Lorillard
870000 State of the States
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- Cbs
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- Chrysler
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- Ky House
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- Ky Treasurers Assn
- La Assn of Business +
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- La House Health + Wel
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- Lincoln Chamber of Com
- Louisville Fire Dept
- Mama
- Ma Automatic Merchand
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- Ma Food Assn
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- Md Assn of Retail Mer
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- Md Farm Bureau
- Md Hotel Motel Assn
- Md House
- Md House Environmenta
- Md Legislature
- Md Nurses Assn
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- Md Senate
- Md Senate Budget + Ta
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- Ms Senate Health + We
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- Roberts, D.
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- Singel, M.
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- Terry, M.S.
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- Thurber, M.
- Tindal, L.
- Violet, A.
- White
- Wieczorek, D.E.
- Wilder, J.
- Wilder, L.D.
- Willey, E.E.
- Wimmer, J.W., J.R.
- Wright, R.
- Adams, B.
- Master ID
- 80420206/0485
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Kentucky, page 3
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Finally, Kentucky is the headquarters for Brown and Williamson
Tobacco Company. In addition, Philip Morris, Lorillard,
Pinkerton Tobacco and R. J. Reynolds have manufacturing or
processing operations here.
Many people are involved in the tobacco industry in Kentucky,
literally from the seedbed to the supermarket. Each of the
groups mentioned is considered a resource.
Business
In the past we have had excellent cooperation from the Kentucky
Chamber of Commerce and Associated Industries of Kentucky. These
organizations are actively supported by many members of our
industry coalition. They are aware of the tobacco industry's
impact on Kentucky's economy.
The local chambers in Louisville, Northern Kentucky, Lexington,
Paducah, Bowling Green and Owensboro are all cognizant of
tobacco's importance. They work cooperatively with TI staff to
prevent restrictive measures. '
We share common interests with the Kentucky Bankers Association,
Kentucky Retail/Wholesale Grocers and the Kentucky Restaurant
Association.
In Kentucky we are fortunate to have governmental organizations
interested in tobacco. We have good working relationships with
the Kentucky County Judge/Executives Association, Kentucky
Municipal League, Kentucky Association of County Officials, and
the Kentucky Treasurers Association. Most members of these
groups are touched by the tobacco industry. Many are tobacco
farmers or have family involved in tobacco farming.
Labor
Louisville and Lexington -- and Kentucky in general -- are heavy
in union organization. Representative Ron Cyrus heads the
AFL-CIO. He has been a friend and supporter of tobacco, and we
have received support from his staff.
Fire Groups
The Louisville Fire Department requested support from our member
companies for a smoke detector program in 1985. TI contributed
in their behalf. It has not been necessary to ask any fire group
in Kentucky for legislative support.
ANTI-TOBACCO FORCES
There are no organized groups in Kentucky that attempt to disrupt
the tobacco industry. A group called H.E.C.K., or Health
Education Consortium of Kentucky, which is comprised of doctors,
nurses and some educators, is the closest we have to an
anti-tobacco organization. Thus far, they have been ineffective.
Kentucky, page 4
The Department of Health and Human Services began observance of
national "smokeout" day under Governor Brown. Brown, whose wife
is no friend of tobacco, was the first Kentucky Governor ever to
sign anything condemning tobacco.
TOBACCO INDUSTRY
Brief History of Successes and Problems
We have been successful in defeating all attempts to increase the
three-cent cigarette tax, or to restrict the use of tobacco in
Kentucky. Not to be repetitive, but this state depends on tobacco
for much of its livelihood.
Farmers, warehousemen, importers/exporters, auctioneers, leaf
processors, manufacturers, wholesalers and retailers are all
involved in state and local politics. They are involved in
business and social organizations. Leaders in the academic
community recognize tha.t tobacco supports the university system.
There was a rift in the tobacco family in the 1986 session. It
was caused primarily by House Speaker Pro Tem Pete Worthington.
He agreed with Congressman Rose's ideas and introduced a
cigarette tax to trigger when the price supports went below a
specific level. The cigarette tax would have funded income tax
credits for Kentucky burley producers. When the Kentucky Farm
Bureau broke ranks we were unable to hold the bill on the House
floor. We were, however, able to keep the bill in committee in
the Senate.
The most difficult part of TI's job is to communicate with all
segments of the industry and to ascertain whether they are moving
along the same path on specific issues.
Major Issues -- State and Local
The major issues will remain:
Health care cost containment
The tobacco support program
The loss of revenue sharing
Workman's compensation
Outlook =.
There is no session scheduled for 1987. However, there have been
repeated statements on the need for a special session to deal
with workman's compensation and other business problems. We
should remain watchful in this regard. If there is a special
session, there will be efforts to expand the call.
(
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December 1986
80420298
v
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No state has seen more drastic changes in its economy and
standard of living in the past generation--up, down, and
sideways--than Louisiana. Forty years ago its income level was
about 60 percent of the national average; as late as 1970 it was
about 75 percent. In the early 1980s it reached 90 percent; and
so, accounting for differences in local taxes and cost of living,
income levels in Louisiana had essentially reached the national
average.
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Yet as the 1980s went on and the national recovery surged ahead,
Louisiana slumped._ Its unemployment rate was, suddenly, one of
the nation's highest, and income growth stopped. This may just
look like a pause on the charts, but for many Louisianans it
spelled catastrophe. The reason is that Louisianans had come'to
expect rapid growth, had banked on it, literally; citizens made
all their plans on that basis.
New Orleans, even in its poor neighborhoods.
When prosperity failed to show up, they were in trouble. As a
symbol of the situation, the 1984 World's Fair in New Orleans
serves nicely. Planned on an unrealistically optimistic basis (it
was outdoors and open mostly during thesteamy Louisiana summer),
it was overpriced for tourists and nbt of much interest to
business travelers. It was sloppily and perhaps scandalously
financed by the state government and wound up millions of dollars
in debt.
.::;.. _
Since 1935, proteges of former Governor Huey Long and members of
the Long family have held high political office in Louisiana.
Elections for 30 years split on pro- and anti-Long lines. Huey
Long built a coalition of the rural poor, including some blacks,
against the rich and better off. He never, however, did well in
always allowed to vote.
What is so amazing is that this structure of politics was
superimposed on a state already divided in two other ways. First
was division by race. Although Louisiana has always had a large
black population (in 1980 the third highest black percentage
among states), many blacks, especially in New Orleans, were
The other division was between Catholic and Protestant, Cajun and
Baptist. About one in every six Louisianans today speaks French
as his native tongue.
Louisiana, page 2
In short, there are many cultural differences between the
teetot°aling Baptists of northern Louisiana and the beer-drinking
Cajuns of the south, and those differences emerge from time to
time in politics, usually in no more threatening form than a
preference for a candidate of one religious background or
another.
Louisiana's rapid economic growth for a time smoothed over some
of these old divisions: elections are not referenda on the Longs
any more, racial issues are submerged if not gone, and cultural
hostilities between Cajuns and Baptists are of little importance.
Louisianans are family people, with lots of children. The
politics of cultural variety is not yet a major factor here. As
for politicians and businessmen, they are judged by results, not
the process by which they achieve them, ends justify the means.
STATE OVERVIEW
Economic Condition and Outlook
Presently the Louisiana economy is in its worst position since
the Great Depression. Oil is at $15 a barrel, gas is down
proportionally. Drilling is way down, offshore activity is
limited. Thousands of vessels, rigs, etc., are rusting away
along the banks of rivers and bayous.
Unemployment is the highest'in the nation, with some areas in the
30 percent category. Agriculture is down. Soybean farmers are
going out of business. Sugar cane farmers are barely able to
survive. Real estate values are down. Farm land value is down
from $1,500 per acre to $600 - $800 per acre. Some banks are in
trouble, some have closed as a result of the economy. -
Tax revenues have been reduced by at least 20 percent in just
about all areas. The state has a deficit for the 1984-85 fiscal
year of about $200 million and a projected 1985-86 fiscal year
deficit of $177 million, total $386 million. This is after a 10
percent cut across-the-board ordered by the governor.
Economic and fiscal conditions will cause our industry to be:
a. An appealing target for increasing state taxes.
b. Faced with legislation giving all other taxing bodies
the right to tax tobacco. The New Orleans consumption
-..tax is an example of this sort of tax. -
c. Subject to legislation allowing the state to keep all of
the proceeds of the present tobacco taxes, thereby
encouraging local governments to levy their own taxes.
d. Hit with a smokeless tobacco tax. There is presently
no tax on smokeless products.
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Louisiana, page 3
Political Situation
The present political situation in the state is highly
disorganized. It is felt that up to 50 percent of the present
members of the legislature may not be back for many reasons after
the next elections in 1987.
It is generally concluded, by people in the know, that the
present governor will not run again. However, he should not be
counted out yet. There is a long line of possible candidates.
Of the Republicans, only one will make the race. He will be
selected by the Republican party and the rest will close ranks
and support him. The Democrats may not be so cooperative. The
race is wide open and it's anybody's guess who the winner will
be.
In order to solve the short-range fiscal problems, the governor
called a special session in December 1986. While the call was
open to all forms of revenue-raising, no increase in the state
excise tax was proposed. A defeated bill would have allowed for
local governments to tax tobacco and other products, however. As
yet, there are no long-range plans for solving the state's fiscal
problems. ,
Significant State Problems
The state faced a deficit in 1986. The revenue shortage will
cause a decrease in government services, a general increase in
taxes, or both.
