Ohioans should expect to pay more for alcohol and cigarettes if Gov. Bob Taft’s new proposal to balance the budget is passed through the General Assembly in the next few weeks.
To alleviate the $720 million deficit facing the state, Taft will be putting together a package that will include spending cuts and revenue enhancements. The proposal will be presented to the legislature Monday.
Andrew Herf, spokesman for the Wholesale Beer and Wine Association of Ohio, said he believes the “sin tax” is just a short-term bandage for the state’s financial problem and it will not be a long-term solution.
“We should not be held responsible for the government’s out of control spending,” Herf said. “(The government) is turning to us because we are a quick fix. They need to understand that we cannot be the only solution to their substantial problem.”
In June, the legislature voted to increase the cigarette tax by 31 cents a pack but rejected Taft’s request for a higher hike. Taft is expected to propose an additional 45 cents tax increase with the new plan.
Rep. Timothy Grendell, R-Chesterland, said he expects a good debate about this tax proposal.
“Governor Taft opted for the ‘sin tax’ because that state can collect on those funds immediately,” Grendell said. “It will be interesting to see how anxious the General Assembly will be to tax the public again.”
Strong opposition is expected to come from retailers in the border areas of Ohio because of the possibility of consumers driving an extra five miles to save 50 cents to $1 on cigarette packs.
Another opposition to the proposal is the burden put on a few merchants, rather than broadly affecting all vendors in the state.
The governor is expected to reveal the remaining details of his tax reform structure today in a press conference. The tax reform plan is being proposed to address the budgetary problem for the 2002-04 period.
The deficit for the 2002-04 budget is expected to be $4 billion. To coincide with the increase in taxes, Taft will be cutting spending through an executive order to help balance the budget.
By Ohio law, Taft has until June 30 to generate enough funds to solve the state’s financial woes.
“Historically, taxes on alcohol and cigarettes have been the best way to generate revenue quickly,” said Orest Holubec, Taft’s press secretary.
House Minority Leader Chris Redfern, D-Port Clinton, said he opposes the idea and terminology of the “sin tax.”
“We will not support taxes that are placed on the shoulders of the poor,” he said. “There are no guarantees that this tax plan will solve the state’s financial problems.”
“Demonizing a segment of the population because they occasionally drink is fundamentally wrong,” Redfern said.
