Lorillard
870000 State of the States
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- Kunasek, C.
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- Date Loaded
- 05 Jun 1998
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Alaska, page 3
ANTI-TOBACCO FORCES
As mentioned, the major anti-tobacco effort in past sessions has
come from a state legislator who, coincidentally, is a state
employee representative. When his legislation has been
introduced, the Alaska Lung Association, in cooperation with its
Washington State affiliate, has testified in favor of restriction
legislation.
TOBACCO INDUSTRY
Brief History
The first public smoking restriction legislation passed in 1975.
In 1984 that legislation was expanded to include public
transportation facilities, state office buildings and
grocery/retail stores.
While Alaska was still a territory, a tax of 5 cents per pack was
imposed. In 1961, the tax was increased to 8 cents. The
cigarette excise tax was not increased again until the 1985
legislative session, at which time it was increased to 16 cents
per pack.
Outlook: Major Issues - State and Local
Alaska faces a.serious re-evaluation of priorities: funding of
human services and continued state economic development.
Most importantly, our industry will face an unprecedented number
of local smoking measures during 1987. Specifically, and most
immediate, is the issue of workplace smoking in the City of
Anchorage.
The 1987 legislature will consider several measures facing our
industry, including workplace smoking prohibitions and tax
increase legislation.
Undoubtedly, with the urging of Health Department recommendations
concerning tobacco related health issues, we may see statewide
legislation with regard to workplace smoking during 1987.
December 1986

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ARIZONA
PREFACE
Arizona, like several other "Sun belt" states, is in the midst of
a terrific population boom which should continue through the year
2000. In analyzing present and future political trends, it is
important to understand the political traditions these new
residents bring to Arizona.
Past immigrants tended to be older, retirement-oriented couples
who settled in places like Sun City. Such people were generally
conservative, matching prevailing political attitudes.
Starting in the late 1970's, Arizona witnessed a sharp increase
in younger immigrants moving "out West" where the sunshine was
nice and the employment opportunities were even better.
Population forecast show Arizona, which is now ranked 28th, will
become the 22nd most populous state by the year 2000. Employment
is expected to jump by 32 percent, more than any other state. No
one will be surprised if Arizona doubles its population by 2000.
the 1990 census.
This great influx of residents definitely affects state politics.
Younger residents tend to work in the manufacturing and
construction fields, are generally high school graduates with
some college and tend to be more liberal'than the past political
base. x;..
At the federal level, these population shifts will significantly
affect the make-up of Congress when seats are reapportioned after
Arizona's share of market is 1.1 percent.
STATE OVERVIEW
Economic Condition and outlook
Large population gains in Arizona mean booming economic growth
generally related to construction and'manufacturing operations.
This growth is largely confined to the southern part of the
state, Phoenix, and Maricopa County, down to Tucson and Pima
County.
Because land prices remain reasonable, a construction industry is
in place. The state's two major universities have achieved high
scholastic ratings. Many major corporations have either opened
facilities in the state or transferred their existing operations
to Ar i zona . '_ .

Arizona, page 2
Tourism is one major state industry that continues to grow,
cultivating a high percentage of "snowbird" wintertime residents
in the state.
Agriculture, farming and ranching play a declining but still
important part in the state's economy. From the beginning of
Arizona's territory status to the 1960's, the three C's dominated
the Ari.zona economy and consequently the political picture.
Cattle, copper and cotton were the state's economy at one time.
Copper has taken a nosedive with companies like Phelps Dodge
closing shop. Cattle ranching has continued to dwindle in the
state, although it seems to be holding its own in the north.
Agriculture continues to grow. Arizona is one of the country's
leading 'cotton-producing states and a new federal allocation of
water from the Colorado River should expand agriculture, while
assuring steady industrial and residential growth.
Power, water, a strong industrial base, excellent higher
educational facilities, agriculture and plenty of open spaces
completes a list of ingredient-s which should make Arizona the
leading growth state by the year 2000.
Political Situation
Republicans captured the previously Democratic governorship in
1986 with the election of ultra-conservative Erv Mecham. Mecham
unexpectedly defeated legislative strongman Burton Barr in the
Republican primary election. This upset caused wealthy moderate
Republican Schultz to enter the- campaign as a last minute
independent candidate. Mecham was elected with a 40 percent
plurality against Democrat Carolyn Warner's 36 percent and
Schultz took the rest.
In the Senate, Republicans maintained and added slightly to their
strong majority, 19 Republicans and 10 Democrats.
In the House of Representatives, Democrats made a small gain, but
the House remains comfortably Republican with a 36 to 24
majority. Major leadership changes in the Legislature took
place. In the Senate, moderate Republican Carl Kunasek replaces
retiring Senator Stan Turley as President. Senator Robert Usdane
remains as Majority Leader and Senator Hal Runyan will be
Majority Whip.
In the House of Representatives, the departure of long- time
Majority Leader Burton Barr and the shift of several leading
Republicans from House to Senate opened the way for totally new
leadership. Rep. Joe Lane was elected.Speaker; Rep. Jim Ratliff,
Majority Leader; and Rep. Jane Hull will be Majority Whip.
The mantle of power will not rest comfortably in the short term:
on these new and relatively untried legislative leaders. A
shakedown period can be expected in both houses as leaders and
members alike jockey for position.
ei

