Lorillard
870000 State of the States
Fields
- Type
- REPT, OTHER REPORT
- Alias
- 80420251/80420295
- Site
- G65
- Area
- SPEARS/OFFICE
- Characteristic
- OVER, OVER SIZE DOCUMENT
- Litigation
- Nyag/Produced
- Date Loaded
- 28 Apr 1999
- Named Organization
- Afscme
- American Lung Assn
- Arvida
- Assn Industries of Fl
- Atlanta Chamber of Co
- at+T
- Bakery Confectionary +
- Barnett Bank Group
- Burley Auction Warehou
- Burley Farmer Advisory
- Burley Growers Coopera
- Burley Leaf Dealers As
- Burley + Dark Leaf Exp
- Business Council Ga
- Bw, Brown & Williamson
- Carter Administration
- Council for Burley Tob
- Delta Airlines
- De House
- De Senate
- Doctors Ought to Care
- Eli Witt Distributing
- Epcot Center
- Fl Candy + Tobacco Ass
- Fl Comprehensive Plan
- Fl County Commissioner
- Fl Hotel Motel Assn
- Fl House
- Fl Independent Beverag
- Fl Leage of Cities
- Fl Legislature
- Fl Outdoor Advertisers
- Fl Restaurant Assn
- Fl Retail Assn
- Fl Retail Federation
- Fl Senate
- Fl Tobacco + Candy As
- Ga Against Smokers Po
- Ga Agricultural Commo
- Ga Farm Bureau Federat
- Ga General Assembly
- Ga Hospitality + Trav
- Ga House
- Ga House Health + Eco
- Ga Legislative Black
- Ga Lung Assn
- Ga Retail Assn
- Ga Senate
- Ga Wholesale Grocers
- General Motors
- Grange
- Havatampa
- Hi Food Industry Counc
- Hi House
- Hi Lung Assn
- Hi Restaurant Assn
- Hi Senate
- Ia Congress
- Ia House
- Ia Senate
- Id Assn Commerce + Ind
- Id Assn Tobacco + Cand
- Id House
- Id Innkeepers Assn
- Id Lung Assn
- Id Restaurant Assn
- Id Senate
- Il Cancer Society
- Il Chamber of Commerce
- Il House
- Il Medical Society
- Il Senate
- Indianapolis Chamber O
- in Assembly
- in Chamber of Commerc
- in House
- in Senate
- Itcda
- Jc Penney
- Jno Swisher & Sons
- Ks Assn of Commerce +
- Ks Chamber of Commerc
- Ks for Nonsmokers Rig
- Ks Retail Council
- Ks Tobacco Candy Dist
- Ky Associated Industri
- Ky Bankers Assn
- Ky Candy + Tobacco Ass
- Ky Chamber of Commerce
- Ky Dept of Agriculture
- Ky Farm Bureau
- Ky House
- Ky Restaurant Assn
- Ky Retail Wholesale Gr
- Ky Seedmans Assn
- Ky Seed Improvement As
- Ky Senate
- Licensed Beverage Deal
- Lockheed
- Martin Marietta
- Mayo Clinic
- Medical College of Ga
- Natl Assn Independent
- Natl Farmers Org
- Natl Fed of Independe
- Olathe City Commissio
- Overland Park City Co
- Pinkerton Tobacco
- PM, Philip Morris
- Retail Grocers Assn Fl
- RJR, R.J.Reynolds
- Rolm
- Sears Roebuck
- Sons of Jacksonville
- Southern Tobacco + Ca
- Storage Tech
- Tektronics
- Toyota
- Tyco Labs
- United Tech
- Univ of Id
- Walt Disney World
- Wichita Gasp
- American Lung Assn
- Named Person
- Baker, R.
- Barnes
- Bartlett, W.
- Bentley
- Blackmun, H.
- Boosalis, H.
- Brennan, J.
- Bryan, W.
- Bryan, W.J.
- Bulger, W.
- Burger, W.
- Byron
- Canning, C.
- Cardin, B.
- Carlson, R.
- Carruthers, G.
- Cashwell, R.
- Chu, R.
- Coyne, W.F.
- Cuomo
- Cyrus, R.
- Decamp, J.
- Dini, J.
- Doyson
- Dukakis, M.
- Erickson, J.
- Esby
- Franklin
- Freeman, O.
- Fulginiti, W.
- Gallen
- Harshe, M.
- Hayes, J.
- Hecht, C.
- Hedden, J.
- Herman, M.
- Holloway, C.
- Holt, M.
- Hoyer
- Humphrey, H.
- Jetson, L.
- Johnson
- Johnson, J.
- Kean
- Kennedy, J.
- Kennedy, J.F.
- Kennedy, R.
- Kerry
- Keverian, G.
- Koop, C.E.
- Long, H.
- Ludeman, C.
- Lundine, S.
- Manning, P.
- Manning, R.
- Marsh, S.
- Mathias
- Mccarthy, E.
- Mckernan, J.
- Mcmillan, T.
- Mcpherson, J.
- Mfume, K.
- Mikulski, B.
- Miller, R.
- Mitchell, P.
- Mondale, W.
- Moore, H.
- Morella, C.
- Nelson, M.
- Norris, G.
- Norton, F.
- Olsher, L.R.
- Oneill, T.
- Orr, K.
- Pappas, J.
- Perpich, R.
- Petit, M.
- Raggio, W.
- Robbie, J.
- Robertson, G.
- Rose
- Schaefer, D.
- Schavitz, R.
- Schwinden
- Stassen, H.
- Thomas, H.
- Thompson
- Tierney, J.
- Vickers, T.
- Walker, B., J.R.
- Woods, H.
- Worthington, P.
- Barnes
- Master ID
- 80420206/0485
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DELAWARE
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PREFACE
Delaware has a population of just under 600,000. It is a
pro-business, conservative state with a high concentration of
white-collar jobs due to the large number of corporations with
headquarters located in the state.
The state's market share is three-tenths of one percent.
STATE OVERVIEW
Economic Condition and Outlook
Delaware is in good fiscal condition with a projected yearly
budget surplus of $40 million and an additional "rainy-day" fund
of $40 million. The outlook is for continued economic growth in
the state during 1987.
Delaware was one of twelve states to lower personal income taxes
in 1985 through-an increase in the personal exemption. In
addition, inheritance taxes were reduced.
Delaware still has one of the five highest personal income taxes
in the country. An unsuccessful effort was made to reduce the
income tax rate, but the plan may come up again in 1987 session.
The state has a highly elastic tax system. States with high
elasticity are able to cut tax rates and still maintain a steady
relationship between revenue and personal income.
Political Situation
Delaware has a Republican governor and a Republican majority
(22-19) in the House. The State Senate is controlled by the
Democrats (12-9). The legislature can be considered
pro-business.
Significant State Problems
The most significant state problems on the horizon are:
1. - Continuation of a balanced budget with increased
appropriation requests.
2. More funds requested for education.
3. More highway funds requested.
Delaware, page 2
RESOURCES: STRENGTHS AND-WEARNESSES
Tobacco Segments
The tobacco segment in Delaware is very small due to the size of
the state. Many retail accounts are serviced by wholesalers and
vendors outside of the state (Maryland, Pennsylvania). There is
no wholesale or vending association. Additionally, many member
company sales personnel live and have offices in adjoining
states.
Business
Delaware has a strong business community due to the large number
of corporate headquarters and the even larger number of companies
incorporated in the state. State laws including tax rates favor
the corporate presence. The Chamber of Commerce is the largest
business organization in the state and can be considered an ally
in smoking restriction matters.
Labor
The organized labor force is centered in the Wilmington area.
Unlike most northeastern states, organized labor is not an
influential political force.
Fire Groups
Fire groups are active in the state and helpful to The Tobacco
Institute, generally speaking. A former president of one of the
largest_national fire groups resides in Delaware.
