Kansas Health Institute | Information For Policy Makers. Health for Kansans.

TOPEKA — All but two members of the Senate tax committee are from a county or district bordering Missouri, so opponents of a tobacco tax increase got a friendly hearing Wednesday when they warned that Kansas shoppers would avoid a new levy by crossing into the Show Me State to buy smokes, alcohol, gasoline and other goods.

"QuickTrip moved a store in Kansas City 100 feet so they could have a Missouri address at a cost of $3.4 million," said Tom Palace, a lobbyist for the Petroleum Marketers and Convenience Store Association of Kansas. "Retailers that compete on the border are hit hardest when tax increases are passed."

The Assessment & Taxation Committee is considering a number of tax proposals this week and next, including those that would raise taxes on tobacco, alcohol, sugary drinks and beginning Thursday, one that would raise the general state sales tax by 1 cent.

Vendors and their associations have lined up to protest the various plans and Tuesday the hearing was dominated by those who sell tobacco. Health advocates and other supporters of raising the cigarette tax 55 cents per pack to $1.34 testified Tuesday.

So far, no one on the committee has spoken publicly in favor of increasing the tobacco levy, but at least two members have announced they don't like the idea, including Sen. Julia Lynn, R-Olathe, who voiced her displeasure before hearing a word of testimony from opponents.

The opposition ranged from spokesmen for Big Tobacco to owners of "mom-and-pop" cigar shops that would see a quadrupling of the tax they currently pay the state. Senate Bill 516 also would increase the tax on tobacco products such as snuff and cigars from 10 percent of the wholesale price to 40 percent.

"I can't ever remember a 400 percent tax increase passed by the Legislature," former House Speaker Doug Mays told committee members.

Mays now lobbies for a cigar trade group.

Derrick Sontag of the anti-tax group Americans for Prosperity-Kansas also spoke against the bill.

"It's another tax increase," he said, "For us it's the same old story. Tax increases of any kind should not be used to pay for (government) overspending."

After two years and $1.3 billion of budget cutting, policymakers are trying to figure out how to close a possible $400 million to 500 million budget gap for the fiscal year that begins July 1.

Gov. Mark Parkinson, a Democrat, has proposed tax increases, saying most programs can stand no more cuts. Republican leaders in the Senate also are saying that about $300 million in new tax dollars must be raised to make budget.

But GOP leaders in the House have sung the same song as Americans for Prosperity, steadily insisting that the state's fiscal problem isn't one of too little taxes but too much spending.

Some opponents of a tobacco tax increase acknowledged legislators must do something to solve the budget riddle but urged them against singling out specific industries for tax increases, which is what three of the four tax proposal now before the committee would do.

"We're not opposed to adequately funding government, but try not to levy all the burden of the state's general needs on a targeted industry," said Phil Bradley, a lobbyist for the Kansas Licensed Beverage Association, the Farm Winery Association and the Craft Brewers' Guild.

Ron Hein, speaking for RAI Services, parent company of R.J. Reynolds tobacco company, told the committee that tobacco taxes fall hardest on people with lower incomes.

"The bottom half of U.S. households only reaped 16 percent of all income," he said, "but they paid 47 percent of tobacco taxes. Only 9 percent of people who smoke have incomes more than $50,000 a year."

Hein said he couldn't imagine lawmakers withstanding the outrage that would ensue if they proposed a tax that fell only on people earning less than $25,000 a year.