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UPDATE 1-Republicans slam Va. cigarette tax hike
December 16, 2008 / 10:38 PM / 9 years ago

UPDATE 1-Republicans slam Va. cigarette tax hike

(Adds comment from spokesman for governor)

NEW YORK, Dec 16 (Reuters) - Virginia Republican House Speaker William Powell on Tuesday criticized a purported plan by the Democratic governor’s to double the tax on cigarettes and said there were better ways for the state to close a widening budget deficit.

“Let’s address the root problem rather than going out and addressing taxes, and especially not addressing taxes in a period of economic uncertainty,” Howell told reporters during a telephone news conference held with Congressman Eric Cantor.

Cantor, also a Republican, said raising cigarette taxes was an “all-out attack ... and an assault on jobs here in Virginia and the greater Richmond area.”

Tobacco giant Philip Morris (PM.N) is based in Richmond, after relocating there from New York earlier this year.

Gov. Timothy Kaine will propose raising the tax on a pack of cigarettes to 60 cents from 30 cents as part of a broader plan to close the state budget shortfall, the Richmond Times reported on Tuesday.

The governor is also planning to ask for $400 million in cuts from education and healthcare and to seek 1,500 layoffs of state employees and a $500 million withdrawal from the state’s rainy-day fund, the report said.

    Kaine is due to outline his proposals to the General Assembly on Wednesday and is expected to estimate the budget deficit at $2.9 billion.

    Howell and Cantor argued that a cigarette tax hike would send the wrong signal to other states, which might be more inclined to raise their cigarette taxes. That could lead to job losses in the tobacco industry, especially in Virginia.

    A spokesman for the governor said he could neither confirm or deny the report ahead of Kaine’s speech on Wednesday.

    Reporting by Ciara Linnane; Editing by Dan Grebler

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