And now:Ish <[EMAIL PROTECTED]> writes:
Cigarette foes attack state tax
reimbursement to tribes
http://www.jsonline.com/news/Metro/990221cigarettefoesattackst.asp
By Meg Jones
of the Journal Sentinel staff
February 21, 1999
Wisconsin's Indian tribes received more than $11 million from
the state for selling cigarettes last year, and that's
drawing fire
from an anti-tobacco group upset that the state is spending
less
than one-tenth that amount on anti-smoking efforts.
Under a 16-year-old agreement, the state reimbursed Indian
tribes $11.3 million for cigarette taxes last year, a jump
of $3.5
million over the previous year. The state reimburses tribes
70% of all taxes collected on cigarette sales to non-tribal
members and 100% of the taxes for sales to tribal members.
The Tobacco-Free Wisconsin Coalition is questioning why the
state is spending only $1.4 million on stop-smoking initiatives
such as TV commercials and billboards, yet reimburses $11
million to the tribes.
"There's no good public policy reason to take our general
revenue dollars to transfer it to tribes so they can sell
low-cost
cigarettes," said David Ahrens, executive director of the
coalition. "If we're going to do anything with $11 million,
let's
deal with the issue of people who want to quit smoking."
In an interview, Gov. Tommy G. Thompson said the state
budget he unveiled last week includes a provision to cut the
amount of cigarettes taxes returned to the tribes to 50%. State
officials also have discussed the issue with the tribes during
gambling compact negotiations, he said.
"That's going to be very controversial," said Thompson.
Since the state cigarette tax increased by 15 cents, to 59
cents,
last year, "tribes are getting much more money. They're
getting a bigger break," the governor said.
Added Administration Secretary Mark Bugher, "You can
argue the tribes won't lose any money" with a change in
percentage because the per-pack tax is higher. "We think it
should be more in line with 50-50."
An official with the Oneida tribe declined to comment on the
issue. Phone messages left for chairmen of the Ho-Chunk,
Lac du Flambeau and Menominee tribes were not returned.
Wisconsin signed an agreement in 1982 to return 70% of
cigarette taxes to tribes that sell cigarettes at casinos and
stores. The only tribe not included in the agreement is the Bad
River band of the Chippewa, which sells cigarettes without
state tax stamps to tribal members and packs with stamps to
non-tribal customers. In the beginning, the reimbursement to
the tribes wasn't a lot of money, but as state cigarette taxes
went up, so did payments to the tribes. Then the tribes began
selling many more packs of Marlboros, Newports and Lucky
Strikes.
When the payments first started, state legislators probably saw
it as a way to provide financial assistance to Wisconsin's
tribes, Ahrens said.
"But as cigarette prices and cigarette taxes have increased, it
has become a substantial cost for the state at the same time
it's
become quite lucrative for the tribes," he said.
Cigarette sales have boomed for the tribes. In 1982, when the
law into effect, tribes sold 19 million packs at 25 cents less
than non-tribal sellers, according to Department of Revenue
figures. Last year, tribes sold more than 27 million packs with
a price difference of 41 cents.
In fiscal year 1996-1997, the state returned $7.74 million to
Indian tribes. The large increase the following year was due
mostly to the increase in cigarette taxes from 44 cents to 59
cents per pack in November 1997. The amount of reimbursed
taxes to the tribes increased from 31 cents to 41.3 cents per
pack.
State Rep. Peter Bock (D-Milwaukee) said the Legislature
should look into changing the percentage of cigarette taxes
returned to tribes from "both a public health standpoint and
from a revenue standpoint."
Bock said the deal is unfair to non-tribal stores that sell
cigarettes in the vicinity of tribal smoke shops. Typically,
those businesses must sell cigarettes at a lower price, but
without the tax advantage, to compete with the tribal stores.
"I, too, don't want to be taking money from the tribes, who, in
many cases, are in rough situations. But the policy here seems
to be you're making available cheap cigarettes, which works at
cross purposes to raising the cigarette tax last year," said
Bock.
"We raised it by 15 cents to discourage kids from taking up
smoking."
Many smokers buy their cigarettes from tribes, even traveling
many miles to do so. Such cigarettes are much cheaper since
tribes must charge only 18 cents in taxes on each pack.
Because they sell so many cigarettes in a relatively small
number of locations, tribal smoke shops often get hefty
discounts from manufacturers.
"Our problem is not that the tribes make an extra $11 million,
but it gives these low-cost islands to the tobacco industry,"
Ahrens said. "It drives down the prices of cigarettes all
around
those places. As a matter of good health policy, higher
cigarette prices mean more people giving up smoking."
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Tsonkwadiyonrat (We are ONE Spirit)
Unenh onhwa' Awayaton
http://www.tdi.net/ishgooda/
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