Lorillard
870000 State of the States
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- Ak Health Dept
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- Brown, W.
- Bunning, J.
- Campbell, J.
- Carnes, B.
- Carpenter, P.
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- Deukmejian, G.
- Docking, T.
- Gionfriddo, P.
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- Grant, B.
- Grassley, C.
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- Harris, J.F.
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- Hull, J.
- Hunt, G.
- Inouye, D.
- James, F.
- Junkins, L.
- Kunasek, C.
- Lamm, R.
- Lane, J.
- Leroy, D.
- Lloyd, D.
- Martinez, R.
- Mcintee, J.
- Mcmanus, D.
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- Thurber, M.
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- Waihee, J.D. III
- Walsh, M.
- Warner, C.
- Wirth, T.
- Witt, E.
- Young, D.
- Zwick, C.
- Andrus, C.
- Date Loaded
- 05 Jun 1998
- Master ID
- 80420206/0485
Related Documents: - Litigation
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- TI, Tobacco Inst
- Characteristic
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FEB 0 5 19$?
1987
THE STATE OF THE STATES
Assessing the economic and political climate
of each of the 50 states as they affect the
tobacco industry; and evaluating industry
resources for action on legislation projected
for 1987.
0D
State Activities Division C
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THE TOBACCO INSTITUTE Q
O
GD
80420209
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PREFACE
The State of Alabama has many financial problems. The nature of
the tax system is conducive to an unbalanced budget. Alabama has
a compound taxing structure; that is, state level, county level
and local level. There is a redundancy in taxing with no
uniformity of rate. Urban areas benefit more than less populated
areas. In addition, the state allows earmarking of taxes which
means some programs suffer through lean economic times while
other programs enjoy surpluses.
This atmosphere is not favorable to industrial or economic
growth. The steel industry, which was once the pride of
Alabama's industrial complex, is all but dead. This has created
an unemployment situation which remains a constant burden.
The agricultural side of the economy is also hard-pressed for
survival, creating problems for banking and real estate. Alabama
needs an influx of semi-skilled manufacturing plants to remedy
its immediate employment and economic woes.
The state's market share is 1.6 percent.
STATE OVERVIEW
Economic Condition and Outlook
Alabama's general fund and education fund are in crisis. It is
anticipated that by March 1 all of the general fund will be in
proration. This is the first time in the history of the state
that both funds have been adversely affected. The revenue
situation is so bad that the career ladder program for teachers
has been postponed until 1988.
The outlook for the economy remains troubled at best. The tax
code does not encourage industry to move into the state, and the
agricultural segment of the economy is in as much jeopardy as
last year. -
Political Situation
Alabama has a very unsettled political situation; people went to
the polls in record numbers in the general election and elected a
Republican governor, Guy Hunt, the first Republican governor
since the reconstruction era. There was also a net gain of four
Republican seats in the legislature, the composition of the
Senate now being five Republican and 30 Democrats; the House now
consists of 89 Democrats and 16 Republicans. ,
Alabama, page 2
It is anticipated that Jimmy Clark will be elected Speaker of the
House in January and that Jim Campbell will be elected Pro Tem of
the House. None of the committee chairmen will be appointed in
either the House or the Senate until the organizational session
of the legislature, which commences in January. There are no
hold over committee seats or committee chairmen.
Although Guy Hunt ran on a platform of no new taxes, he now says
that if new taxes are necessary to fund the various operations of
state government, he would certainly be in favor of whatever
taxes are necessary.
The old political alliances are over in that the Democratic
alliance consisting of trial lawyers, the teachers association,
blacks and labor were, for the most part, defeated at the polls.
There is now a coalition in the House and Senate composed of
people who are business oriented and pledged to tort reform. It
is expected tort reform will be a top priority of legislators in
the coming session, and it is expected that they will be more
pro-business than they have previously been.
Richard Shelby, a Democrat, was elected to the United States
Senate, narrowly defeating the incumbent Jeremiah Denton. Claude
Harris, a Democrat, was elected to fill Shelby's seat in the
United States House of Representatives.