Money is needed ta fund education, including parochial schools
which presently receive public funds. The state owns hospitals,
which are not_ profitable. Prisons are overcrowded, and the
unemployment rolls are a burden. There is a need to restructure
the property tax. By lowering the homestead exemption, the
pressure on local communities would be lessened. Added to all of
these problems, Louisiana state government is bloated with
high-paid bureaucrats.
It will take decisive, bi-partisan action by leadership to put
Louisiana back on the path to financial security.
RESOURCES: STRENGTHS AND WEAKNESSES
Tobacco Segments
There are fewer than ten tobacco farmers in Louisiana. They have
almost no impact on legislation. The perique tobacco grown there
is sold through the only warehouse for chewing and pipe blends.
It is grown for export to European and Asian countries.
The wholesale and vending segments of our industry are active
politically. They participate at the local and state levels of
;vovernment. The wholesale association has a full-time executive
elirector who lobbies. She works closely with TI's lobbyist.
Louisiana, page 4
Business
We have worked with the Hotel/Motel Association, Restaurant
Association and the Wholesale Grocers' Association. The
Institute is a member of the Louisiana Association of Business
and Industry. We hope to get more participation from this group
in the future. Individual company representatives have been most
helpful on a voluntary basis.
Labor
Labor groups have been quiet in past sessions. The primary union
lobbyist and his wife are not pro-tobacco. We have requested
assistance with contacts from our Washington office and from our
union friends in Kentucky.
Fire Groups
We have had no occasion to deal with fire groups in Louisiana.
They have not been involved in tobacco issues. Their legislative
friends usually vote with us.
ANTI-TOBACCO FORCES
Three health organizations announced a major anti-smoking
campaign on November 27, 1985 aimed at one million Louisiana
smokers and youngsters. Sponsors of the campaign, the American
Heart Association, American Lung Association and'American Cancer
Society, designed the program to coincide with the new surgeon
general's-"warning labels" that began appearing in November,
1985.
The health agencies want their public service advertising
campaign and educational program to help publicize the serious
health messages on the labels. The campaign has continued
through 1986.
Other goals of the group included: passage of non-smokers rights
legislation on the state and federal level; raising money for
cancer research by increasing state tobacco taxes; lobbying
against cigarette promotions and cigarette company-sponsored
events and "fighting R.J. Reynolds in their deliberate and
calculated attempt to mislead the public" through its
advertisements.
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Louisiana, page 5
TOBACCO INDUSTRY
Brief History of Successes and Problems
In a 1984 special session called one week before the regular
legislative session, the cigarette tax was increased by 5 cents,
to 16 cents a pack. High cigarette tax rates in neighboring
Texas and Arkansas helped make the tax hike palatable to
legislators. The increase was the first in 14 years. Also, at
that time, we were able to convince the Governor not to use "a
percent of value tax" which is what the proposed, legislation
originally contained.
During 1985, legislation to increase the tobacco tax for cancer
research was proposed. We were able to hold back that
legislation by appropriating instead a set amount from the state
general fund. $one million of the tobacco tax was appropriated
for cancer research. However, it was not put in the appropriation
bill and the funds could not be used until 1986.
During 1986 the health organizations were relatively quiet in
Louisiana. They have been involved with the studies pertaining
to the relationship of high lung cancer and the petrol chemical
industry.
Anti-smoking legislation was introduced in each of the past seven
years. Each time we were able to keep it bottled up in
committee. During the 1985 session one bill got out of the Health
and Welfare Committee and was killed on the floor.
In 1986 one of the main proponents of anti-smoking legislation,
Representative Jon Johnson of New Orleans, won the race for the
Senate. This was good for us because the vacant space on the
House Health and Welfare Committee had been filed by a friend of
ours, Representative Louis Jetson. A vacant place left on the
Senate Health and Welfare Committee was filled by Senator Joe
McPherson, also our friend.
In summary, only one tax increase in 15 years and no anti-smoking
legislation has been successful. A piece of enabling legislation
concerning the Superdome passed this year. It provided the
management with the right to restrict smoking in the Superdome.
After it was passed the Superdome management group realized they
had made a mistake with the legislation. Thus far, no rules of
enforcement have been promulgated.
In New Orleans a "consumption tax" of five percent was levied on
cigarettes late in 1984 and increased this year. A formal
resolution was passed by the City Council that if The Tobacco
Institute could assist in collecting revenues in another way, the
Council would rescind the tax. On December 1, 1986 during the
City Council meeting the consumption tax was amended to be
repealed if the city's earnings tax was ruled constitutional.
The increased consumption tax goes into effect January 1, 1987.
Louisiana, page 6
Outlook
There appears to be no impact on our programs as a result of the
recent elections. Congressman Henson Moore was against tobacco,
but he lost. Clyde Holloway, the new congressman, is a farmer.
It is not known how newly elected Congressmen Richard Baker and
Jimmy Hayes feel about the tobacco industry.
The state of Louisiana's economic picture remains dim. If the
OPEC nations set their oil price at $18 per barrel it will take
several years to restimulate the oil economy. We expect to see
larger deficits, maybe as much as $600 million in projected
revenues.
Two things to consider for 1987 are:
1. Odd numbered years mean non-fiscal sessions of the
legislature. To increase revenues and taxes would
require a special session.
2. 1987 is an election year. House and Senate members
have not recovered politically from the $750 million
taxincrease of 1984. This means Louisiana will
probably remain in a political and fiscal morass for
the next year.
Our most dangerous tifie will be immediately following the-
November elections when we would have to deal with the
p.ossibility of a lame duck session.
December 1986
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I
MAINE
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PREFACE
Maine is really two states. The southern coastal regions below
Augusta support more than 50 percent of the total population, and
yet cover less than one-third of the total land mass. The
northern two-thirds of-the state is largely unincorporated
territory, wilderness, logging operations, and highways
connecting a few outposts of human activity. The socio-economic
and political dynamics in Maine can be extremely volatile.
To a large extent, northern Maine is what most people perceive
Maine to be. Southern Maine--like New Hampshire, its neighbor to
the west--is one of New England's fastest growing areas. The
majority of the people who have made up that growth are vastly
different from the traditional Mainers. They demand more of -
government and are willing to pay for it. They are wealthier,
more liberal, and better educated than the indigenous population.
This backdrop of unequally shared growth and prosperity, combined
with an increasingly affluent, activist, liberal population,
suggests continued problems for not only the tobacco industry,
but all business within the state. This has become evident in
recent years. The legislature has enacted increasingly
burdensome tobacco taxes and restrictions on smoking in public
places. In addition, the legislature has enacted the highest
minimum wage base in the country, and workers compensation laws
have literally driven a number of members of the insurance
industry out of the state. The popular notion is that
Massachusetts is New England's most liberal state. Today,
however, many view Maine as the area's most liberal, anti-tobacco
and anti-business state. Ideas and legislative initiatives born
in the think-tanks and back rooms of Boston may be initiated in
Massachusetts, but they are enacted in Maine.
There are approximately 1.5 million people in Maine. It has a
0.5 percent market share and-a 28-cent per pack excise tax on
cigarettes, compounded by a 5 percent sales tax. Those taxes are
collected on approximately 149 million packs of cigarettes,
producing state revenues of approximately $29.8 million in fiscal
year 1985. This represents a decline of 7.4 million packs and an
increase of $300,000 in state revenues since 1984.
STATE OVERVIEW
Economic Condition and Outlook
Maine is a state of economic contrasts. The northern section
relies heavily on its forest products industry, and to a lesser
degree, farm and dairy industries, for survival. Like any region
that does not enjoy economic diversity, a downturn in one of
those major industries can have devastating effects.
Maine, page 2
All across the country, dairy and farm industries are having
difficulty. While the paper industry continues to enjoy
prosperity in Maine, there have been a number of adverse
legislative actions in the last few years which have hit at the
previously unassailable paper industry. These actions may give
some of those major companies concern about the future.
In the southern part of the state, the development of the
tourist, ship-building, fishing, and the service industries has
resulted in phenomenal growth and prosperity. The rate of this
growth has actually caused some to ask if there should not be
more controls on the rate and type of growth that is allowed in
the state. One of the most influential parts of this growth is
the Bath Iron Works and its locations-in both Bath and Portland.
Notwithstanding the activities of the ecologists and the
environmentalists, it is likely that the tourism and resort
industries will continue to grow during the next few years, and
will replace the paper industry as the state's largest employer.
Political Situation
The year 1986 was one of the most politically interesting and
active in some time. The Democratic party strengthened its
control of both houses. However, battles with broad interest and
appeal were fought for the statewide and federal offices.
Governor Joseph Brennan's second term expires in January 1987.
He will move to Washington as the narrow victor in the First
Congressional District race. While a variety of political
leaders in both parties tested the waters of the governor's race,.
the final candidates were Attorney General James Tierney and
Congressman John McKernan. Although McKernan will be governor,
Tierney will probably continue as the legislatively-elected
attorney general.
Significant State Problems
Primary legislative concerns in 1987 will likely focus on
environmental topics. These will include solid waste disposal,
low-level nuclear, waste disposal, ground water pollution, the
ecological impact of hydro-election production, the Bay of Fundy
electric generation project, and others. Beyond this, a variety
of issues will come back to haunt legislators in Maine. These
are likely to include education, its quality, funding, and the
accountability of its practitioners; workmen's compensation; and
unemployment compensation. Any one of these is a tough issue.
