Daniels to seek cigarette tax hike

INDIANAPOLIS - Gov. Mitch Daniels said Friday he would seek an increase in cigarette taxes during the 2007 legislative session, something he has been strongly suggesting over the past few weeks that he would do.\nDaniels also told reporters that he is sending apologies to people who had contacted his office with complaints about the numerous problems that have recently plagued the Bureau of Motor Vehicles because of a new computer system.\nHe announced Thursday that for the rest of August, he had ordered the BMV to waive any late fees incurred as a result of people who missed a July 31 deadline for registration renewals.\n"The people, at least the vast majority of people who were inconvenienced, were inconvenienced through no fault of their own and it just seems like the right gesture," he said of the penalty waivers.\nDaniels had wanted lawmakers to increase cigarettes taxes 25 cents per pack in this year's legislative session, saying it would help reduce smoking. His proposal would have raised the tax from 55.5 cents per pack to 80 cents per pack. But it went nowhere.\nThe governor said it should come as no surprise that he would push for another increase when lawmakers convene in January. He said good ideas are worth pursuing even if they initially fail.\nState Health Commissioner Judy Monroe said recently that some advocates wanted an increase of 50 cents or more per pack. Daniels was told of that by a reporter on Friday, but he did not suggest what the increase should be.\nIndiana's current tax is the 37th lowest among the 50 states and three U.S. territories, according to June and July data compiled by the National Conference of State Legislatures. It is lower than three of Indiana's four surrounding states, but higher than Kentucky's rate of 30 cents.\nA telephone survey of more than 5,600 Hoosiers released in May showed smoking rates had risen from 24.8 percent in 2004 to 27.3 percent last year, ranking Indiana second in the nation behind Kentucky in the percentage of smokers. That was up from seventh place in 2004.\n"What we are laying the groundwork for is a major offensive to improve the health of Hoosiers, and it goes well beyond cigarette smoke," Daniels said. "But there is no credible approach to a healthier Indiana that doesn't include changing our status as the second highest smoking rate state in America.\n"It has been proven over and over again that the single best way to deter a young person or a nonsmoker from taking it up is a higher price."\nThe governor said extra revenue from a higher tax should be dedicated to health programs, including those aimed at smoking cessation and prevention.\nA $32 million computer upgrade at the BMV, completed when branches were closed from July 1 through July 4, is intended to improve customer service, produce more accurate data on licenses, titles and registrations, and make that information more secure.\nBut it has resulted in numerous problems, forcing many people to wait in line for hours to complete transactions and created headaches for police and prosecutors. Some transactions could not be completed at all, and although Daniels said improvements have been made daily and most major problems have been fixed, a few remain.\nDaniels' office has sent 199 e-mails so far with an apology from him to people who had complained via e-mail about their recent BMV experiences. Betsy Burdick, an aide to the governor, said more e-mail complaints were coming in and the office would respond to them as well.\nShe said a list was being compiled of people who complained by phone or letter, or had sent complaints to the BMV, and they also would get apologies. In addition, Daniels' office was reviewing transactions at the BMV to try to identify others who experienced problems but didn't complain so apologies could be sent to them.\nDaniels said in his e-mail apology that the conversion started six years ago under a previous administration, and it was still incomplete and had problems when he took office. But he nonetheless apologized, saying his team should have found a way to manage a bad situation.\n"While this is perhaps the most complex and difficult systems installation any state agency has ever attempted, the extent of the disruption and delay was inexcusable," he wrote.