Significant State Problems
There are severe financial problems in Alabama. State employees
have not had a raise for at least three years. Revenue sharing
is cut off for all practical purposes and federal money is
winding down. There is going to be an economic crisis in state
government by the time the new governor takes office.
What taxes the governor will propose are unknown because there is
no one tax that would solve what is believed to be a $200 million
deficit. Many believe that he will back a package of sin taxes,
with a possible increase in property taxes.
Severe problems.are expected from a new public health officer.
The Department's Public Health Committee has adopted a resolution
asking the legislature to impose a ten-cent cigarette tax hike
for the education of young people on the "evils" of smoking. In
addition, the committee has proposed smoking restrictions in all
public clinics or public hospitals, all nursing homes and other
areas which come under the jurisdiction of the Health Department.
If extended to its logical conclusion, this could affect every
place inspected from drug stores to restaurants and grocery
stores.
:,r,
Alabama, page 3
RESOURCES: STRENGTHS AND WEAKNESSES
Tobacco Segments
There are a small number of tobacco farmers in lower Alabama.
They are members of the Alabama Farm Bureau. We need to work
directly through other tobacco state farm bureaus to garner
support from the Alabama Farm Bureau. In the past we have
received no real assistance from this organization.
The strength of the tobacco industry in Alabama can be rated as-
moderate. The tobacco wholesaler association is small and
diverse in opinions. On a one-on-one basis we receive good
support from its members.
Business
We have strengthened our coalition ties in the business
community. Our lobbyist has joined the state chamber. TI has
joined the Alabama Retail Association, and we hope to further
develop other contacts in wholesale and retail groups in Alabama.
Labor
Labor groups in Alabama have not been pro- or anti-tobacco. They
have maintained a laissez-faire attitude. We could use some
support in that area, but it will have to come from the national
level.
Fire Groups
These groups have not been of assistance to us on fire safety
issues, as we have not needed to call on them. We have, however,
done some work with Alabama's Project Burn Prevention program.
We furnished video equipment for this program.
Firemen in southern counties have discovered a new revenue
raising mechanism: local tobacco taxes. Several wholesalers have
joined together to take the action to court. If it is not
stopped, there will be a rash of more than 30 counties looking at
cigarette taxes for volunteer fire department support.
ANTI-TOBACCO FORCES
The anti-tobacco forces have become better organized under the
auspices of the Health Council. We have been able to control the
efforts to regulate smoking statewide. However, the local
situation is a serious threat.
Due to lack of organization, there have been no frontal attacks
on the industry. In some localities there have been smoking
cessation programs. The local media is constantly battering the
tobacco industry.
Alabama, page 4
TOBACCO INDUSTRY
Brief History of Successes and Problems
Over the years we have seen a number of restrictive smoking
measures in the legislature. We have been able to defeat these
efforts.
During the Fob James administration we managed to reduce a
six-cent tax increase to four cents. The endeavor was to rewrite
the Alabama tax law, bringing it up-to-date. Formerly,-
cigarettes were taxed by the pack and the stick, plus there was
an involved system of weights and measures per cigarette to
establish a tax base. The rewrite of the law and elimination of
this weights and measures segment saved the industry many
millions of dollars in back taxes on various sized packages and
samples. The revenue department agreed not to pursue collection
of back taxes if the new law was enacted.
Over the past thirteen years we have seen several more counties
go to the legislature for authorization to tax cigarettes. Each
session we see bills for this privilege. It is very difficult to
stop this type of legislation as it is usually passed on the
consent calendar. The committees which review such matters are
made up of the legislative delegations from the counties
concerned.
During the 1985 session a home rule bill for Madison County was
introduced to tax cigarettes for a cancer research and treatment
center. We were able to defeat this; however, we foresee more of
this type of legislation.
During 1985, the Alabama-legislature passed a law permitting
Geneva County to levy a cigarette tax which contributed to the
volunteer fire departments of that county. During the 1986
session the legislature passed similar laws for Coffee and Dale
Counties. These laws specified that referenda be held for
endorsement prior to implementation of the cigarette tax. The
referenda passed in both counties.