However, the combination of a variety of difficult and media-
sensitive topics and state-wide elections is likely to make for
some very interesting legislative action. .
C)
Maine, page 3
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RESOURCES: STRENGTHS AND WEAKNESSES
Tobacco Segments
Like the rest of New England, the tobacco industry in the state
tends to be disorganized and torn by a variety of petty
disagreements and competition. What organization exists, we
impose. The fact that there is not an organized wholesaler
association in the state requires a great deal of individual
contact. In contrast, the Pine Tree Vending Association, Maine
-Grocers Association, and the Associated Grocersof Maine are
extremely helpful sources of both legislative lobbying support
and grassroots involvement. For the past few years, our
relationships with these three groups have grown. They are
excellent allies.
Business
Even on matters unrelated to the tobacco industry, the business
community in the state of Maine has little real legislative
clout. This can be seen in some of the major defeats -- including
those in workmans compensation and minimum wage -- it has
suffered over the past few years.
The two main organizations representing the community, the Maine
Chamber of Commerce and Industry and the Maine Merchants
Association, have attempted to be helpful to TI and our
legislative counsel on many bills from smoking in the workplace
through sampling and advertising. Nonetheless, they are also
constantly seeking ways in which to ingratiate themselves with
the liberal Democratic majority in the House and Senate. Too
often, this has caused them to seek compromises at an early stage
rather than maintaining a strong opposition.
We have always been able to access the various associations'
members'and have found them helpful with support when they can.
Labor
Unlike other states where the AFL-CIO and general labor community
are suffering from declining blue-collar employment and a loss of
interest among workers in union concerns, Maine's labor
community, particularly the AFL-CIO and the state employees
union, are alive and well and somewhat influential.
In prior years organized labor testified on our behalf, in
opposition to both smoking restriction legislation and tobacco
tax legislation. In 1985 Maine labor took a more active role as
a result of the interest and involvement of the Maine Locals of
the Bakery, Confectionery, and Tobacco Workers Union.
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Maine, page 4
a
It is likely that we can continue to count on their support.
However, as with business, tobacco-related issues are not of the
highest priority to the labor movement.
Institute Resources
In the last few years, the most valuable resource TI has in the
state (outside of our legislative counsel and his law firm) has
been the Maine Grocers Association. On numerous occasions, that
organization and its sister group, the Associated Grocers of
Maine, have almost literally turned over the operation of their
associations and their members to the Tobacco Institute.
To a lesser degree, the members of the vending industry have
provided support, mostly on tax-related matters. The key
individual resource in the state is Mr. Charles Canning of Pine
State Candy & Tobacco, his management staff, and the 200
employees located primarily in Augusta but travelling throughout
the state.
If we are to be successful in 1987 and beyond, we must continue
to develop friends and allies in the moderate-to-liberal wing of
the Democratic party.
ANTI-TOBACCO FORCES
Under the Coalition on Smoking OR Health, anti-tobacco activists
in Maine developed a well-coordinated attack in the state
legislature. They are led by the Maine Lung Association, Cancer
Society, and Heart Association. However, there are 24 other
members of the Coalition. It is supported by State Public Health
Commissioner Michael Petit and championed in the legislature by
Reps. Merle Nelson and Peter Manning. In the past, they have used
the shotgun approach to legislative activities, and we were very
successful in deflecting their attacks. In more recent years,
they have learned to focus on one or two objectives.
In 1983 and 1984 the Coalition focused in a timely fashion on
tobacco taxes. Their goals of increasing product cost and
imposing a certain level of punitive taxation on tobacco products
combined very well with the state's need for additional revenues.
Many members of the Joint Taxation Committee would privately jeer
at the tobacco "crazies." Publicly, however, they enjoyed and
encouraged support for tax legislation providing additional
dollars for major state projects: aid to local education and tax
reform. In 1985 the anti's focused on a San Francisco-type
workplace bill and came away with a vastly weaker piece of
legislation. In 1986 their focus was on smokeless tobacco, and
they were successful in their efforts to impose a 45-percent tax
on the product.
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Maine, page 5
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TOBACCO INDUSTRY
Brief History -
The legislative history of the tobacco industry here is somewhat
checkered. In one state, we are losing the only governor to have
vetoed anti-tobacco legislation on two occasions. At the same
time, we have the calamitous 18-month period when Maine increased
its cigarette excise tax first from 16 to 20 cents, then imposed
the state sales tax, and then further increased the excise tax
from 20 to 28 cents.
Our past successes may have contributed to our recent setbacks.
Until the 1983 session, we were effectively winning every major
legislative battle. The perception that the tobacco industry was
simply winning too many took focus. That is a perception that no
legislator or legislative body wants to encourage.
We enjoyed success because we had the best legislative counsel in
the state and because we were able to support him with both
quantitative and qualitative grassroots input. However, in
recent years, the overwhelmingly negative press, a more
coordinated attack by the anti-tobacco community, and a firmer
control on the legislative process by the more liberal elements
of the Democratic party have resulted in an inability to defeat
all legislation. This condition is likely to continue into the
future.
Major Issues--State and Local
At the state level, it appears that the anti-tobacco activists
will be pre-occupied in 1987 with smokeless tobacco and
youth-related issues. These attentions should include cigarette
methods of product promotion, including sampling and advertising.
Also, we are likely to see an attempt to expand and enforce the
current workplace law.
The rash of local anti-tobacco ordinances has not yet struck
Maine, nor is it likely to do so in the foreseeable future.
However, if and when it does occur, it is likely to happen first
in the southern cities, followed shortly by action at the town
meeting level throughout the state. A well-coordinated town
meeting attack on the tobacco industry could be devastating.
Outlook
The next few years in Maine are difficult to predict. If the
national anti-tobacco fever continues to grow, it will be fueled
locally by the Boston and local media outlets. There will be
continued pressure brought on the legislature to restrict smoking
and smokers throughout the state.
Maine, page 6
Four years ago at a legislative hearing, a woman from Gardiner
suggested that the worst form of child abuse was that which
forced a child to live in a household with a parent who smoked.
The elderly woman suggested that it should become the state's
duty to identify those smokers with children, inform them that
they were being investigated, and if they did not refrain from
smoking in the home, they would have their children removed and
made wards of the state for their own protection. At the time
most people felt that this was fanatical. During 1985, without
suggesting any state actions or remedies, the director of the
Mid-Maine Medical Center in Portland called cigarette smoking by
parents a form of child abuse. No one laughed. During 1986 the
NRC reported on the effects of ETS on children. Some people in
the state may think the 1983 statement was on target.
December 1986
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MARYLAND
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Maryland,'the headquarters for major anti-smoking groups such as
GASP and ASH, and having a high concentration of federal
government employees, presents a unique challenge in fighting
smoking restriction legislation. Maryland has a population of
4.2 million and its market share is 1.9 percent.
STATE OVERVIEW
Economic Condition and Outlook
The economy remains diverse. Twenty percent of employment is
government oriented. Revenue growth predicted for 1987 will be
in the seven percent range. The state has a built-in increase of
five percent. State leaders are awaiting federal tax changes
which have not yet been quantified. There is a possibility of a
$2 billion gain in personal tax, plus a $250 million change in
corporate tax gain. In addition, there is a potential for $100
million more in miscellaneous areas.
For fiscal years 1987-89, projections are for stability with
modest growth. Maryland will have a significant budget surplus
in fiscal year 1987. Most of this will be as a result of recent
federally enacted tax reform. Therefore, no tax increases are
expected during the 1987 session of the legislature.
Maryland ranks high in per capita income, about 10th in the
nation. Of the nonagricultural work-force, manufacturing
employment is a moderately small part (12.3 percent), while both
services (23.8 percent), and government employment (23.3
percent), are larger.
Maryland also ranks high in the following economic indicators:
state and local per capita revenues (14th); state and local per
capita taxes (10th); state debt as a percent of state revenues
(13th); and state and local tax effort (11th). Maryland ranks
low in state aid from the federal government (38th).
Maryland depends more heavily than most states on selective sales
taxes. However, Maryland has a very low tax rate on distilled
spirits (47th), slightly lower than average on beer and wine
taxes, and also lower than average on public utility tax rates.
Its 13-cent cigarette tax is lower than the national average. "L
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Maryland, page 2
Political Situa tion
The Maryland legislature is Democratically controlled by a wide
margin. In the House there are 124 Democrats and 17 Republicans.
In the Senate there are 41 Democrats and 6 Republicans.
1986 was an active year for Maryland politics. All state- wide
elected offices were open in 1986. Maryland is unique in that
all state House
and end at the and
same Senate
time. seats are four year terms that start
The membership of the Maryland Congressional delegation changed
dramatically as a result of the 1986 elections. There was nearly
a 40 percent turn-over rate in the state legislature due in part
to the number of state delegates and senators running for the
U.S. Senate seat being vacated by Senator Mathias and for four
congressional seats being vacated by incumbents.
Third District Congresswoman Barbara Mikulski was elected to the
U.S. Senate. The four incumbents seeking re-election to Congress
- Dyson, Bentley, Hoyer and Byron - won without much trouble.
The races for the remaining four seats shaped up as follows:
Third District - Former House Speaker Benjamin Cardin won
election to Mikulski's old seat.
Fourth District - Incumbent Majorie Holt retired. N.B.A.
basketball player Tom McMillan (D), won the election to this
seat in a very close vote.
Seventh District - Incumbent Parren Mitchell retired. The
winner was Kweisi Mfume (D), a former Baltimore County
Councilman.