Institute Resources
Industry resources in Delaware center on the business community
and the variou.s business organizations in the state.
ANTI-TOBACCO FORCES
The anti-tobacco forces in the state are 'few and very low key in
their approach to anti-tobacco programs. The lung, cancer and
heart associations are the largest and strongest anti-smoking C
groups, but their influence is limited. ~
TOBACCO INDUSTRY
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Brief History of Successes and Problems
Most legislative issues in recent years have been confined to the
state level. Cigarette taxes were the chief threat during the
last several sessions. A federal contingency tax bill was
J.ntroduced and passed the House in 1985, but died with
z)ijournment in a Senate committee.
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Delaware, page 3
A smoking restriction bill was narrowly defeated in the House in
1986. An OTP tax was implemented by legislation passed in 1986,
but its effective date was suspended by industry protests until
March 1987.
Major Issues - State and Local
The public smoking issue has not been considered at the local
level, nor has the state legislature paid much attention to it
until this year.
Outlook
There is a probability of restrictive smoking legisl-ation
appearing again during the 1987 session. This would probably
take the form of restaurant, public places, or government
building restrictions. No increase in the cigarette tax is
expected to be considered.
We anticipate legislation in the area of product liability and
tort reform.
December 1986
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80420254
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PREFACE
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FLORIDA
In 1985, the State of Florida was ranked as one of the three
fastest growing states in the Union, following only California
and Texas. The trend remains the same as it gains not only the
largest share of retirees in the country, but also an ever-
increasing number of young professionals who see Florida as one
of the better places to live. This is due to its stable economy,
excellent weather conditions and new-found employment
opportunities.
Florida has an economy based on the tripod of tourism, industry
and agriculture, with all three facets measured in the billions
of dollars to the state's economy. The tremendous number of
tourists -- expected to be more than 40 million in 1987 -- bodes
well for service-related jobs.
The biggest reasons for the optimistic growth by the year 2000
are the population boom and the state's new and more stable
economy, one based on high-tech manufacturing as well as
international finance and banking.
A 1985 census showed a population of 10.9 million. The
prediction is that Florida will have a population in the
neighborhood of 15 to 16 million in the year 2000. Currently,
figures indicate that 13.8 percent of the population is black and
8.8 percent is Hispanic. The state's market share is
approximately 5 percent.
STATE OVERVIEW
Economic Condition and Outlook
Many years ago Florida agriculture was the predominant factor in
the economy. Many good returns were given to the state's
farmers, ranchers and citrus growers due to the usually warm
weather, good rainfall, plentiful farm labor and inexpensive
transportation from farm to market. Tourism was considered
second and industry was a distant and poor third. Over the years
this picture has changed, with tourism taking over the top spot.
However, in recent years industry has forged its way to the top,
followed by tourism and then agriculture.
In 1984, tourism brought in some 36 million visitors from around
the world, resulting in $850 million in tax revenues, more than
632,000 tourism-related jobs, and an annual payroll of more than
$4.3 billion.
Florida, page 2
Industry in Florida ranges from "silicon valley" factories, to
huge defense industries, plus manufacturing of food, clothing and
housing. These businesses include plants with thousands of
employees down to hundreds of "mom and pop" operations. Florida
has an unemployment rate of 6.3 percent.
Florida agriculture produces all major fruits and vegetables.
Most of these products are grown during the winter months when
much of the rest of the nation is unable to grow such
commodities. The Florida citrus industry suffered disastrous
freezes in 1983 and 1985, killing thousands of acres of trees. In
1986, agriculture has returned to the profit side after these
disastrous freezes.
Florida's various regions will grow economically in very
different ways. Miami has staked its future on international
trade and banking, as well as tourists from South and Central
America. Fort Lauderdale and Palm Beach, however, are turning to
high-tech manufacturing with giants such as IBM, Rolm, Storage
Tech, Tyco Labs, Tektronics, and United Tech, etc. All these
companies provide well-paid corporate jobs.
Tampa is a booming center of commerce, construction and culture
with a growing number of light industries settling there.
Orlando isn't just Mickey Mouse and Walt Disney World anymore.
In 1982, Disney opened its billion dollar Epcot.Center, and
recently acquired Arvida, a large housing development company.
This year they announced construction of a massive new filmmaking
center. Just a few miles from Disney World is the 11,000 worker
defense plant of Martin Marietta. AT&T has also announced
construction of a major plant. Jacksonville is rapidly becoming
the insurance capital of the world, and it recently brought in
the prestigious Mayo Clinic's first spin-off operation.
One of the state's profitable "industries" is the hosting of
corporate conventions. In 1983, there were 11,600 annual
association conventions around the country. Florida received the
majority of these groups.
In the past few years the state has also gone after the movie
business. In 1984, 35 feature films were shot in the state, and
in the first six months of 1985 thousands of commercials,
training films and feature films were shot here.
The state's political and industrial leaders are confident that
it will escape its historical tendency toward boom and bust, and
now will simply get on with the boom. The future looks good.
Tourism continues to gain following the fears of terrorism of
overseas trips and vacations. All phases of industry have
increased with larger economic benefits accruing to all sections
of the state.
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Florida, page 3
Political Situation
Historically, the Florida legislature has been conservative.
While there are Democrats and Republicans in both houses, the
dominant Democrats have been reluctant to go along with the very
liberal philosophy of the national Democratic Party. It has
often been said the Florida Democrats are more Republican than
some of the Republicans. There has been a major shift in party
loyalty over the past seven years, with 35 percent of Florida
residents identifying themselves as Republicans (versus 26
percent in 1976), 35 percent identifying themselves as Democrats
and 10 percent as Independents. Blacks, however, have maintained
their Democratic ties by a nine-to-one margin.
The Florida legislature is composed of two houses, the House of
Representatives and the Senate. The former has 120 members and
the latter 40 members.
The 1986 elections in Florida showed a definite power shift. For
the Republicans on the state level, it means that the GOP is
getting closer to parity in this rapidly-changing state.
Republican Bob Martinez broke a 20-year drought for 'the GOP when
he became only the second Republican Governor since 1900. At the
same time the Republicans were able to capture or hold onto 15
seats in the Senate and 45 seats in the House.
The GOP Senators have closed ranks with a number of conservative
Democrats to form a coalition that has wrested power from a
liberal group of Democrats. In the House, GOP members can
effectively uphold any veto that the governor might wish to
attach to any legislative proposal.
,
Political scientists point out that many of the thousands of new
residents are registering as Republicans. This will have a
significant impact on Florida's political future. Governor-elect
Martinez had a 300,000 vote margin over the Democratic nominee in
a state where Democrats have a large majority in registered
voters. ~
In the various Senate races, the GOP took five more seats than it
had two years ago and gave a scare to several other liberal
Democrats.
The only saving grace for Democrats was the election of Governor
Bob Graham over U.S. Senator Paula Hawkins in one of the most
hotly contested and costliest campaigns in the state.
It would appear that with a GOP Governor and a coalition of
Republicans and conservative Democrats in the State Senate, the
newly-found strength of the Republicans would give them control
of many political and legislative proposals. But Democratic
State Representative Jon Mills, House Speaker, says the Florida
House becomes the key to how.far Governor Martinez can carry his
conservative agenda.
Florida, page 4
Significant State Problems
Major problems facing the state are those relating to management
of its tremendous growth. Hundreds of plans are underway by many
different agencies and groups. Many call for different solutions
to the problems of education, transportation, prisons, waterworks
and future economic development. Some solutions suggest a strong
program of privatization. Other solutions suggest consolidation
of services, streamlining the permitting processes, local option
taxes, etc.