Several wholesalers have filed suit against Geneva County. This
has caused any further action in either Dale or Coffee County to
be delayed.
Outlook
We can anticipate problems in the form of restrictions and
taxation. The industry will remain under siege from anti-tobacco
forces.
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Alabama, page 5
Next year we expect to see another bill to preempt the cities'
and counties' right to tax cigarettes. In addition, we may see
up to 30 counties seeking the right to tax cigarettes for
volunteer fire programs. All cities and counties in Alabama will
be in severe fiscal shape for 1987.
There will be several bills introduced to raise the cigarette tax
to offset state revenues. We should also expect public smoking
bills to be introduced during the 1987 session.
December, 1986
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80420215
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PREFACE
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Alaska depends largely on Washington state for supplies,
transportation and communication with the "lower forty-eight."
The forty-ninth state looks to Washington, Oregon and California
for its political ideas as well.
Alaska's share of market is just over two-tenths of one per cent.
STATE.OVERVIEW
Economic Condition and Outlook
Alaska's economy is based largely on revenues from its North
Slope oil. The state's traditional economic dependence on
mining, timber and the military, is still significant but pales
in comparison to the value of oil and newly-discovered mineral
resources. Until recently, Alaska's economy and oil revenue
receipts knew no bounds. The state was able to repeal the
personal income tax, handle higher education expenses for state
residents attending out-of-state schools and provide revenue
sharing checks every year for each resident. Funds to improve
state facilities, add new state buildings and assist local
governments were readily available. - -
Then in late 1984-early 1985, oil prices began to fall worldwide.
As a consequence, Alaska's oil revenues began to shrink and mild
panic set in for those legislators who relied too heavily on oil
revenues for their pet projects. Until oil prices increase and
state oil revenues, in turn, increase, Alaska's economy will be
in disarray, due to the inability to properly budget. The
legislature must reassess priorities, finding either new sources
of revenue or reducing state expenditures on extraneous programs.
Political Overview
The Alaska legislature will convene January 19 for an
approximately 120-day session.
In the 1986 elections, Alaska elected Democrat Steve Cowper as
the new governor.
The Alaska House of Representatives will be controlled by the
Democrats by a margin of 24-16. The Democrats picked up 3 seats.
In the Senate, the Republicans will maintain an 11-9 majority
with one seat still being contested.
Alaska, page 2
Regarding U. S. Senate and House races, incumbent Republican
Senator Frank Murkowski and incumbent Republican member of
Congress Donald Young, were reelected.
Significant State Problems
As mentioned above, Alaska's major state problems are a declining
revenue base and ever-expanding infrastructure needs. As large
as the state is, transportation from one end of the state to the
other (both surface and air) is extremely critical. Need for
improved communication systems as well as improved delivery of
state services is important. Therefore, it appears most efforts
during the 1987-88 legislative session will be aimed at providing
a solid source of funds to continue the state's growing program
needs.
RESOURCES: STRENGTHS AND WEAKNESSES
Tobacco Segments
There are few traditional members of the "tobacco family" in
Alaska. Because of its size and shipping problems there are only
two major tobacco wholesalers and one major vendor in the state.
All three however, have been extremely helpful to us with
legislative issues. Member company employees are few in number
and spread extremely thin in their sales territory
responsibilities.
Business
The prime coalition that the tobacco industry has used in past
legislative efforts has been the Cabaret, Hotel and Restaurant
Association (CHRA). This group represents most of the
hospitality industry within the state and is well aware of
problems that restrictive smoking legislation would impose upon
its members.
The state's vast geography is the largest stumbling block to the
development of cohesive coalition support. Even businesses with
common interests have no real alliance from one community to the
next.
Labor
Traditional organized labor is not a significant political force
in Alaska. However, state employees' unions are influential in
Juneau when considering the heavy concentration of state
employees in the capitol city. In past sessions, major smoking
restriction legislation has come from a state employee member of
the legislature.
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