Eighth District - Incumbent Barnes ran for the Democratic
nomination for the U.S. Senate race and lost. His seat was
filled by former state legislator, Delegate Connie Morella, a
Republican.
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In the ra
won elect ce for Governor, Baltimore Mayor William Donald Schaefe
ion. _. r
Significa nt State Problems
There are
1987: four significant problems facing state legislators in
~
a. Resolving the savings and loan crisis. ~
b.
Medical malpractice and general insurance liability
availability. t~?
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d. Health cost containment. "
Transportation and education.
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Maryland, page 3
RESOURCES: STRENGTHS AND WEAKNESSES
Tobacco Segments
The tobacco segment is relatively strong in Maryland,
particularly at the wholesale level. The Maryland Association of
Tobacco and Candy Distributors and the Maryland/D.C. Vending
Association have large memberships and are very active
politically at the state level.
Tobacco is grown in a small section of the state which provides
allies in the legislature with a.strong vested interest in
opposing anti-smoking legislation. The Maryland Farm Bureau has
been active in fighting such measures, but the Maryland Tobacco
Growers Association has not.
The company sales departments have a fairly limited number of
sales personnel in the state. Most are concentrated in the
suburban Washington and Baltimore markets.
Business
Business organizations such as the Chamber of Commerce, Maryland
Restaurant Association, Maryland Hotel and Motel Association, the
Maryland Association of Retail Merchants and the Mid Atlantic
Food Dealers Association are politically active and have
considerable clout. They have all testified in opposition to
smoking restriction bills. _
Labor
Organized labor is particularly active in Maryland, with the
Bakery, Confectionery and Tobacco Workers International Union
headquartered in the suburban Washington area. Labor has been
very helpful with tobacco legislation and often testifies on our
behalf. This includes the state AFL/CIO as well as the other
unions, such as the state employees union.
Fire Groups
The most active fire groups in the state are in the Baltimore
area, which was one of the pilot cities for the initial T.I. fire
program. , -
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The Institute's resources in Maryland center on the business tU
community and the various business organizations in the state. ~O
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Institute Resources
Maryland, page 4
ANTI-TOBACCO FORCES
Mary land is a hotbed of anti-tob acco activity and a microcosm of
the national anti-tobacco scene. Many of the anti-tobacco groups
are headquartered in Maryland. So far their effectiveness has
been limited at the state level, and they are more vocal than
effective.
The proponents of smoking restriction legislation have formed a
statewide coalition known as the Healthy Majority and have hired
lobbyist, Robin Schavitz, to represent them in the General
Assembly in 1987.
The Healthy Majority is made up of a dozen health groups
including state chapters of the American Cancer Society, American
Heart Association, American Lung Association, GASP and the
Maryland Nurses Association.
TOBACCO INDUSTRY
Brief History of Successes and Problems
Much of the recent legislation at the state and local level has
been in the field of smoking restrictions. The tactic of the
anti-smoking lobby is to push for passage of several different
bills, each covering a specific public place.
In the 1986 session, for example, four bills were defeated in the
House Environmental Affairs Committee. These bills would have
restricted smoking in retail stores, food stores, restaurants,
and state office buildings. No smoking restriction bills were _
introduced in the Senate.
Senate Bill 155, which would have increased the state cigarette
tax by one cent to fund research for AIDS, was defeated in the
Senate Budget and Tax Committee. An OTP tax of 20 percent was
also defeated.
The Montgomery County Council enacted an ordinance to restrict
smoking in county government workplaces and metro stations. W
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Major Issues - State and Local .A
The 1987 legislative year will show a continuation and perhaps ~
acceleration of smoking restriction efforts, but again no laws N
are expected to be enacted. C~
Local legislative problems also accelerated in 1986 particularly
in the Maryland counties in the Washington metro area. It is
expected that this trend will continue. .
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MASSACHUSETTS
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PREFACE
From a tobacco industry standpoint, the Commonwealth of
Massachusetts may defy description. But then there are those who
suggest that from any viewpoint, the "People's Republic of
Massachusetts" defies description. During the late sixties, some
conservative Congressional leaders suggested that the entire New
England region, but especially Massachusetts, be physically
separated from the rest of the United States and floated out to
sea. Since that time, the philosophical distance between
Massachusetts and mainstream America has not shortened. In fact,
it's probably true to state that Massachusetts has more in common
with its West Coast counterpart, California, than with the vast
majority of other states, including the majority of its New
England neighbors.
Certain state inconsistencies, however, have allowed us to
survive. On the one hand, the state is known for its high level
of taxation and its lenient welfare, workers compensation, and
unemployment laws. It is one of only two states in the country
to regulate automobile insurance. Republicans are rare at the
state and local levels. But, in recent years, Massachusetts
Democrats have voted overwhelmingly for Republican candidates for
president.
An initiative petition drive recently gave voters an opportunity
to vote in support of a cap on municipal local property taxes.
Another recent initiative, to repeal state legislative pay
raises, passed. Moreover, in 1986, the voters elected to repeal
the mandatory seat belt law and the "Dukakis 7.5-percent income
tax surtax" while imposing a tax cap. Both these measures were
strongly supported by the governor.
There are 6 million people in the state of Massachusetts. It has
a 2.4 percent market share and a 26-cent per pack excise tax on
cigarettes. That tax is collected on 680.3 million packs of
cigarettes, producing state revenues of approximately $176.9
million in fiscal year 1985. This represents an increase of 11.6
million packs and increase of $3.5 million in state revenues
since 1984.
STATE OVERVIEW
Economic Condition
If Connecticut is awash in cash,
has clearly spent 1986 sunk in a
whose accounting methods you use,
Massachusetts, page 2
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the Massachusetts ship of state
sea of money. Depending on
the state has a surplus between
$500 million and $1 billion. Every elected official or appointed
bureaucrat wanted to spend it, hide it, or give it back during
the 1986 election year. Ultimately, they will return some of
this to the people in the form of a repeal of the surtax.
Despite recent setbacks for some high-tech companies like Wang
and Digital Equipment Corporation, the Commonwealth is virtually
at full employment. Recent reports indicate that there are not
enough workers to fill the seasonal jobs made available by the
Christmas holidays. Employers are resorting to paying as much as
$250.00 bounties to current employees who bring new employees
into the company. A number of businesses in the western
Massachusetts suburb of Framingham have initiated a daily private
shuttle bus service to some of the central Massachusetts
industrial communities to bring unskilled and low-skilled workers
in for full-time jobs. The cost of the transportation is paid
for by the employers.
The prosperity that is part of the Reagan and high-tech booms is
likely to continue for some time. Recent legislative actions,
like the passage of a modified unitary tax by the Massachusetts
Senate, may result in a number of companies giving some
additional thought to the opening of new facilities in the
Commonwealth. All of this has helped make the governor a strong
candidate for*President in 1988.
Political Situation
The only interesting race was for the Eighth Congressional
District. That seat was held by the Speaker of the House "Tip"
O'Neill, who succeeded Jack Kennedy. Joe Fitzgerald Kennedy, son
of late Senator Robert Kennedy, has successfully won election to
the position.
The second most interesting fight was the initiative questions
which appeared on the ballot in November. Both the surtax
repeal/tax cap and the seat belt laws repeals were approved.
Postcard voter registration was not adopted. Each of these
referendum questions is strongly associated with the current
governor.
The public and media attitude toward these two initiatives was
the only interesting part of an otherwise-lackluster governor's
race. However, Governor Michael Dukakis raised more money than
any gubernatorial candidate in the history of the Commonwealth
for his 1986 campaign, and the Republicans were unable to mount a
credible candidate. For all intents and purposes, Massachusetts
is a one-party state.
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Massachusetts, page 3
In the Statehouse, we are-likely to see a quieter year. The
fragile coalition that elected current House Speaker George
Keverian is likely to survive the brief winter adjournment and
the elections squabbles of 1986. If the coalition survives,
Speaker Keverian will begin to consolidate his power and use it
to circumvent some of the "rules reforms" forced upon him during
his first session as Speaker. On the Senate side, we have
probably seen the final election campaign of Senate President
William Bulger. It is likely that he will not seek re-election
in 1988.
This suggests a year that appears very active on the surfaceand
in the media, but is actually fairly quiet.
Significant State Problems
Massachusetts has a number of problems that it shares with other
New England states. Some of these are environmental and include
the clean-up of Boston Harbor, solid waste management,
destruction of the region's groundwater supplies, and hazardous
waste dumps. In ,7anuary 1984, Governor Dukakis declared
educational reform as the state's highest priority. To date,
there has been a great deal of breast-beating about educational
reform, but no substantive action. It is an area of concern and
one which may be addressed during the upcoming election year.
There are also a number of "human" issues which have preoccupied
the media and a number of political figures. These include the
problem of the homeless and drunk driving.
There are a great many volatile issues facing the people and the
politicians of the Commonwealth. If the local media has its way,
ETS is likely to be one which receives a great deal of public and
legislative attention.
RESOURCES
Tobacco Segments
The tobacco industry in Massachusetts is not unlike the tobacco
industry in the other five New England states. It is disjointed.
Each segment tends to go its own way. Within the wholesaling
community, individuals have a tendency to act independently of
other individuals within that segment.
The active players include: Massachusetts Food Association, New
England Wholesale Food Distributors Association, and
Massachusetts Automatic Merchandising Council. The
1985-formed/1986-disbanded New England Wholesale Tobacco & Candy
Association sought to develop and operate a wholesalers'
association spanning the six New England states. Its "on
again/off again" status was blamed on TI and the manufacturers.
