House rejects cigarette tax increase

INDIANAPOLIS – The Indiana House rejected legislation Tuesday that would have increased cigarette taxes to fund health care initiatives, something Republican Gov. Mitch Daniels has advocated as a top priority.\nThe House voted 52-44 against the bill on a deadline day for advancing bills to the Senate. It would raise the state’s current cigarette tax of 55.5 cents per back by 25 cents, with the new revenue used to provide health insurance to low-income Hoosiers – primarily children.\nDemocrats control the House 51-49 and got the proposed tax increase through committee and to the floor, but the bill’s author, Rep. Charlie Brown, D-Gary, had said that he wanted at least 25 Republican votes to make it a truly bipartisan bill. That would make it hard for either party to solely blame the other in the next campaign for supporting a tax increase.\nBut only 19 Republicans joined 25 Democrats in voting for the bill. Brown blamed Daniels for not lobbying House Republicans enough to get the bill passed on a truly bipartisan basis.\n“If he can’t produce 25 votes over here (among Republicans), is he worthy of being on the second floor?” Brown said.\nDaniels has asked lawmakers to increase cigarette taxes by at least 25 cents per pack to reduce smoking and generate an estimated $130 million a year in new money. That would be leveraged with federal funds and participant costs to raise $480 million and among other things provide health coverage for about 120,000 people earning less than double the federal poverty level for their households.\nA version of his plan passed the Senate, but it did not include a way to pay for it.\nProposed tax increases are supposed to begin in the House, and a Democrat-controlled committee unanimously approved an initial Brown plan that would raise cigarette taxes by 54.5 cents per pack. The increase was lowered to 25 cents in another committee and many provisions, such as allowing local units of government and small businesses to join the state’s health insurance plan, were removed from the bill.\nBrown said House Democrat leaders wanted it lowered in hopes of getting it through the House and to the Senate. But the reduction did not win the day.\nSenate Tax Chairman Luke Kenley said the Republican-ruled Senate could put a cigarette-tax increase in a bill to keep the issue alive, but said he was unsure whether that would occur.\n“I don’t know if we will if the House cannot pass this,” said Kenley, R-Noblesville. “That may be a signal that there is a lack of willingness to do that. We wouldn’t rule it out now,” he said.\nHouse Speaker Patrick Bauer, D-South Bend, said at noon Tuesday that the House would probably pass a cigarette tax that day.\n“I think it’s probable, but nothing is certain,” he said.\nBrown seemed optimistic at that point, too.