A major problem facing landowners in Florida is the issue of
amending the state's Marketable Record Title Act. The question
is whether the 1963 Legislature intended the title clearing act
to deprive the state of title to underwater lands, previously
assumed to be in state ownership. The 1963 law clears titles to
lands that are free of conflicting claims for 30 years. A
legislative commission reviewing the law has found itself
deadlocked over the vesting of such land rights. Other
legislative issues include the repeal of joint and several
liability doctrine, child abuse, higher education, the disposal
of hazardous wastes, protecting the environrnent, reducing crime,
protecting life on the highways, and providing affordable
housing.
Another major issue which will come up during the 1987
legislative session will be the repeal of sales tax exemptions.
The legislature passed a bill in the last session that
automatically repeals most exemptions to the five-percent sales
tax, with the exception of food and medicine, unless they are
re-enacted before July 1, 1987. Such repeal is expected to bring
in more than $1 billion. This additional money cannot be spent,
however, without the approval of the governor and both
legislative bodies.
Despite what is done with the sales tax exemptions, Charles
Zwick, Chairman of the State Comprehensive Planning Committee,
says that Florida's basic tax structure must be changed because
the government cannot keep pace with the ever-increasing need of
services to new residents. He says the costs of such increasing
growth will outstrip projected revenue collections by $72 billion
over the next ten years. He sees the need for additional tax
increases, including the possibility of a one- to two-cent
increase in the sales tax, a personal income tax or a business
receipts tax.
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Florida, page 5
RESOURCES: STRENGTHS AND WEAKNESSES
Tobacco Segments
There are approximately 900 tobacco farmers growing tobacco on
approximately 7,500 acres. While there are no cigarette
factories in Florida, there are some 41 cigar manufacturers,
including Jno. Swisher and Sons of Jacksonville, and the
Hav-A-Tampa Company in Tampa. There are numerous small cigar
manufacturers located in Miami, Tampa and Key West, with Florida
cigar manufacturers producing about one-sixth of the nation's
cigars each year.
Florida is fifth among states in tobacco product manufacturing
employment and fourth in tobacco retailing and vending jobs. Just
under three percent of all private sector jobs are generated
directly or indirectly by tobacco, for a total of 81,520 jobs,
and total wages of $1.15 billion.
The Florida Tobacco and Candy Association has approximately 40
members throughout the state. Within recent years, it has come
of age as a lobbying support group and the future looks bright
for the association. We hope they will continue to be effective
partners. With the election this year of Fred Hoyland of Eli
Witt Distributing Company as president, this hope should become a
reality.
Contact is being maintained with the TAN activists for watchdog
purposes and for the necessary phone calls, personal contacts and
letter-writing campaigns when needed. It is anticipated that
this same level of cooperation will be present in the future.
Business
During the 1985 Legislative Session, Florida had perhaps the best
ever grouping of allies and business coalitions lobbying against
the Florida Clean Indoor Air Act. Because of such efforts, the
tobacco industry and friends were able to weaken the proposed
smoking restriction considerably. Unfortunately, a few
unpalatable provisions were passed in the legislature. The
allies included:
The Florida Chamber of Commerce
Associated Industries of Florida
Florida Hotel and Motel Association
Florida Restaurant Association
The Florida Retail Federation
Retail Grocers Association of Florida
National Association of Independent Businesses
The Florida Independent Beverage Dealers Association
The Florida Outdoor Advertisers
The Eli Witt Distributing Companies
The Barnett Bank Group
Various labor unions under the AFL/CIO
Florida, page 6
Throughout the session, this group of allies met on almost a
weekly schedule. They were always on call, ready to plan
strategy and to meet with their friendly legislators to amend the
bill. Without their assistance, it would have been difficult to
stop a more restrictive bill.
During the 1986 session, most of the same coalition members
joined us in our fight against revisiting the Clean Indoor Air
Act. In addition, many of them aided us in our unsuccessful
efforts to defeat the cigarette tax increase.
Labor
Betty Palmer of the Bakery, Confectionery and Tobacco Union in
Orlando, was the first to make contact with The Tobacco Institute
in Tallahassee on the proposed Florida Clean Indoor Air Act in
1985. Through her efforts, contact was made with Don Resha and
Mike Walsh of AFL/CIO, and through their lobbyist, a solid
working relationship was established that will serve us in the
future.
Fire Groups
Some contact has been made, but little help has been derived from
such contacts as far as legislative lobbying is concerned. It
appears that their sole interest is fire prevention, rather than
legislative lobbying.
Institute Resources
This year there has been a restructuring of the lobbyist program
in the state. It is anticipated this will result in better
lobbying among the leadership of both houses. It is also hoped
that cooperation among our various allies and coalitions will
continue during the next session.
ANTI-TOBACCO FORCES
In prior years, it was not too difficult to defeat legislative
attempts to restrict smoking. The militant anti-smoking groups
were not organized. In 1985, these groups formed a coalition and
were active on the local scene long before the legislators
arrived in Tallahassee, even to the extent of getting
legislators' prior commitments to endorse anti-smoking
legislation. For the first time, the anti-smoking group hired a
full-time lobbyist who was very active throughout the 1985
session.
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Florida, page 7
TOBACCO INDUSTRY
Brief History of Successes and Problems
For a number of years, Florida had two TI lobbyists, a public
relations consultant and a TI regional director. The wholesale
group, The Florida Tobacco and Candy Association, was not very
effective. It was little more than a group that put on a party
for the trade, funded by The Tobacco Institute and the tobacco
manufacturers. Today, members are becoming more politically
active because of Eli Witt's leadership.
Major Issues -- State and Local
Comments by various health group officials throughout the state
indicate there may be some attempts to amend the Florida Clean
Indoor Air Act by increasing its enforcement provisions or by
amending out the local preemption section of the law. We have
some assurance from our friends in the Florida League of Cities
and the Florida County Commissioners Association that they are
not interested in having this "hot potato" tossed back to them.
Outlook
The Florida Legislature increased the Florida cigarette excise
tax by three cents in 1986. We anticipate there will be attempts
to increase the tax during 1986. There may be some bills
introduced to earmark a cigarette tax increase for some health
related purpose.
In addition, legislation may be introduced to ban tobacco product
sampling as well as to restrict advertising of such products. We
are optimistic about our lobbyist's ability to handle such
legislation.
December, 1986
80420262
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GEORGIA
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Georgia has a population of just under 6 million. Georgia is
really two states - Atlanta and the rest. Over 25 percent of the
state's population lives in the Atlanta metropolitan area. This
area consists of 5 counties out of a total of 159.
PREFACE
Naturally, the legislature reflects this population
concentration, making it increasingly difficult to control
anti-tobacco legislation. _
The state's market share is 2.8 percent.
STATE OVERVIEW
Economic Condition and Outlook
In 1980, Georgia ranked as the fifth fastest-growing state in the
nation, exceeded only by California, Texas, Florida, and Arizona.
By 1983, the state population reached 5.7 million people, the
twelfth largest state in the U.S. The minority population
represents 27 percent of the state's total. Approximately 78
percent of Georgia's 1980 population was under the age of 50.
Georgia's economy is heavily weighted toward manufacturing and
service industry. Manufacturing output contributes almost
one-fourth of the total gross state product-and is the largest
single sector in the Georgia economy. Collectively,
service-producing industries provide 71 percent of the state's
total gross product. In 1950, farm output represented 7 percent
of the state's gross product; by 1981, farming's share of gross
state product had fallen to 2 percent.
Manufacturing represents the second largest segment of Georgia's
2.2 million workers. Some 26 percent of manufacturing employees
work in t.echnological industries such as transportation
equipment, chemicals, machinery, metalworking, and instruments.
Textiles, the largest single manufacturing industry group,
employs 20 percent of all manufacturing workers; apparel follows
with 15 percent. Unionization in the state amounts to only 14
percent of all non-agricultural workers, compared to the national
average of 24 percent.