Massachusetts, page 4 C )
Also working with-us on our federal, state, and local legislative
activities is the New England Convenience Store Association.
While we are capable of organizing and coordinating the
activities of all the various segments of the industry, that
coordination and cooperation would be much more valuable if the
individual members of the wholesale trade could get along.
Business
The business community in the Commonwealth is essentially a
community in fear of its life. It recognizes the extreme liberal
tendencies of the legislature and the various local boards with
whom its members mustdeal. The various associations and
individual businesses that make up this community are-extremely
selective in picking their battles and the extent to which they
will go to war. All segments prefer to find some "reasonable
accommodations" that are to the satisfaction of everyone. In
light of the other issues affecting business which are before the
Massachusetts legislature, the tobacco issue has yet to become a
top priority.
Labor
The labor community in Massachusetts, like many of the other
large industrial states of the north, is suffering from declining
blue-collar employment, lack of understanding of the history of
unionism, and a shift of perceived goals in Massachusetts. After
many years of looking with some disdain on some of the
service-type workers' organizations, the state AFL-CIO has begun
to act on their behalf. If they are successful, there is
potential for the members of organized labor to have considerable
impact on our behalf.
However, like business, labor representatives in the Commonwealth
are at best reluctant allies of this industry at the legislative
level.
Fire Groups
As a result of our activities surrounding "self-extinguishing"
cigarettes, we have developed a close working relationship with
the Fire Marshal's office in Boston. It is unlikely that this
group would be helpful on any issue other than
"self-extinguishing" cigarettes.
Institute Resources
Our greatest resource is our affiliation with Attorney William F.
Coyne. Coyne's ability to move about in a variety of legislative
circles and represent the industry is unquestionably the single
largest reason for our success to date.
Massachusetts, page 5
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Added to those considerable talents, we.have available the
activities of our allies, who have consistently offered us direct
lobbying support and access to their members. The TI office is
located in Massachusetts, providing us with much easier
legislative access in Massachusetts than any of the other New
England states.
ANTI-TOBACCO FORCES
A complete description of anti-tobacco advocates in Massachusetts
.would make a very long book. In brief, Massachusetts is one of
the founding locations of GASP. Some of the current leaders of
GASP have developed the Tobacco Product Liability Project to act
as a clearing-house for legal information related to product
liability suits against manufacturers.
In addition, the Massachusetts heart, cancer, and lung
associations are constantly involved in the anti-tobacco movement
at both the state and local levels. Of considerable concern to
the industry are the various local chapters of the League of
Women Voters. Not content to be involved with issues of voting
rights, the League has decided to involve-itself in such social
issues as smoking in the workplace. In fact, at the local level
the League has been the initial sponsor of more pieces of
anti-tobacco legislation than any other single organization in
the state.
Supporting these groups are the governor and his Public Health
Commissioner, Bailus Walker, Jr. In 1983 Walker proposed to
prohibit cigarette sales in the Commonwealth. His suggestion was
attacked by the head of the Department of Revenue and was
consequently withdrawn. Since that time the Commissioner has
been actively involved at both the state and local levels.
During 1984 and early 1985, he requested that the 351 local
boards of health take action on sampling, smoking in restaurants,
and smoking in the workplace. However, during most of 1985, the
Commissioner focused the attention of his department and the
state's Public Health Council on various smokeless tobacco
issues, including labeling, sampling, and taxation. In 1986 he
has returned to cigarette issues, but his department is currently
lost in negative press about delayed cancer statistics and
reports.
The anti-tobacco community in the Commonwealth is extremely well
organized, well financed, and finely tuned. They have moved from
the state level to the local level, attacking us on the issues of
sampling and restaurant restrictions. They have learned to
target their attacks and have retained full-time counsel.
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Massachusetts, page 6
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TOBACCO INDUSTRY
Brief History
Until the passage of a juryroom smoking restriction bill this
year, the only piece of anti-tobacco legislation to clear the
Massachusetts House and Senate since 1977 was a tobacco tax in
1983. Against all odds, we continue to win against legislative
introductions that number up to 56 in 1986.
In Massachusetts we have won only one floor vote and are unlikely
to be able to win a second one in the near future. The key to our
success, therefore, has been our ability to keep bills bottled in
committee. The response to that may be to develop massive
grassroots action in the Commonwealth during the next few years.
At the local level, we have sustained a certain number of losses,
but our record has been and remains consistently good. In most
cases, our strategy is to work through surrogates at the local
level, either in the restaurant or business communities or
friendly members of the particular board or council.
Major Issues--State and Local
Depending on the outcome of the 1986 session, which will not
close until year-end, it is likely that the anti-tobacco
activists will come back at the state level with another "Clean
Indoor Air" bill. It is likely that that legislation will again
cover the workplace. As in Maine, it is likely that the
legislature will focus on issues relating to the smokeless
tobacco industry and questions of sampling, advertising, and
taxes.
It is also likely that the numbers of local legislative problems
will increase in 1987 and succeeding years.
Outlook
The outlook for Massachusetts is essentially for more of the
same: more pieces of legislation, more activity on each piece of
legislation, more grassroots activity, more direct lobbying, more
of everything that challenges the industry.
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MICHIGAN
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PREFACE
Michigan, in many regards, can be considered one of the more
liberal midwestern states. The state has a "value added tax" as
its major source of business taxation and several communities
have public "right-to-know" ordinances, requiring the
announcement by the press of ordinances to be introduced, the
scheduling of hearings and the final outcome of those ordinances.
The state's population is 9.3 million; its market share is 4.3
percent.
STATE OVERVIEW
Economic Condition and Outlook
Unemployment problems continue to dog the Michigan economy.
Although efforts to diversify from heavy manufacturing are
underway, the state's unemployment figures remain high. A large
state income tax increase in 1983 helped slow the need to raise
consumer product taxes; however, income loss from unemployment
works to offset the effects of income tax increases.
Political Situation
The Michigan Democratic Party continues to rule the political
roost. The two U.S. Senators, a majority of the congressional
delegation (11D-7R) and the Governor are all Democrats. The
House of Representatives (64D-46R) is under Democratic control.
Only the Senate (20R-18D) is held by the Republicans. Little
change is expected in the leadership of the House. In the Senate
the retirement of the president pro tempore may alter the
leadership structure.
Significant State Problems
Unemployment concerns, rekindled by the closing of four GM
plants, will remain one of the most significant issues for
Michigan. Product liability reform will again be of major
concern. Environmental issues are traditionally a high priority
for this state and will remain so in the coming year.
Michigan, page 2
Resources - Strengths and Weaknesses
Tobacco Segments
The M.T.C.D.V.A. has been extremely supportive in direct
lobbying, PAC activities and grassroots participation. Their
numbers, however, are limited. Member company interest and
support have increased greatly in the last two years. Our
activities, expecially with this latter group, will be increased
during 1987.
Business
In the pas,t, the support we have received from the Michigan
Chamber of Commerce has been excellent. During the latter half
of 1986 and continuing into 1987, the chamber has undertaken a
large-scale effort to involve businesses statewide in a voluntary
smoking policy program, designed to prevent passage of mandatory
legislation. Other traditional allies of our industry have also
been quite supportive on smoking restriction issues. However,
our efforts with the state restaurant association remain
unsuccessful. (The state has had a restaurant restriction law
since 1976; it was amended in 1986.)
Labor
Unions remain extremely powerful on the political front in
Michigan. We continue to maintain personal relationships with
many; however, few have been willing to lobby publicly on our
behalf._ We will continue to seek greater labor support in 1987.
ANTI-TOBACCO FORCES
The lung association in this state continues to be one of our
most powerful adversaries. It retains a full-time lobbyist and
expends almost unlimited resources on grassroots activities at
the state and local levels. In 1987 we also anticipate increased
activities by the state medical society.
TOBACCO INDUSTRY
Brief History of Successes and Problems
The Michigan General Assembly passed a Clean Indoor Air Act in
1986 (Public Act 198) which becomes effective January 1, 1987.
The law restricts smoking in public places and in government
workplaces.
In an effort to assist its members, other organizations, and
local governments, the Michigan Chamber of Commerce will mail, in
December 1986, a brochure listing suggestions for voluntary
smoking policies for businesses.
(
Michigan, page 3
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Because of uncertainty over the federal sunset, excise tax
increases were not considered seriously in 1986. Due to the
closing of four GM plants, however, this unemployment rate is
expected to increase in 1987. This decline in revenue may create
some interest in cigarette excise tax increases.
At the moment, the sampling issue is on the back burner. Michigan
lawmakers appear concerned about constitutional and enforcement
problems associated with such legislation. This concern stems
from a 1986 sampling hearing.
Major Issues - State and Local
Tort reform, including product liability bills, will continue to
be a major concern during 1987. We do not expect any new clean
indoor air bills; however, amendments to the present act could be
presented.
Sampling ban bills are not expected to prevail. Smokeless tobacco
efforts in the area of labeling and restrictions are expected.
We may also face O.T.P. tax bills.
Outlook
We do not expect 1987 to be as difficult a year as 1986. But we
must remember the legislature's penchant for anti-tobacco
measures. Additionally, state revenue funds are declining and
the unemployment rolls are increasing. We will follow all issues
very cautiously.