Arizona, page 3
Significant State Problems
One legislative leader describes the state's three most
significant problems as money, money and money.
At this writing the state is projecting a shortfall of $140
million in its current budget of $2.5 billion. Retiring Governor
Babbitt has ordered a 6 percent budget cut from selected
departments, but Republican legislators foresee the need for an
across-the-board cut of 8 percent to bring the budget into
balance, as required by the state Constitution. At this point
legislative leaders are determined to accomplish budget balancing
without new taxes.
Other major issues that need to be addressed
are:
o Infrastructure development.
o Health care cost containment.
o Air and water pollution.
o Additional "home rule" authority for Arizona's
relatively powerless county and city governments.
o Taxation and tax reform occasioned by Federal tax reform.
RESOURCES: STRENGTHS/WEAKNESSES
Tobacco Segments
Arizona's small but active "tobacco family" has supported
industry causes at both local and-state levels. TAN members
include T.I. member-company personnel, wholesale distributors,
vendors, and a growing number of concerned smokers who have
become active in their support of their right to smoke.
While our company personnel do a good job, most company reps in
Arizona are sales represeritatives who are somewhat limited in
their ability to take time off to attend hearings, etc. Our past
strengths have come from the distributors, wholesalers and
vendors who, through their respective associations, maintain PACs
and take an-active political role.
On the downside, the small number of company and industry
personnel limits our grass-roots response. With no farm element,
and occasional factional bickering within the tobacco family, it
is a constant communications effort to keep the group responsive.
Business
Business support, particularly in the area of smoking
restrictions, waned considerably during 1986 as the so-called
nonsmokers' rights groups began exerting direct pressure on major
businesses and business groups. This pressure has succeeded in
neutralizing some opposition to restriction ordinances at the
local and state levels.

Arizona, page 4
Many other business organizations are receptive to our positions,
and our allies list in Arizona is.a long one. Groups like the
Arizona Restaurant Association, Southern Arizona Restaurant
Association, Arizona Licensed Beverage Association, Arizona
Hotel/Motel Association, Arizona Innkeepers Association, Arizona
Retailer Association, and others have taken active roles in our
support. Also, we have had support from major corporations such
as Southland Corporation, U-Haul, Coca-Cola Bottling and others.
Taxpayers' associations, namely the Arizona Federation of
Taxpayers and The Sun City Taxpayers Association, have assisted
in the past.
Labor
Labor groups do not form a significant force in Arizona. As a
right-to-work state, organized labor is restricted in scope and
ability to organize. This status is not likely to change in this
status in the near future.
Fire Groups
Several city fire departments, including those in Flagstaff,
Phoenix and Lake Havasu City, have had positive contact with T.I.
through va-rious Public Affairs' programs we have made available
to them.
Their lobbying presence, however, is not great, and we have not
asked for direct assistance.. The smoking/fire causation issue
has not been a major topic at any legislative level.
ANTI-TOBACCO FORCES
A new generation of anti-smoking activists, Arizonan's for
Non-smokers Rights, surfaced in 1986, largely supplanting long
time activist Betty Carnes. This group has succeeded in
bulldozing strong restriction measures through many of the city
councils in the Phoenix/Maricopa County region. They are gaining
in confidence as business opposition to their initiatives
wears down. They will focus on the Arizona legislature when the
new session begins. Fortunately for us, they have tended to be
extremely arrogant and strident in their techniques.
In the Tucson area, a local anti-smoking group -- Nonsmokers
Incorporated -- has been active since 1982. For two years they
tried to pass local legislation and, failing that, chose the
initiative process. They have been successful and should continue
to be active.
The forecast is for increased activity from these groups,
especially in the Phoenix area. They continue to grow, and
workplace regulation is their number one priority in the state.