The State of Georgia has one of the most favorable small business
climates in the nation. Georgia received its highest marks for
its overall business activity, ranking third in the nation in
employment gain and fifth in personal income gain. The state
also beat the national average with its low tax rate, population
increase and overall state government assistance to small
business.
Georgia, page 2
Georgia's largest corporate employer is Lockheed Corporation
which employs almost 16,000 Georgians and has an annual payroll
of $489 million. Rounding out the top five out-of-state
companies in terms of number of employees are AT&T (14,900);
Sears Roebuck (12,600); General Motors (10,760); and J. C. Penney
(10
01
400).
Many international companies have been attracted to Georgia due
in part to the excellent business climate and to an ongoing state
campaign to attract business. The number of non-U.S. firms has
grown five-fold since 1975.
Political Situation
Governor Joe Frank Harris (D) will begin the first year of his
second and last four-year term in January. He is a fiscal
conservative and a successful businessman. He ran on a promise
of not raising taxes and has generally held to this. However, he
is now likely to support a 5 cent per gallon gas tax increase to
fund rural highways.
Historically the Georgia General Assembly has been fiscally
conservative and, in general, pro-business. The legislature is
comprised largely of entrepreneurs engaged in small private
businesses. It should, therefore, be recognized that their
pro-business stance is more closely aligned with small business
rather than big industry. Even so, both the legislative and the
executive branches of state government have been extremely
committed to growth-and economic development, which has been
demonstrated in their moderate application of regulations on the
private sector. .
The Georgia General Assembly is overwhelmingly Democratic. The
1987 General Assembly will have a total of 21 new members in'the
House and six new members in the Senate. The 1987 House will
margin will be 152 Democrats to 28 Republicans; the Senate
breakdown will be 47 Democrats to 9 Republicans.
State Representative Calvin Smyre (D-Columbus), a friend of
tobacco, will serve as the governor's floor leader in the 1987
session. He is Black.
Significant State Problems
Georgia's local governments are beginning to take the possible
loss of federal revenue sharing seriously. Many have integrated
the funds into their operating budgets rather than using them for
one-time expenditures. Raising local property taxes is the
obvious way to maintain spending, but one municipal association
official has estimated that a sharp average increase of roughly
30 percent would be needed.
Georgia has not decided how to link up with federal tax reform.
The fiscal year 1988 budget is expected to be tight, but
balanced. The gas tax is the only tax increase being considered..
Georgia, page 3
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The budget for 1987 will be in the $5.3 billion range. An $85-90
million surplus is projected. Some taxes could be considered.
The revenue shortfall reserves are full. The big expenditure
this session is $400 million new dollars for education, allowing
an average teacher pay of $23,000 a year. This will be an area
to watch in future years.
RESOURCES: STRENGTHS AND WEAKNESSES
Tobacco segments
Georgia is the fifth leading tobacco,producing state in the
country. The growing areas are in the southeast portion of the
state, and legislators from this area are strong supporters of
the industry.
The Georgia Farm Bureau Federation has been a strong ally in
opposing anti-tobacco legislation in the General Assembly.
The Georgia Agricultural Commodity Commission for Tobacco has
also been helpful in generating grass roots involvement in
anti-tobacco legislation.
Member company sales representatives have played an important
role in opposing state legislation to restrict smoking. Their
impact has been felt in the large metropolitan areas of Atlanta,
Columbus and Savannah.
Other resources for grass roots support are the Southern Tobacco
and Candy Association and the Georgia Wholesale Grocers
Association. Assistance from these groups has been good.
Business -
A strong coalition of business groups has been effective in
keeping smoking restriction legislation bottled up in the House
Health and Ecology Committee for the past 10 years.
The coalition, put together with the assistance of the
Institute's lobbyist, consists of the Business Council of
Georgia, the National Federation of Independent Business, the
Georgia Retail Association, the Atlanta Chamber of Commerce,
Delta Airlines and the Georgia Hospitality and Travel
Association. -
The Georgia Legislative Black Caucus has also been helpful.
Labor
Labor has not played a role in our efforts to oppose anti-tobacco
legislation.
Georgia, page 4
Fire Groups
The Institute has had no involvement with such groups in the
state.
ANTI-TOBACCO FORCES
Georgians Against Smokers' Pollution has a very active chapter in
the Atlanta area and is backed by the Georgia Lung Association.
Every session they appear at the General Assembly to lobby for
public restriction legislation. Since 1984, they have not been
successful in finding legislators willing to sponsor their bills.
A new foe is DOC ("Doctors Ought to Care"), led in part by'Dr.
Jesse Steinfeld, former Surgeon General, now with the Medical
College of Georgia in Augusta.
TOBACCO INDUSTRY
Brief History of Successes and Problems
In 1975, the General Assembly passed a law which bans smoking
where no-smoking signs are posted. This law is voluntary and has
been a useful argument for us in opposing further legislative
action in this area.
In 1982, the City of Atlanta defeated an effort to restrict
smoking in public places, but did restrict it in City Hall. The
sponsor is still a member of the Council and may try it again.
In July 1986, the Atlanta City Council banned cigarette pack
sampling on public property.
Major issues - State and Local
The smoking restriction issue at the state level is our main
concern. GASP and DOC publicity resulted in legislation being
introduced in 1986.
Banning the sale of smokeless tobacco to minors is also possible.
Outlook We expect smoking restriction action in 1987, probably centered
around restaurants or hospitals. We must also be vigilant to a
tax-hike effort that could spin off from the gasoline tax debate.
December 1986
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BAWAII
PREFACE
In addition to its geographic location, the State of Hawaii is
unicjue both in its politics and in its economy. With a
population of slightly over 1 million people, the islands are
subject to tourism surges that increases the number of people
within the state significantly at any given time. .
Hawaii's share of market is just under three-tenths of one
percent.
STATE OVERVIEW
Economic Condition and Outlook
Hawaii's economy is dependent upon three major industries:
tourism, shipping and agriculture. Its pineapple and sugar cane
production contribute greatly'to the state's economic health.
The tourist dollar is also vital. As a crossroads for Pacific
trade, Hawaii will continue to be a significant factor in
shipping and commerce in the Pacific; therefore, its revenues
from shipping should stay relatively stable.
Political Outlook
Following the 1986 elections,'the new governor is Democrat John
D. Waihee III, the former Lt. Governor.
The Hawaii House of Representatives remains the same as in the
previous biennium: 40 Democrats, 11 Republicans.
The Hawaii Senate shows a one-vote increase for the Republicans
over 1986: 20 Democrats and 5 Republicans.
With regard to the U. S. Senate and House seats, Democratic
Senator Dan Inouye, Republican Representative Patricia Saiki and
Democratic Representative Daniel Akaka have maintained their
Congressional seats.
Significant State Problems
Hawaii's revenue picture is relatively stable. However, there is
considerable pressure upon the legislature to increase state
employees' salaries and benefits and to improve upon some state
services that have not had funding increases in several years.
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Hawaii, page 2
RESOURCES: STRENGTHS AND WEAKNESSES
Tobacco Segments
The state of Hawaii has only one major tobacco wholesaler. This
business is relatively new, in that it is the successor to the
wholesaler that filed Chapter 11 in 1984. This particular
tobacco wholesaler is also the only major vendor in the state.
Member company employees are relatively few, with only the two
major companies being specifically represented.
Business
We have been extremely fortunate in having the coalition support
of the Hawaii Food Industry Council as well as the Hawaii
Restaurant Association in recent legislative efforts. Both groups
are extremely anxious about the imposition of public smoking
restrictions and have been quite helpful to our legislative
counsel's efforts.
Labor
.Organized labor elements, specifically the State Employee's
Unions, are very important. Thus far we have had limited success
in developing coalition support from labor interests.
ANTI-TOBACCO FORCES
The major anti-tobacco effort in the islands, at this point, is
generated from the Hawaii Lung Association. However, the news
media uses an inordinate number of print stories from the
Mainland. Therefore, island residents are exposed to all of the
anti-tobacco press generated in California. This has a tendency
to make anti-tobacco efforts seem as if they are part of a
popular movement.