December 1986
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Few other states have produced more political leaders of national
stature and distinction than the state of Minnesota. Hubert
Humphrey, Harold Stassen, Walter Mondale, Warren Burger, Eugene
McCarthy, Orville Freeman and Justice Harry Blackmun provide the
patchwork of prominent American leaders hailing from the Gopher
State. Similar to Wisconsin in its ethnic heritage, Minnesota
was the far outpost in America's move westward. Railroads and
the giant grain mills of the Twin Cities provided the basis for
the development of Minnesota traditions as we know them today.
The state of Minnesota has a population of 4.1 million people and
a market share of 1.6 per cent. The governor's office and both
houses of the legislature are currently held by Democrats. The
political parties, the Democratic Farm Labor Party, or DFL, and
the Independent Republican Party, or IR, are still relatively
strong in this state.
Minnesota has been spared much of the "rustbelt" turmoil in that
it has concentrated its recent economic efforts in the so called
"high tech" industry. Honeywell, 3M and Sperry-Rand all enjoy
thriving businesses in Minnesota.
STATE OVERVIEW
Economic Conditions and Outlook
Minnesota is now emerging from a farm-intensive economy to a
high-tech metropolitan economy. Due to this phenomenon, a
perception of "metro vs out state" has become prevalent not only
in the media, but in the legislative arena as well.
The economy in metropolitan Minneapolis/St. Paul is robust.
However, the economy in other parts of Minnesota ranges from. poor
to destitute. In the area once known as "America's Iron Range,"
unemployment reaches the 60 per cent level. Silver Bay, a major
taconite/iron ore processing area, reports that nearly 90 percent
of its people receive some sort of public assistance, be it food
stamps, AFDC or the voluntary "food shelf" program, where foodis
charitably donated for the needy.
The outlook for Minnesota could be termed mixed. Out-state
counties face farm foreclosures and bank failures, while the
metropolitan Twin City area can expect continued low unemployment
and healthy business activity. This combination is a dangerous
contrast in that state legislators from the city and outlying
counties will ultimately be at odds over tax and revenue policy.
Minnesota, page 2
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Political Situation: Current and Outlook
In the November 1986 elections, Incumbent Democratic Governor
Rudy Perpich won an easy reelection over former Representative
Cal Ludeman by a margin of 57-43 percent.
The Republicans suffered a disastrous defeat in the Minnesota
House of Representatives, a house they controlled by a margin of
69-65 during the last legislative session. The Democrats now
hold an 83-51 majority over the Republicans. The DFL will
probably elect Representative Fred Norton (DFL-St. Paul) as the
new Speaker.
With regard to the State Senate, the DFL increased its majority
by four seats, giving it a 47-20 advantage.
The next session of the Minnesota legislature will be extremely
difficult for the tobacco industry in that with the increased
liberal Democratic majority, tobacco issues will take a higher
profile. In particular, we should expect legislation dealing
with advertising bans, sampling bans, expansion of the Clean
Indoor Air Act and even a tax proposal.
Significant State Problems
Minnesota faces what have become almost perennial budgetary and
economic problems:
0 Budget shortfalls; rural revenues are down, income
tax is down and projections have become overly
optimistic.
0
Iron, lumber and Great Lakes port operations are in
a serious economic slump.
Bank failures have become a major concern, with
three banks that failing in 1985. This is the
worst banking record since the 1930s..
RESOURCES: STRENGTHS AND WEAKNESSES
Tobacco Segments
From the agricultural level, the tobacco industry's profile in
Minnesota is small. With only four tobacco growing farms in the
state, the growers' segment can be considered insignificant.
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Minnesota, page 3
However, two major wholesaler groups dominate the Minnesota - -:'"
tobacco market. The first group, headed by Miami Dolphins' owner
Joe Robbie, controls 35 to 40 percent of the wholesaler market in
the state of Minnesota. This group, only moderately active on
general tobacco issues, can be termed rural in scope and
parochial in policy, concentrating mostly on minimum mark-up laws
and OTP taxes. The other group, headed by Jim Erickson, a
Minneapolis attorney, controls 60 percent of the market
statewide. Even though there appears to be, at times, an arm's
length relationship between the Minnesota wholesalers and The
Tobacco Institute, concentrated efforts are being continued to
ensure dooperation with these groups.
Business
With the onslaught of anti-tobacco efforts and the ten-year-old
Clean Indoor Air Act, the industry is pursuing a common ground
with private sector business in coalition and "business round
table" activities. Efforts are now being planned for a dialogue
between The Tobacco Institute and majorMinnesota industries in
the development of private sector smoking policies.
Labor
Minnesota's deep-rooted tradition in the labor movement is a
natural for exploration. However, the perceived decline of heavy
industry in Minnesota, including mining, railroads and milling,
created a situation unexpected by labor during the past decade.
Institute Resources
The most valuable resource provided by The Tobacco Institute in
Minnesota would be the securing of the best possible lobbyists to
represent our industry in the legislature and the continuing
support of TI to the wholesaler associations.
ANTI-TOBACCO FORCES
Minnesota, the Granddaddy of anti-tobacco activity, is one of the
most critical states in the country regarding anti-tobacco
activism.
The 1985,Minnesota Technical Advisory Committee on Nonsmoking and
Health report will be the guideline for anti-industry concerns
during the remainder of this decade. The published report,
weighing over two pounds, was a textbook example of a zealous and
focused effort to attack the tobacco industry on both the public
and private sector levels.
U. S. Surgeon General C. Everett Koop, in testimony before the
Minnesota legislature, contended that the Minnesota Technical
Advisory Committee report was quite possibly the most definitive
weapon to promote a "smoke-free society by the year 2000."
Minnesota, page 4
TOBACCO INDUSTRY
Success and Problems - History
The most active legislative effort experienced in this region to
date was the 1985 Minnesota legislative session. This session
highlighted the Technical Advisory Committee report as a
legislative agenda for the Minnesota Department of Health. Due
to active lobbying and cooperation among member company concerns,
the entire report, in the form of legislation, was rejected
during the legislative session.
However, due to an immediate call for a special session by
.Governor Perpich, literally on the heels of the regular session's
adjournment, small portions of that report were inserted as a
part of a five-cent cigarette tax increase.
The industry has experienced many successes in the past five
years in Minnesota: no tax increases from 1971 to 1985, defeat
of statewide sampling bans, defeat of segregated revenues for
fire and health-related items and defeat of modifications to the
present Clean Indoor Air Act.
Major Issues - State and Local
Confronting the industry in Minnesota, the following issues will
be considered in the near term:
Tax Increase. With budget shortfalls, a cigarette tax increase
is always a distinct danger.
Restrictions. The Minnesota Department of Health is presently
attempting to promulgate administrative rules regarding statewide
smoking policies and health issues.
Sampling Bans. Several legislators have indicated that they will
introduce a statewide sampling ban during the next legislative
session.
Advertising Restrictions. Several legislators have indicated
that they will introduce a statewide advertising ban during the
next legislative session.
Ventilation Standards. Ventilation standards are presently being
considered in Department of Health rule promulgation discussions.C
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OTP Tax Increase. Always a consideration when budget problems N
exist. w
Tobacco Manufacturer Liability. If neighboring Wisconsin is N
doing it, Minnesota cannot be far behind.
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Minnesota, page 5
Outlook
In the regular legislative session scheduled for this winter, the
tobacco industry will face another brisk legislative calendar.
It is essential that member company, wholesaler and coalition
forces maintain a good level of communication and cooperation in
our efforts to defeat anti-tobacco measures.
Our major problem areas reside in the determination of Health
Department rules and the problematic budget shortfalls.
-Unfortunately, these two areas, due to the existing political and
economic environment, will consistently become "an unwanted house
guest" at our industry's doorstep.
December 1986
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MISSISSIPPI
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PREFACE
Mississippi is primarily a rural state with agriculture, forestry
(17 million acres), tourism and manufacturing as the economic
mainstays. Commercial catfish is fast becoming a major industry
for this state. Commercial fishing in the gulf section should not
be overlooked as an economic asset. Production of quality wines
in the northern and southern sections of the state has brought
another dimension to agriculture.
Mississippi is among the top ten states in production of cotton,
rice, pecans, sorghum, sweet potatoes and soybeans. It ranks
fifth in the production of broilers.
Oil and gas exploration occurs throughout the state, with
Mississippi claiming one of the largest natural gas deposits in
the nation. It ranks ninth in the production of these fuels.
Coal and lignite deposits are common and offer promise for future
mining.
The state's market share is approximately one percent.
STATE OVERVIEW
Economic Condition and outlook
The 1986 legislature adjusted revenues to cover the state
budget's estimated shortfall. The economic growth for the state
is zero. State leaders cannot seem to bring in the kind of
business and industry necessary to make the economy begin a new
growth cycle.
Industry is depressed. Agriculture is in deep trouble except for
emerging catfish farming enterprises. On the bright side, the
Navy has recently supplied a multi-billion dollar ship building
contract to the shipyards in Pascagoula. This windfall is most
needed.
Political Situation
One new congressman was elected in Mississippi. Congressman Esby
(D-35) will replace Congressman Franklin. Indications are that
Esby is a reasonable and dependable individual.
There were no state elections this year. They will be held in
1987. Many of our friends may choose not to run again. There are
several underlying reasons:
Mississippi, page 2
a. The depressed economy places pressure on some of them to
spend more time in their personal businesses.
b. Others may have conflicts of interest if the ethics
law is held constitutional. -
c. Still others are becoming disillusioned because of
the fiscal conditions of the state.