Arizona, page 5
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TOBACCO INDUSTRY
Brief History of Successes and Problems
At the state level, a combination of effective lobbying, solid
friends in the Legislature and strong allies has kept cigarette
excise tax increases to a minimum. Other regressive tax
measures, along with state smoking restrictions have been held at
bay. While this excellent record is expected to continue, the
pressure for a statewide "Clean Indoor Air Act" continues to
build.
Major losses occurred at the local level on restriction
ordinances as Phoenix, Mesa, Tempe and Scottsdale succumbed to
the pressures applied by local anti-smoking activists.
New proposals are pending in Tucson and Pima County and can be
expected to receive serious review early in 1987.
Major Issues - State and Local
Financial concerns have dominated the Legislature's agenda for
the past several years and should continue to do so in 1987.
Cigarette taxes have never figured previously in the various
debates.
However, as fiscal concerns continue to increase at the local
level, a "home rule" bill could prove costly for our industry and
will be watched carefully. As in other states, some_legislators
continue to ask for "earmarked" cigarette taxes to support health
care facilities, education programs, etc. This also must be
watched carefully.
The initiative process is working well for the anti-smokers, and
it's likely that more of these battles will be fought in Arizona.
Outlook
Arizona will be an "iffy" state for us in 1987. Substantial
pressure will be applied for statewide smoking restriction
measures. Local activists can be expected to push many, if not 00
all, of the AMA guidelines; e.g., advertising and promotion bans, 0
nonsmoker insurance rate differentials, etc. N
O
All in all, we can expect a busy and difficult year at both state N
and local levels in 1987.
December 1986
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ARKANSAS
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PREFACE
In the past, Arkansas had a rural, conservative thinking
legislature. In the last few sessions things have changed,
bringing about efforts to increase the cigarette tax. The
tobacco industry will be subjected to attempts at increased
taxation as well as smoking restrictions in 1987.
The Arkansas legislature, as well as the executive branch, will
remain consistent throughout the next two years. Governor
Clinton won reelection by a wide margin and his chief interest
will be coping with unemployment and repairing a state budget
depleted by a loss of federal revenue sharing monies.
The state's market share is approximately 1 percent.
STATE OVERVIEW
Economic Condition and Outlook
The economy remains unchanged from 1985. The outlook is poor.
Plant closings and unemployment continue to rise. Some major
plants, which were closed in 1985, are now being dismantled.
The 1986 revenue take was below expected levels. Because deficit
spending is prohibited in Arkansas, and it was necessary for the
governor to restrict spending on five separate occasions. The
loss of revenue sharing will continue to-strain government at all
levels and create a search for additional funds.
The prison system continues to be a problem. Over 400 prisoners
are housed in county jails awaiting openings in the state prison.
The legislature will be required to address this problem.
Political Situation
There was no change in the Congressional delegation as a result
of recent elections. The state legislature changed very little;
the Democrats are still in firm control. Two new senators were
elected and are not viewed as active opponents to the tobacco
industry. There are seven new members in the House. Only time
will tell whether they will have significant impact on the
legislature.
The legislature convenes for its biennial session on January 12,
1987. The session is supposed to last only 60 days, however,
current projections indicate it could last until May.

Arkansas, page 2
Significant State Problems
The significant problems Arkansas faces in 1987 will echo those
confronted in 1986. One aluminum plant closed, the textile
industry remains depressed and tourism is down. Revenues for the
state remain well below early projections.
RESOURCES: STRENGTHS AND WEAKNESSES
Tobacco Segments
Tobacco industry resources continue to be fragmented. The
retailers are not properly organized and seem to have little
interest in problems of the industry. However, tobacco
wholesalers are well-organized. They have a significant impact
at the state level and have been helpful at the local level.
They understand the importance of political participation.
Business
The Arkansas Hospitality Association, while helpful in the past,
has recently made inquiries about possible "compromise"
legislation relative to smoking restrictions. Efforts continue
to educate this group.
The Arkansas Wholesale Grocers Association has indicated an
interest in joining the tobacco wholesalers. This could create a
problem if that group places tobacco in a compromising position.
It must be remembered that the last large tobacco tax increase
was the direct result of activity by the Arkansas Wholesale
Grocers Association.
We are members of the Arkansas Municipal League, Arkansas Chamber
of Commerce and Associated Industries of Arkansas. Since
Arkansas has great interest in the tourist industry, the various
chambers of commerce are a possible source of assistance.
Labor
Labor groups have not been of assistance. The principal lobbyist
for labor is J. Bill Becker. Mr. Becker gets a lot of media
coverage, but is not considered a strong lobbyist. The last time
our industry was involved with Mr. Becker, he supported an
increase in tobacco taxes. We could use some help from the
national level for union support.
Fire Groups
Groups such as fire and police seem to have little interest in
the problems related to our industry. These groups might be of
some assistance if properly organized and oriented to our
problems.
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