TOBACCO INDUSTRY
Brief History
Until 1985 only three locations in the Hawaiian Islands had
tobacco restriction legislation on the books. Early in 1985, the
City and County of Honolulu passed a restrictive tobacco
ordinance. This ordinance covers most public places but excludes
restaurants and the hospitality industry.
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Cigarette excise taxes in the Hawaiian Islands are unique. This
is the only state in the Union that taxes cigarettes with an ad
valorem tax. This tax, presently imposed at 40 percent of
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wholesale price, makes Hawaii's among the highest tax rates in
the nation.
Hawaii, page 3
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Outlook: Major Issues - State and Local
As noted above, Hawaii's fiscal picture is relatively stable.
However, with increasing pressures to improve state human
services programs, increase state employees' salaries, etc., it
appears there will be a continued effort to increase the rate of
the present ad valorem tax.
In addition, contrary to past experience, it appears there may be
an increased effort to duplicate at the state legislative level
what the City of Honolulu did in terms of tobacco restrictions.
December 1986
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PREFACE
IDAHO
Idaho, with slightly less than 1 million people, controls less
than four-tenths of one per cent of this nation's tobacco market.
STATE OVERVIEW
Economic Condition and Outlook
Idaho's economy remains dependent upon its ranching, farming,
timber and mining industries. Although Idaho is beginning to see
electronic assembly operations, new economic growth is not enough
to offset the downturn in the timber and mining industries in
recent years. Its export of agricultural products is increasing
and is assisting the revenue picture.
Historically, the legislature has been prudent in its management
of state revenues. However, shortfalls in mining and timber are
finally catching up with the state's revenue needs. One forecast
shows the state considerably in the red.
Political Overview
In the 1986 race for Governor former Carter administration
interior secretary, Democrat Cecil Andrus, was elected over
Republican Dave Leroy by 4,300 votes.
Even after losing two seats, the Republicans will maintain
control of the Idaho State Senate with a margin of 26-16.
In the Idaho House, the Republicans, who have maintained control
since 1961, will enjoy a 64-20 vote majority.
U. S. Senator Symms and the state's two Congressmen retained
their seats.
Significant State Problems
The most significant state problem at this point is uncertainty
in the state's fiscal picture. Revenue forecasts since'1985 have
shown budget shortfalls and revenue deficits. This is partly due
to the increasing costs of committed state resources, and a
population that is growing slowly.
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The state does have balanced revenue sources (income tax, sales
tax, property tax), so solutions to the revenue shortfalls will
either amount to reductions in state spending or increases in
state taxes. Considerable attention is being given to the
possibility of a cigarette excise tax increase. Idaho's tax is
now 9.1 cents per pack, and surrounding states are considerably
higher. This inordinately low tax rate, makes Idaho a natural
for an effort to "equalize" cigarette excise taxes between Idaho
and surrounding states.
RESOURCES: STRENGTHS AND WEAKNESSES
Tobacco Segments
Idaho has only two major tobacco wholesalers, both located in the
southern-part of the state, in Pocatello and in Boise. Although a
relatively small organization, the Idaho Association of Tobacco
and Candy Distributors has been quite helpful to us in fighting
tobacco restriction legislation. The distributor from Pocatello
is particularly well-connected with legislators from his part of
the state. Member company personnel are very few in number.
Several of our companies have Idaho as part of sales territories
which are headquartered beyond Idaho's borders, specifically in
Salt Lake City and Seattle.
Business
Idaho's major business organization, the Idaho Association of
Commerce and Industry (IACI), has been reluctant to become
involved in tobacco issues. However, we have recently begun
discussions with IACI on a cooperative program (similar to
Washington's) to encourage voluntary workplace policies. This may
well be the avenue through which we'll get more support from this
association.
On the other hand, we have had extremely good support from the
Idaho Restaurant Association, the Idaho Innkeepers Association
and the Licensed Beverage Dealers Association. This is due to the
fact that members of these associations believe government should
not interfere in business and because our legislative counsel has
represented them in the past.
Labor
.Organized labor is not a significant factor in Idaho. As a,
matter of fact, during the 1985 legislative session Idaho became
a "right-to-work" state. The lobbyist for the state AFL-CIO has
been quite cooperative with us, particularly in workplace
restrictio; efforts, however, he does not carry a significant
amount of political clout.
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ANTI-TOBACCO FORCES
The primary anti-tobacco organization in Idaho is the Idaho Lung
Association. Although the lung association has sponsored tobacco
restriction measures in the past, it was not until this last
session that they were able to create a coalition significant
enough to pass a modified Clean Indoor Act.
TOBACCO INDUSTRY
Brief History
Several efforts have been made to pass broad smoking restriction
legislation since 1975 when smoking was banned in public
meetings. Until the 1985 session, however, these efforts were
not successful. Continued growth of anti-tobacco religious
forces, and an attitude that this was an issue whose time had
come, caused the Idaho Clean Indoor Air Act to pass during the
1985 legislative session.
There have been significant efforts in recent sessions to
increase cigarette excise taxes. However, most of the previous
bills would have earmarked those tobacco taxes for specific
projects. Idaho is not a state that likes earmarking funds and,
there has not been a tobacco tax increase since 1972.
Outlook: Major Issues - State and Local
It does not appear at this time, that we will see significant
restriction legislation in the 1987 legislative session,
partially because of the recent passage of smoking regulation
legislation. Although the Idaho Lung Association has announced
that it will introduce a workplace restriction bill, it is felt
that most legislators would prefer to take a "wait and see"
approach to further smoking legislation.
There will, however, be a significant effort to increase Idaho's
current 9.1 cent per pack cigarette tax. The difference in the
1987 effort, versus previous years, is that this year the
revenues will most probably be proposed for the general fund. As
the rates in the two states to the west of Idaho are more than
eight cents higher, it is an increasingly attractive idea to
raise the tax to the vicinity of sixteen cents.
There was a noteworthy effort in Moscow, Idaho, the location of
the University of Idaho, to impose local public smoking
restrictions in early 1985. After passage of state legislation,
this effort was dropped and it appears there will be little local
activity in 1987.
December 1986
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ILLINOIS
Three major political and socioeconomic divisions exist in
Illinois: Cook County, the "collar counties" surrounding Chi-
cago and the "downstate" area. Together they comprise a
population of 11 million people and 5 percent of our industry's
market share.
STATE OVERVIEW
Economic Condition and Outlook
The Illinois unemployment rate exceeds the national average,
because of difficulties in the heavy labor groups and in the
agricultural community. No immediate relief is seen for either
segment. Like many states, there is a concerted effort to
attract heavy industry and increase construction projects to
improve overall employment.
Political Situation
The State Senate (31D-28R) and the House of Representatives
(67D-51R) are both Democratically controlled. No major changes
are anticipated in leadership of either house. At the federal
level, 13 Democrats and 9 Republicans hold U.S. Representative
seats. Both U.S. Senators are Democrats.
Cook County and Chicago politics are controlled by Democrats;
however, factions within the party will cause a great deal of
competition during the 1987 mayoral campaign.
Significant State Problems
As in previous years, concerns over finance and employment will
remain the foremost difficulties faced by the state. However, no
new cigarette excise tax increases are anticipated at this time.
RESOURCES - STRENGTHS AND WEAKNESSES
Tobacco Segments
Strong support from the I.T.C.D.A. and member company personnel
forms the core of our grassroots program in Illinois. The
association also greatly supplements our direct lobbying and
campaign support activities.
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Illinois, page 2
11 'Business _.__, -
Due to concerns regarding the Illinois Clean Indoor Air bill, our
business allies are growing in numbers and participation. The
state Chamber of Commerce has been extremely supportive and will
remain so during similar drills in 1987. The state restaurant
and bowling proprietors associations have both greatly increased
their support.
