Miami have hired more than 15 lobbyists to fight the tax, saying it would drive small companies out of business. The small companies have contributed more than $350,000 to legislative campaigns in the past few years.
Proponents of the tax say the off-brand companies are drawing an increasing share of the cigarette market, reducing the money Florida collects from big brands. The major tobacco companies have been taxed by the state since 1996, when they settled a lawsuit filed against them.
The bill's sponsor, Sen. Paula Dockery, R-Lakeland, said the five largest tobacco companies' share of the Florida market has declined from 98 percent of sales in 1996 to 82 percent now. As a result, the $620-million in cigarette taxes collected in 2002 dropped to $373-million in 2004.
If the off-brand companies that were not included in the 1996 settlement are going to sell a lot of cigarettes to Floridians, they should be willing to share the costs of treating tobacco related illnesses, Dockery suggested.
Sen. Fredericka Wilson, D-Miami, said the bill would cause some of the mom-and-pop companies in Miami to go out of business because it would force them to increase their prices. She said that would benefit the Liggett Group, a discount manufacturer that pays less money to the state because it broke ranks with the other big tobacco companies and negotiated its own settlement with Florida.
"A company that sells $100-million in cigarettes in Florida shouldn't be considered a mom-and-pop operation," Dockery argued. "They are hardly rolling cigarettes on the kitchen counter."
The off-brand cigarette companies are not likely to give up without a fight, and Gov. Jeb Bush has yet to take a stand on the measure.
Yolanda Nader, the chief executive officer for Dosal Tobacco, one of the Miami-based cigarette companies, denounced the bill. She said it was part of a market share grab by the Liggett Group which would be excluded from the new tax.
She said the added tax would force the smaller companies out of business and allow Liggett to dominate the market because they sell cigarettes at a price lower than the big brands but higher than the off-brands.
Brian Ballard, one of the lobbyists for Liggett, called the measure "a great bill" that would force everyone to pay the same tax.