There is a power struggle going on in the House, and the speaker
may be overthrown. If he is not, there will be at least one
change in the method of selection and operation of committees.
Significant State Problems
The most significant problem the state has to face is a lack of
money. State agencies have already been cut back. Programs have
been reduced. Most of the standard sources of taxation have been
hit, many of them very hard.
The state faces federally-mandated prison reform, loss of revenue
sharing and health care cost'containment. The outlook for
increased revenue is bleak. The tax base is so limited there are
no new sources of revenue.
RESOURCES: STRENGTHS AND WEAKNESSES
Tobacco Segments
Other than company employees, there is no large constituency of
tobacco supporters in Mississippi.
The wholesale grocers organization has been very supportive of
our efforts at the state and federal levels. We expect to
continue this relationship.
The wholesale tobacco distributors are a "strange and wonderful"
group. While they have no formal meetings, they collectively
retain counsel for legislative work. They will respond to our
requests for contacts, letters, or testimony when called on an
individual basis.
We have received some support from the Mississippi Association of
Convenience Stores and the Vending Association of the Gulf
States. However, we receive no real support from the retail
segment.
Business
TI is a member of the Mississippi Manufacturers Association. We
have not had the opportunity to develop the kind of personal
relationships which bring about support on legislative matters.
Efforts in this area will be increased in the future.
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Mississippi, page 3
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Labor
Over the years, our lobbyist has enjoyed a good relationship with
the union representative in Mississippi and has helped us garner
votes in the legislature. But, by and large, labor is not a
significant political force in Mississippi.
Fire Groups
The majority of the fire groups in Mississippi are volunteer
departments. They have never caused a problem for us. The
industry has never had problems at the local level. Therefore,
we have not requested the aid of the fire groups.
ANTI-TOBACCO FORCES
There are no strong anti-tobacco organizations in Mississippi.
The past speaker was not pro-tobacco, but he has been unable to
pass his health measures. The medical society also has been
unsuccessful in pushing its anti-tobacco agenda.
TOBACCO INDUSTRY
Brief History of Successes and Problems
The 1986 session saw a bill to restrict smoking introduced in the
Senate. The chairman of Senate House Ways and Means never
assigned it to a subcommittee.
The excise tax was last increased in 1985. Several bills to
raise cigarette taxes were introduced in 1986, but we managed to
side-step the problem, and all bills died.
Finally, a bill to remove the distributors discount was
introduced. Without our help, the wholesalers would have lost
their entire discount. Through counsels' efforts we were able to
rejuvenate the wholesaler grassroots program. The proposal was
unanimously defeated in the Senate. We feel that not only was
the effort a major legislative victory, but it proved the worth
of our lobbyists and wholesaler program.
Outlook
Next session we will see a bill introduced in the Senate to
restrict smoking. The chairman of Senate Health and Welfare
Committee, however, is not supportive of this measure.
As previously stated, the economic outlook for Mississippi is
bleak. The state, counties and cities will be short on revenue.
We will probably see another effort to increase cigarette taxes.
We believe we will have a good chance to defeat such legislation.
December 1986
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1rII SSOURI
PREFACE
Missouri is, in virtually every sense, a border state. From the
standpoints of culture, politics, climate, economy, and
geography, Missouri is a transition point from the nation's North
and South as well as its East and West. This fact makes the
"Show Me State" an interesting study in contrasts. The
population of Missouri is approximately five million. Its market
share is about 2.2 percent.
There are. several opposing economic and political forces in
Missouri that combine to make the state as unique socially as it
is geographically. These opposing forces make it difficult to
"pigeon-hole" as liberal or conservative, industrial or agrarian.
Despite this, or perhaps because of it, Missouri is a key state
in gauging political and social trends. Its geographical
position (it shares borders with seven other states) demands that
Missouri be given close attention by any group interested in a
national political strategy.
STATE OVERVIEW
Economic Condition And Outlook
Economic conditions vary considerably from one area of Missouri
to another. Urban areas are faring much better now than in
recent years, primarily because of a resurgence of industrial
activity. A prime example of this is the now re-activated
Chrysler assembly plant in St. Louis County. It was virtually
closed only a few years ago. The state's unemployment rate is
now well below the national average.
Missouri's large agricultural population, however, is in trouble.
As in many other Midwest states, farm foreclosures have risen
drastically. Low prices on agricultural products and a high cost
of doing business are problems that will continue to pose serious
threats to Missouri farmers.
There is little reason to expect that Missouri's economy will
improve markedly in the near future. A downturn in the national
economy could spell trouble for manufacturing in the state's
metropolitan areas and worsen the statewide picture
substantially.
Missouri, page 2
Political Situation
Missouri is a traditionally Democratic state. Its House and
Senate remain under Democratic control, but the state is part of
the nation's shift to conservatism. This change is illustrated
in the fact that all state officers except the lieutenant
governor are Republican. Lieutenant Governor Harriett Woods ran
unsuccessfully for the U.S. Senate in 1986, but has two more
years in her present term of office.
It is worthwhile to note that the number of registered.Republican
voters in the state has climbed considerably. The state
Republican party is well-financed, computer equipped, and
becoming more and more aggressive. As a consequence, 1986 was a
critical year for Missouri Democrats, and they did very well.
Despite a large number of serious challenges by Republican
candidates, Missouri Democrats still have post-election control
of the Senate (21 - 13) and House (111 - 52).
Significant State Problems
As with many other states, Missouri's major concerns are fiscally
related. While revenue collection was slightly improved in 1986,
no great growth occurred. This lack of economic growth,
accompanied by the loss of much federal revenue, has many state
officials very worried. Many see the state's tax base continuing
to decline. Missouri's population has become the nation's fourth
oldest which will surely present problems for the state's health
care system in the years ahead.
Progressive state legislators fear that a majority of their
colleagues will opt for a "band-aid" solution to the state's
anticipated fiscal difficulties, rather than taking a broader
approach and revamping the entire state tax structure.
Introduction of excise tax increase proposals should be
anticipated in the 1987 legislative session.
RESOURCES: STRENGTHS AND WEAKNESSES
Tobacco Segments
Missouri's "Tobacco Family" has proven to be surprisingly
cohesive and effective. The elements of this cadre are TI member
company personnel, tobacco farmers and warehousemen, tobacco
wholesale distributors, and vendors.
The most consistently responsive among these groups probably are
the state's member company personnel and tobacco farmers. These
two groups can always be expected to follow through with action
pe.rtaining to any tobacco-related concern.
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Ilissouri, page 3
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Wholesale distributors have become an increasingly dependable and
effective ally in the three years since their state association
(Missouri Association of Candy & Tobacco Distributors)
reorganized and hired full time staff. Member company personnel
and M.A.C.T.D. members also account for the greatest portion of
the Institute's "awareness system" in Missouri.
If there is a weak link in Missouri's chain of tobacco activists,
it would be the vending segment. This is true primarily because
the vendors' state association (M.A.M.A.) is a rather loose-knit,
inactive group. Nevertheless, many individual vendors in the
state are very dependable and aggressive activists.
Business
Missouri's two major business-related organizations, the State
Chamber of Commerce and Associated Industries of Missouri, while
perhaps supportive, are not active allies of the tobacco
industry. As a rule, the Chamber and A.I.M. legislative
platforms are in basic accord with TI positions, but neither
organization can be expected to take a public position on an
issue concerni?,g only tobacco. Despite this, individual officers
and staff members of both groups have frequently been helpful in
legislative tracking and "behind the scenes" lobbying.
The Institute has enjoyed cooperation on tobacco-related
legislation from many industries and trade associations. Among
these are the Missouri Restaurant Association, Missouri Retailers
Association, Missouri Hotel/Motel Association, the Seven-Up
Corporation, Seven-Eleven Stores, King Louie Corporation, and
many others. Experience has shown that the elements of a
coalition involved with a tobacco-related matter will vary with
the nature of the issue and the location concerned. For example,
the Missouri Restaurant Association is a tremendous ally against
smoking restriction legislation, but is not at all concerned over
proposals to increase cigarette taxes.
Labor
Many good personal relationships exist between TI and elements of
organized labor in Missouri. These relationships have
occasionally have been very helpful in fighting anti-tobacco
legislation. However, it is unlikely that labor in Missouri will
take many formal, public positions on tobacco-related issues.
The major reason for this is labor's sensitivity to the fact that
some of TI's member companies are not unionized.
Fire Groups
The Kansas City and St. Louis fire'departments and firefighter
associations have strong lobbies in the Missouri state
legislature, as firefighter salaries in these two cities are set
by the state legislature. As a result, firefighters have lobbied
legislators regularly through the years, and good relationships
have developed.
Missouri, page 4
the Institute's program of assistance to fire departments has
helped strengthen personal relationships with firefighter
lobbyists. It is probably unrealistic to expect Missouri
firefighters to become directly involved in issues such as
cigarette excise taxes or smoking restrictions. But firefighters
may be reluctant to become active proponents of any ill-conceived
"fire-safe" cigarette legislation.
ANTI-TOBACCO FORCES
While most of the traditional anti-tobacco groups have existed in
Missouri for several years, they have become active only in
recent months. With leadership from the American Lung
Association, anti-smokers gained enactment of a smoking
restriction ordinance in Kansas City this year -- Missouri's
first.
The "Coalition on Smoking or Health", headquartered in St. Louis,
is making a major effort this year to unify and coordinate the
efforts of the state's many anti-smoking groups. The coalition's
primasy goal is to secure passage of a statewide smoking control
law; but, failing in that, it will unquestionably seek to become
involved in pushes for local ordinances.