Labor
In spite of personal contacts with organized labor, labor
representatives have done little on our behalf. Recently,
however, AFSCME indicated great interest in defeating restriction
legislation. During 1987 that contact will be used to encourage
more support from other labor organizations.
Fire Groups
Despite industry efforts to involve this segment, little
political support has been received. We will, however, continue
our efforts to gain fire officials as allies.
ANTI-TOBACCO FORCES
The Illinois cancer society retains two high-level, independent
legislative agents. Additionally, the state medical society is
involved in a broad-based anti-smoking coalition.' Thus, both
political tactics and grassroots support for anti-tobacco
activities are of unusually high quality in this state.
TOBACCO INDUSTRY
Brief History of Successes and Problems
We have successfully prevented enactment of the Illinois Clean
Indoor Air bill for 11 years; however, it is important to note
that in 1986 the bill was only a few votes short of passage in
the House. Tax issues at the state and local level have -
presented the greatest difficulty for our industry. Local
cigarette excise taxes currently exist in Chicago, Evanston,
Rosemont and Cook County.
Major Issues - State and Local
Tort reform, including product liability, will continue to be a
considered during 1987 in Illinois. Additionally, we anticipate
another attempt to pass a state clean indoor air bill again next
year. To date, local legislation has not been introduced in many
communities; however, as with other midwestern states, more
introductions may be anticipated.
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Illinois, page 3
Outlook
Due to activities we undertook late in 1986 to encourage
large-scale business support for voluntary smoking policies, we
anticipate again defeating the clean indoor air bill. Further,
this effort may serve to blunt those activities at the local
level. We also feel this business coalition may be helpful in
defeating other anti-tobacco legislation.
December 1986
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INDIANA
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PREFACE
Indiana is a contrast of urban and rural demographics. The major
industrial concerns are centered in a few primary cities. The
state is considered politically conservative.
The state's population is 5.5 million; it has a market share of
2.7 percent. ,
STATE OVERVIEW
Economic Condition and Outlook
Unemployment is below the national average. Due to the state's
heavy reliance on the agricultural base, national farm policy can
greatly affect its employment and general economic well being.
Political Situation
Indiana remains a traditionally Republican state. With the
exception of the Secretary of State, all state offices are in
Republican hands. The Senate (30-20) and the House of
Representatives (52-48) both have Republican majorities. In the
Senate, leadership and chairmanships are expected to remain
largely the same. The Speaker of the House did not succeed in
his re-election bid; that, coupled with the contention of three
House seats, means leadership and chairmanships are expected to
change.
Significant State Problems
Revenue returns for the state declined in the last half of 1985,
came back in the first six months of 1986, then started declining
again in the last six months of 1986.
in the 60-day session of the Indiana Assembly.
Welfare and educational funding will continue to be major issues
Introduction of excise tax increases certainly should not be
ruled out in 1987, even though the administration says the state
will try to live within its means.
RESOURCES - STRENGTHS AND WEAKNESSES
Tobacco Segments
Indiana's tobacco family continues to be cohesive and effective.
Tobacco farmers, warehousemen and company personnel consistently
are responsive to our action calls any tobacco-related concern.
Business
Indiana, page 2
The position of the Indiana State Chamber of Commerce remains the
same for our industry: we cannot expect them to take a.public
position on an issue concerning only tobacco. However, the
Indianapolis Chamber-of Commerce will oppose anti-tobacco
legislation for the 1987 session. This position will help bring
the State Chamber along for "behind the scenes" lobbying.
Indiana's manufacturing association, state restaurant
association, state retail association and fourteen other allies,
will continue to oppose public and workplace smoking restriction
issues, but most will not express concern over proposals to
increase cigarette taxes.
Labor
Labor in Indiana remains sensitive to the fact that some member
companies are not unionized. But personal relationships still
exist between TI and elements of organized labor in Indiana,
therefore, labor elements will continue to be very helpful in
opposing anti-tobacco legislation.
ANTI-TOBACCO FORCES
These forces have long been present in Indiana,.but previously
have not been organized statewide. The state cancer society and
state medical association have been organizi_ng for the past year,
however. According to the press, they will work hard for passage
of a bill to ban smoking in restaurants, public and workplaces
during the 1987 General Assembly session.
TOBACCO INDUSTRY
Brief History of Successes and Problems
The industry has defeated clean indoor air bills in the Indiana
General Assembly since 1972, and has been successful in defeating
local ordinances for the past six years.. However, the
restriction bill in 1986 was defeated by only two votes in the
House. Therefore, we see the need for an extended mobilization
in 1987.
The cigarette excise tax rate has not been raised since 1977. We
have defeated several bills since that time, but we are
approaching a tough tax fight year.
Major Issues - State and Local
Fiscal concerns are foremost in the minds of state and local
legislators in Indiana. State legislators may turn to excise
taxes to solve these concerns.
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Additionally, we anticipate another attempt to pass a state clean
indoor air bill. To date, local legislation has not been
introduced in many communities; however, the cancer society notes
that if the state assembly doesn't pass clean indoor legislation,
it will work to enact local ordinances. -
Tort law provisions, including product liability laws, were
revised in 1978 by the Indiana General Assembly and are
considered to be among the toughest in the U.S. Little action
directly related to product liability is anticipated.
Outlook
Anti-smoking groups show signs of strengthening as lobbyists in
the state capitol. Our continued success against "clean indoor
air" legislation at the state level will be more difficult than
ever before because of the close vote in the 1986 session. We
will continue to encourage business support for voluntary smoking
policies and programs.
The new Speaker states he does not anticipate major tax increases
next year, despite the state's budget balancing problems.
However, he hasn't ruled out miscellaneous tax increases such as
those on alcoholic beverages or cigarettes. It will be a real
challenge to prevent passage of an increase in Indiana's
cigarette tax.
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IOWA
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PREFACE
Iowans enjoy the most fertile farmland in the world. The state's
farm-based economy dates back to post-Civil War days when the
early move westward made Iowa a crossroads for frontier settlers.
Its German-Catholic and Scandinavian-Protestant population lives
primarily in rural settings. During the past 50 years,
technology has made Iowa farmers some of the most productive
farmers in the world. The state's industry, centered mostly
around Des Moines, has focused in the banking and.insurance
industries. Iowa has, in the past, distinguished itself as a
leading meat processor and farm equipment manufacturer.
Today however, Iowa is in dire straits economically. Its farm
economy is on the brink of collapse, its equipment manufacturing
is in a depressed condition and an uncertain future with regard
to its financial community clouds the future further.
The state of Iowa, with 2.9 million people and a market share of
1.2 per cent, is controlled by Democrats in both houses; its
Governor is Republican. Iowa's current economic situation is
grave: plummeting farmland values, reoccurring budget deficits,
a shrinking farm import market and depressed farm implement
manufacturing. All of this points to a very tenuous economic
climate in Iowa for the remainder of the 1980s.
STATE OVERVIEW
Economic Conditions and outlook
Iowa's economic situation is a much more complex problem than the
depiction of an "Oil-Can Harry"-type loan officer evicting the
hard-working farmer while his runny-nosed and teary-eyed children
look on desperately.
Iowa land values have plummeted due to speculation and mid-1970s
inflation-fueled prosperity. Banks were more than happy to loan
money on farm land collateral, using an ever-rising and sometimes
questionable land value appraisal as the yard stick for loans.
Land that was going for $2,000 an acre, is now worth $600 an
acre. That farmer who took out a $100,000 note from his friendly
banker, now finds himself in a dilemma. When the bank reviews
the note and determines that the land is only worth $600 an acre,
that banker must compute the generally assumed "80 percent of
appraisal" as the loan value. The farmer's equity at $2,000 an
acre, based on an 80-percent loan value rule, was $100,000. Now,
that same land, worth $600 an acre, only provides the farmer with
$37,500 of land value or only $30,000 of loan value.
