A budget built by smokers
Madison - State budgets were once crafted in smoke-filled rooms, but this year's budget agreement, passed easily by the Legislature Thursday, is built on smoke itself - an 18-cent-a-pack increase in cigarette taxes, and selling off Wisconsin's tobacco set
The Assembly voted 73-22 to pass the budget, the Senate 25-8.
Lawmakers balanced the $47 billion state budget on the backs of Wisconsin smokers, both living and dead, as it faced sagging tax collections and a soft economy.
"When you're dealt a hand with lower revenue than you thought, the tobacco tax helps you balance the budget and also helps prevent people from smoking," said Rep. John Gard (R-Peshtigo), a member of the budget conference committee.
The cigarette tax increase will generate an added $130.5 million over the two-year budget; much of that will go to fund the senior prescription drug benefit also included in the budget. It boosts the cigarette tax from 59 cents to 77 cents a pack.
In addition, the deal increased the tobacco products tax, on items such as pipe tobacco and cigars, from 20% to 25% - a move that will raise an added $5.5 million over two years. The Legislature's Joint Finance Committee had recommended a 30% tax.
In Milwaukee, smokers interviewed downtown weren't happy to hear about the tax increase, but most said they supported the cause of the increase.
"The prices are high enough already and they keep going up," said David Benner, 27, of Milwaukee. "I guess that's for a good cause, though."
Said Valerie Pasbrig, 46, of West Allis: "I'm surprised they're hitting smokers again, as opposed to some other group. But I don't mind what the money's going for. I don't think we do enough for our elders."
Pasbrig also said the creeping prices might inspire her to give up the habit. "This is going to be one more nudge in the quitting direction," she said.
The budget compromise approved by lawmakers also gives Gov. Scott McCallum's administration the go-ahead to trade some $5.9 billion in future tobacco settlement payments for $1.3 billion now.
But instead of applying $350 million from the trade-off to the 2001-'03 budget, as McCallum suggested, lawmakers agreed to pump $450 million of the proceeds into the budget to help ease the state's budget woes.
What's left from the settlement funds would be placed into a trust fund.
In debate over the budget in the Assembly Thursday, Rep. Sheldon Wasserman (D- Milwaukee) lashed out at the idea of selling off the settlement for only about 20 cents on the dollar - for what he said was short-term gain. He called the settlement "blood money" from the deaths of state smokers.
"We're cashing in our children's future," Wasserman said. "This is sacred money. For us to spend it on potholes and legislative perks is just wrong."
Wasserman, a physician, predicted that the state would continue to nibble way at the trust fund to satisfy budget needs.
"Before we know it, the entire $1.3 billion will be gone; this will make us the laughingstock of the nation," Wasserman said.
But Rep. Frank Urban (R-Brookfield), another physician, defended the sell-off.
"There is no guarantee we'll get what we're supposed to get - that depends on the financial viability of the tobacco companies," Urban said.
In another provision of the budget deal - a new twist - legislative leaders have agreed to provide a permanent funding source for the state Tobacco Control Board. It would receive the first $25 million each year in investment gains from the trust fund to use for its anti-tobacco efforts statewide, beginning in 2003.
David Gundersen, the board's executive director, was relieved that lawmakers approved the plan, which will end his two-year cycle of lobbying for funding, and guarantee anti-tobacco funding.
"If there were no funds dedicated to long-term prevention, it would be a travesty," said Gundersen.
In the coming two-year budget, the board's funding was trimmed from $21 million to $15 million a year.
"Regardless of the short term, the fact that we now have a long-term commitment means we can do the long-range planning," Gundersen said. "You don't change smoking behavior in one year, two years or three years. It takes that long-term commitment."
Urban, too, praised the plan to provide the $25 million to the Tobacco Control Board.
"It's important that we convince our young citizens, and older citizens, that it's time to quit if they want a future," Urban said.
Sen. Judy Robson (D-Beloit) said the plan would strengthen efforts to cut smoking statewide, and assure that tobacco settlement money will go to anti-smoking efforts.
"Secure funding for the Tobacco Control Board means that we do not have to engage in a battle against Big Tobacco every two years to scrape up a mediocre amount of funding," Robson said.