Iowa, page 2
Due to weather conditions, one-third of all crops are left in the
field unharvested. Farmers have no borrowing power. Therefore,
the farmer in trouble stays in trouble. The crop is still in the
field, so there is no money from the crop...the farmer needs seed
for the next planting, but he has no money. And, since he can't
borrow, his options are very limited.
Political Situation: Current and Outlook
Governor Branstad was reelected over former Senate majority
leader Lowell Junkins by a margin of 52-48 per cent. The victory
for Branstad is not considered good news•for the tobacco industry
due to the influence of Mrs. Branstad, a very vocal anti-smoking
campaigner.
The Democrats will maintain control of the Iowa House of
Representatives by a margin of 58-42. The new Majority Leader is
Representative Bob Arnould (D-Davenport).
In the Senate, the Democrats will maintain control by a margin of
27-23.
With regard to Congressional elections, incumbent Senator Charles
Grassley (R-IA) regained his seat by an overwhelming majority of
66-34 per cent. The surprise victor for the 3rd Congressional
District seat was Democrat Dave Nagle, who defeated
Representative John Mclntee by a margin of 55-45 per cent. This
particular race is not good news for the tobacco industry in that
Mclntee was a very close friend of the industry.
In the 6th Congressional District, "Love Boat" actor Fred Grandy
won a tight race to become the new Republican member of Congress
in that district.
Significant State Problems
Iowa faces some of the Midwest's most troubling problems during
the coming year:
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Disastrous farm economy.
Depressed farm equipment manufacturing.
Huge budgetary shortfalls.
0 Perceived lack of confidence in financial
institutions.
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RESOURCES: STRENGTHS AND WEAKNESSES
Tobacco Segments
Iowa's tobacco segments are not always dependable. Its
wholesaler association, even with recent overtures, has not been
responsive to general tobacco industry legislative concerns. If
a choice between a vote on the state's minimum mark-up law or an
increase in the state's cigarette excise tax, the wholesaler
association's choice would be the former.
There are no tobacco farms in the state of Iowa; however, major
efforts are underway to work with farm groups for help on tobacco
issues.
Business
The Iowa business community, concentrated in the Des Moines area,
can be a source of coalition help for our issues. Additionally,
we have had good success in working with chambers of commerce,
business associations and the hospitality industry.
Labor
With the depression in the farm equipment manufacturing industry,
and considering several meat processing plant labor strikes,
labor as an organization, is an unreliable ally. It has enough
problems of its own.
Institute Resources
The most valuable resource
Iowa has been the securing
represent our industry, as
honorarium program.
ANTI-TOBACCO FORCES
provided by The Tobacco Institute in
of the best possible lobbyists to
well as the continuation of the
For five legislative sessions, clean indoor air bills have been
introduced and defeated. However, anti-industry forces headed by
lung association operatives, have announced a major new effort
during the upcoming legislative session.
The Iowa political environment has not succumbed to the national
hysteria regarding indoor smoking restrictions. Due to a more
professional fund-raising effort, however, lung association
lobbyists will be in better financial shape and more able to
organize locally regarding their agenda.
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TOBACCO INDUSTRY
Success and Problems - History
The major disappointment in 1985 was that the FET sunset
precipitated an 8-cent "mind set" in the Iowa legislature.
Originally viewed as a "pick-up" or a contingency based on the
FET sunset, Iowa's $75 million budget shortfall generated the
momentum for passage of an outright 8-cent cigarette tax increase
that year. These conditions still exist and will continue to
exist during the next legislative session.
Major Issues - State and Local
The following issues will continue to loom on the horizon:
o Smoking Restrictions
A major effort to promote a state-wide anti-smoking
bill will be given high priority by lung association
operatives.
o Tax Increase
Due to the dreadful economic situation, a cigarette
tax increase is always possible.
o Sampling Bans
Coupled with smoking restrictions, a sampling ban
may become a part of a complete and comprehensive
anti-smoking package.
Outlook
It is our hope that 1987 will be as successful as 1986. However,
the legislature will go to the line of least resistance, and it
is our expectation that a fight on cigarette tax increases will
ensue early in 1987. Additionally, we anticipate a strong effort
by our adversaries to enact comprehensive workplace smoking
measures.
December 1986
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KANSAS
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PREFACE
The State of Kansas is generally regarded as rural, agricultural,
and staunchly conservative. While the application of these
characteristics is valid, it would be inaccurate to view Kansas
only in this way. For example, Johnson County is urban, affluent
and a major business center, and Wichita, a major metropolitan
area, is the home of a huge aircraft manufacturing industry.
Kansas' diversity manifests itself in the state capitol. While a
golid Republican majority exists in the state legislature, its
membership splits as frequently on an "urban vs. rural" basis as
along partisan lines. The gas and oil industries join aircraft
manufacturers and agricultural concerns as major influences in
the state's politics.
The state population was 2.4 million in 1980. Kansas has just
over a one-percent market share.
STATE OVERVIEW
Economic Condition and Outlook
With few exceptions, Kansas' economic condition is very poor. The
meat packing industry in Kansas City is relatively steady, as is
aircraft manufacturing in Wichita, although it is known to have
drastic ups and downs corresponding with the national economy.
The western two-thirds of Kansas is depressed, as are other major
agricultural centers of the country. The situation has been made
worse by low crude oil prices and the resulting reluctance of
companies to explore Kansas' gas and oil reserves. Kansas
farmers and their neighbors in related industries will face a
serious and continuing struggle for some time to come.
Political Situation
Kansas is solidly Republican. Its U.S. Senators, three of five
Congressmen and the Governor are Republican; and both houses of
the state legislature are controlled by the GOP.
Kansas' Democrats best hope in 1986 was to elect Lt. Governor
Thomas Docking (whose father and grandfather have served as
governor) to the Governor's office. However, Docking was soundly
defeated by former House Speaker Mike Hayden. In 1987,
Republicans will control both the Governor's office and the state
legislature for the first time in eight years and can be expected
to move rapidly forward with their legislative agenda.
Kansas, page 2
Significant State Problems -''
It is not necessary to discuss in depth the agricultural
depression and its effect on the state. This is truly a problem
of national scope and will persist in the forseeable future. A
related problem worthy of note is water. Kansas is engaged in
squabbles with neighboring states over the use of water from
shared streams. Water shortage is an especially serious issue in
western Kansas where irrigation is vital to crop production.
The tremendous fiscal problems faced by Kansas in 1986 will not
be as serious in 1987. This is primarily because of the one-time
"windfall" in income taxes the state will enjoy due to federal
tax reform. However, the state must anticipate future revenue
shortfalls if the price of crude oil remains low and state
severance taxes remain relatively unproductive.
RESOURCES: STRENGTHS AND WEAKNESSES
Tobacco Segments
The principal tobacco-related organization'in Kansas is the
Kansas Tobacco-Candy Distributors & Vendors Association, one of
few such groups that encompasses both the wholesale and vending
segments of the industry. The KCTV has been a tremendously
responsive and valuable ally of The Tobacco Institute for many
years, but is now experiencing some internal problems that may
hinder its effectiveness.
Harry O'Riley, who has served as KTCV Executive Secretary for
many years, is now 77 years old and has announced his retirement.
This period of transition and a shortage of Association funds to
retain competent staff is, at least, troubling. Nevertheless,
KTCV leadership is committed to finding and retaining a competent
executive secretary and legislative counsel. Accomplishing this
is essential to maintaining the association's viability and
avoiding a split between wholesale and vending interests. "L
The Institute's member companies have produced a large number of
excellent TAN Activists in Kansas. These individuals have proven
to be invaluable in maintaining an awareness system and acting as
the catalyst to an effective grassroots lobby.
Business
The major lobbying group for business is the Kansas Association
of Commerce and Industry. While KACI is not a consistent ally of
The Institute, it will support a TI position when it is in
keeping with perceived business interests. A case in point was
in the 1985 legislative session when KACI representatives lobbied
against an increase in the state cigarette tax, arguing that the
revenue it produced would be insufficient to fund a program of
inventory tax relief favored by KACI.
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The Kansas'Retail Council within the state Chamber of Commerce
has been helpful to The Institute on a number of occasions,
especially in fighting smoking restriction legislation. Bud
Grant, the KRC Executive Director, has very strong feelings on
this issue and has been consistently cooperative.
Labor
Inasmuch as Kansas is a "right to work" state, organized labor is
not a major political force. Most labor unions are concentrated
in the Kansas City and Wichita areas. They have some influence
with Democratic legislators, but have never taken public stands
on tobacco-related issues.
Fire Groups
Firefighter organizations in Kansas do not constitute a lobby of
ahy major consequence. The industry has had two brushes with the
state fire marshall in recent years. In 1984, legislation was
introduced and defeated which would have earmarked a portion of
the state's cigarette tax for the fire marshall's office. In
1985, when the Kansas legislature began discussing "fire-safe"
cigarettes, the fire marshall had discussions with TI
representatives and concluded that the idea had no merit.'
ANTI-TOBACCO FORCES
Kansas has no shortage of anti-tobacco activists. As early as
1978, a GASP organization in Wichita pushed a smoking restriction
law through the city council. This ordinance is now almost
totally ignored. The Wichita GASP group seems largely dormant.
"Kansans for Non-Smokers Rights," headquartered in Topeka, is
presently the largest (claiming 300 members) and most aggressive
anti-smoking group in the state. KNSR convinced Topeka City
Councilman Gene Miles to introduce a smoking control ordinance
before the Council, and it was approved in early 1986. Elements
of this same group were successful in passing a limited smoking
restriction ordinance in Lawrence.
An unnamed group of anti-smoking activists in Overland Park
became active in 1984 with logistical and financial support from
the American Lung Association. The group put together a very
aggressive campaign to obtain enactment of a stringent smoking
restriction law, targeting primarily restaurants and workplaces.
They were nearly successful. However, the ordinance ultimately
approved by the Overland Park City Council was relatively mild
and contained no workplace or restaurant restrictions.
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Kansas, page 4
Many of the same anti-smoking activists involved in the Overland
Park ordinance fight have twice tried a similar effort in Olathe,
a neighboring community. The Olathe City Commission has
rejected, outright, their proposals.
At present, Kansas' anti-smoking groups have not formed any
statewide coalition to press for legislation in the state
capitol.
TOBACCO INDUSTRY
Brief History of Success and Problems
With the exception of Wichita, Topeka and Overland Park,
anti-smoking organizations have had no success in passing
ordinances in Kansas. In the same vein, at least six smoking
control proposals have been introduced in the Kansas legislature
during the past four years. None has progressed beyond the
committee level. Legislation concerning "fire safe" cigarettes
and sampling restrictions has similarly died.
The tobacco industry's major legislative problem in the State of
Kansas has been an inability to defeat tax increase proposals.
The state's tax has increased five times since 1.964. The latest
8-cent increase, approved in the 1985 session, brought the tax to
24 cents per pack, one of the highest rates in the nation.
Major Issues -- State and Local
Like many other-states which have depended heavily upon gas and
oil severance taxes, Kansas now badly needs to restructure its
taxing scheme. Otherwise, the state will continue the "feast or
famine" cycle produced by wildly fluctuating petroleum prices.
Governor Mike Hayden should be expected to take the lead in
dealing with this major problem.
Given the number of active anti-smoking groups in Kansas, it is
realistic to expect smoking restrictions proposals at both the
state and local levels in 1987.
Outlook
Legislative counsel has been adept in the past at maneuvering
anti-smoking bills to quiet defeat in the state capitol. This
trend should continue at the state level.
The Institute's major difficulties in Kansas during 1987 will be
in dealing with local smoking restriction proposals. History has
shown that when anti-smoking activists are frustrated in state
capitols, they turn their attention to municipalities and their
city councils. With this in mind, 1987 may very well be the year
when such cities as Wichita, Salina, Lawrence and Pittsburg
consider smoking restriction ordinances.
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December 1986
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KENTUCKY
PREFACE
Traditionally, Kentucky has had four sacred cows: horses, coal,
liquor and tobacco. Each of these has been treated with a
certain degree of "tenderness" during the legislative process.
Tobacco, Kentucky's number one cash crop, provides much direct
and indirect income for state coffers. Only during Governor
Brown's administration have we seen any organized efforts against
tobacco; a tax bill was introduced in 1982, his last session. He
later signed the Kentucky Health Plan, which named cigarettes as
a health hazard.
Kentucky's market share is 2.4 percent.
STATE OVERVIEW
Economic Condition and Outlook
Considering the poor economies in many states, Kentucky's remains
in fair condition. The state is expecting a $88.5 million
shortfall in revenues on a $3.2 billion budget. Some automatic
cutback programs have taken effect, and the governor has
announced that $25 million will be taken from the "rainy day"
fund. The shortfall was created by absence of inflation - a
6-percent inflation rate is required to break even on projected
revenues.
There has been a great deal of hassle in Kentucky this
yearbecause of the way the location of a Toyota plant was
handled. The state has gone into debt roughly $200 million in
bonds to back this plant, which should provide 2,000 direct jobs
and many indirect jobs. Since the auto plant is located in the
center of the burley/bluegrass belt, it is expected to offset
some of the poorer conditions which exist because of the lagging
farm economy.
The federal tobacco program is one of the key factors in
stabilizing Kentucky's farm economy. Without the program, land
prices could fall dramatically. Many small family farms could be
forced out of business. Small and large banks would be damaged
severely through defaults.
Tobacco has a positive ripple effect throughout Kentucky's
economy. If, however, the tobacco economy fails, the negative
ripple effect will be very harsh. The changes in the tobacco
p.rogram, which have lifted the burden of the pool from the
farmers, should help. However, the low prices in the opening
days of the market have dampened spirits.
Kentucky, page 2
Political Situation
Kentucky is primarily a conservative Democratic state. One
congressional seat changed this year. Gene Synder (R) retired
and was replaced by Jim Bunning (R). All other seats remain
unchanged.
The State House and Senate elections showed very few surprises.
The political balance has not changed; Democrats still have
substantial control.
The 1987 governor's race still has no clear cut leader. The
Democratic primary will be wide open for several more months.
Significant State Problems
The state has a small revenue shortfall, but it is manageable.
The farm community remains fretful and sluggish. Unemployment
teeters around 7 percent.
All in all, the economy is in the doldrums.
RESOURCES: STRENGTHS AND WEAKNESSES
Tobacco Segments
All segments of the tobacco industry are present in Kentucky.
Each is, in turn, represented by an organization or association,
sometimes with overlapping interests and efforts.
Growers: Kentucky Farm Bureau
National Farmers Organization
Grange
Council for Burley Tobacco
Kentucky Seed Improvement Association
Kentucky Seedman's Association
Burley & Dark Leaf Export Association
Burley Growers Cooperative
Burley Farmer Advisory Council -
Burley Auction Warehouse Association
Burley Leaf Dealers Association
The Kentucky Department of Agriculture has always been a
vociferous supporter of tobacco. We are also very fortunate to
have an extremely active and effective wholesaler association.
Both groups are active in the legislative process. The Kentucky
Tobacco and Candy Association maintains a lobbyist/executive
director who is very effective.
The Council for Burley Tobacco has an on-going program for
congressional aide education, "The Bluegrass Agricultural Tour."
TI staff participates in the planning, development and
implementation of this project, which brings 25-30 staffers from.
Congress to Kentucky every year.