TOBACCO INDUSTRY
Brief History of Successes and Problems
Local smoking restriction legislation has not been a major
problem to this point in Missouri. Anti-smoking groups in four
cities (Columbia, Kansas City, Independence and Clayton) have
attempted passage of smoking control laws, but have been
successful only in Kansas City. .
There has been limited success in fighting excise taxes in
Missouri. The state legislature increased the state's cigarette
tax from 9 to 13-cents per pack in 1981. The legislature passed
another increase in 1985, contingent upon a federal tax
reduction. All other attempts to increase Missouri's cigarette
tax in the past five years have been unsuccessful.
Missouri municipalities have statutory authority to levy excise
taxes on cigarettes. In 1984, 118 cities in the state taxed
cigarettes, with rates ranging from 2 to 10-cents per pack. In
addition, Missouri counties of the first class (St. Louis,
Jackson, Clay and Greene) may levy cigarette taxes. Of these,
only St. Louis and Jackson counties levy a tax, both of which are
5-cents per pack.
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Missouri, page 5
Local tax increases have proven very difficult to stop. Advance
information on such measures is often difficult to obtain and
cigarette tax hikes usually enjoy good support from the
electorate. Happily, though, there are exceptions to this.
Successful campaigns against municipal taxes have been waged in
the last year in Smithville, Lathrop, Cameron, and Marceline.
Major'Issues -- State and Local
Fiscal concerns are foremost in the minds of state and local
legislators in Missouri. The Reagan administration's "New
Federalism" has placed an increasing burden on state and local
government to provide necessary services, while reducing
financial assistance from the Federal government. In 1987, the
State of Missouri and Missouri cities will face some serious
financial problems, which will result in consideration of a wide
variety of "tax packages." The tobacco industry undoubtedly will
be involved in these issues.
Outlook
Preventing passage of an increase in Missouri's cigarette tax
will be the most severe challenge. With neighboring Kansas and
Iowa having recently increased their taxing rates to 24-cents and
26-cents per pack, respectively, Missouri's 13-cent rate is
comparatively low. This makes introduction and passage of a tax
increase more likely than ever in 1987.
Cigarette tax increases in Missouri's counties of the first class
and municipalities also will be difficult to stop in 1987. St.
Louis County officials in 1986 sought statutory authorization to
increase their county's tax from 5 to 10-cents per pack. They
were unsuccessful, but will try again in 1987. In addition, many
cities can be expected to attempt increases in their cigarette
tax rate to help offset anticipated fiscal problems.
Continued success against "clean indoor air" legislation at the
state level is expected. The Institute's legislative counsel in
Missouri has been very adept in dealing with this threat in the
past; and anti-smoking groups do not yet show much sign of
strengthening as a lobby in the state capitol. On the other
hand, increased activity by anti-smoking activists at the local
level is quite likely, and could pose a more serious threat.
Efforts to pass smoking control laws should be expected in a
number of Missouri cities. Likely candidates are St. Louis,
Joplin, Columbia, and Springfield. Success against these
proposed ordinances will require constant monitoring by the
tobacco family and close cooperation with traditional allies and
coalition members.
December 1986
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MONTANA
PREFACE
Montana's "Big Sky" country is the stereotype of the ruggedly
individualist, frontier economy. Yet Montana is also a liberal,
forward-thinking state with a deep concern for human services.
The political pressures of these divergent political realities
make legislative forecasting somewhat inexact.
Montana's share of market is three-tenths of one per cent.
STATE OVERVIEW
Economic Condition and Outlook
The reduction of federal funding promises to wreak havoc with the
Montana state economy in the next few years. Montana legislators
have come to depend on federal revenue sharing funds more than in
most states. Historically an agricultural and mining economy,
Montana has been hurt seriously by significant reductions in work
forces in the mining industry. Entire communities are becoming
ghost towns because of no activity in copper mining.
In spite of these serious economic reversals in previous years,
the Montana legislature has continued to fund new state
construction programs, new human services programs and other
revenue-hungry programs as if there were never-ending sources of
dollars.
Political Overview
In state legislative races, 51 Republican House members were
elected and 49 Democrats were elected. Previously, the House was
tied at 50-50.
In the state Senate, 25 Republicans and 25 Democrats were
elected; therefore, the Senate President will be selected based
on the party of the Governor. As Governor Schwinden is a
Democrat, the Democrats will select the tie-breaking post of
Senate President. In the 1986 session, the Democrats held a
majority in that house by a margin of 28-22.
There was no race for governor in 1986. In Congressional races,
all incumbents were reelected.
Montana, page 2
Significant State Problems
Montana'a most significant problem is revenue shortfalls. Current
estimates put the state's revenue needs between $100 million and
$120 million.
RESOURCES: STRENGTHS AND WEAKNESSES
Tobacco Segments
Montana's wholesaler association (Montana Association of Tobacco
and Candy Distributors) has been quite helpful to us in the past.
Due to the state's size, distributors, as well as member company
personnel, are sparsely located, yet are able to make contact
with key legislators from their respective legislative districts.
The member company representatives are also willing to involve
their accounts, retailers, etc., in fighting tobacco restriction
measures.
Business
The Montana Retail Association has been moderately helpful to us
in the past, as has the Montana Restaurant Association. Both
organizations, though, are somewhat ambivalent to tobacco issues,
preferring to become involved only in those that appear to affect
them directly.
Montana's vendors were not mentioned in the discussion of tobacco
family because they are primarily food and music vendors. These
businesses, although few in number, have been quite helpful to us
in the past and would appear to be supportive of our efforts to
limit excise tax increases.
Labor
Organized labor is traditionally a significant political force in
Montana, largely due to its mining activities. However, because
of the decline of that industry, labor's influence at the Capitol
has waned. We have not been particularly successful in
recruiting labor on any of our tobacco issues in the past, but
such efforts will be a major priority during 1987-88.
ANTI-TOBACCO FORCES
.Montana does not have the traditional anti-tobacco forces at work
in the legislature, at least on the surface. Most anti-tobacco
legislation in past years has come from one or two specific
legislators with a particular interest in tobacco restriction
efforts. On occasion, the local Helena Lung Association does
make its presence known to the legislature, and similar groups in
Great Falls and Billings have contacted their local legislators.
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Montana, page 3
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TOBACCO INDUSTRY
Brief History
Montana's first piece of tobacco restriction legislation was
passed in 1979. At that time it was primarily a "sign ordinance"
that required posting of signs announcing to patrons the
availability of smoking or non-smoking areas. Since that time,
efforts have strengthened the law to the point where the language
now reads like a Clean Indoor Air Act.
The cigarette excise tax remained at 12 cents from 1971 through
the 1983 legislative session. In 1983 the legislature raised the
state tax by four cents. In 1985 the legislature passed a
contingency bill to increase the state tax by eight cents if the
federal government reduced its tax on October 1.
Outlook: Major Issues - State and Local
Montana's prime concerns for the coming year are funding of its
human services programs. Since the state did not receive the
additional eight-cent cigarette tax it expected after the 1985
legislative session, there will be a strong effort to increase
the cigarette tax to fund anticipated revenue shortfalls due to
federal revenue sharing fund cutbacks.
On the legislative front for 1987, a bill has been drafted to
raise the state cigarette tax by 10 cents. Senator Richard
Manning (D-Great Falls) is proposing this tax increase and will
introduce it when the legislature convenes.
On another matter, Initiative 30 (1-30) passed, changing the
Constitution by giving broad power to the legislature in dealing
with lawsuits. It is therefore likely that tort reform will be
an issue in the 1987 session.
Since statewide restriction laws essentially make local
legislation unnecessary, it is unlikely that there will be any
significant local legislative activity.
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NEBRASKA
PREFACE
The State of Nebraska, having the nation's only one-house
legislature, is a state of many contrasts. Ordinarily assumed to
be a conservative Republican state, Nebraska has had Democratic
governors for 16 of the last 24 years. However, in 1986,
Nebraska elected its first female governor, a Republican, who
defeated a female opponent.
To equate conservatism with Republicanism would be a mistake.
The conservatism of Nebraska's people stems from their
independent, individualistic lifestyles. Its current population
of 1.6 million has remained relatively constant since 1890. The
market share in Nebraska is just over 0.6 percent.
Nebraska's economy relies heavily on corn, livestock production
(primarily pork), and the insurance business. The people of
Nebraska have, for the better part of this century, provided our
nation's eastern populace with an ample supply of grain and
meats.
To fully understand Nebraska's traditions and people, one must
analyze its history back to the "boom days" of the 1880s and to
the "bust days" of the 1890s. The 1880s were a decade of ample
rain and general prosperity for the new settlers of Nebraska.
However, the 1890s were a time of severe hardship due to the
droughts and absence of an organized farm cooperative system.
The famous orator and presidential candidate William Jennings
Bryan emerged prominently as a result of this condition. Bryan
was only 36 years old when he first won the Democratic nomination
for President of the United States.
Almost as a symptom of midwestern political thought, the
progressive movement, as in Minnesota, Wisconsin and North
Dakota, sprung to the forefront of Nebraska politics during the
1930s. Congressman, and later Senator, George Norris, led the
progressive era in Nebraska, championing the Norris-Laguardia Act
which was the first pro-union legislation in the United States.
Additionally, Senator Norris promoted the controversial Tennessee
Valley Authority. It is not surprising that during this period
Nebraska, with its progressive fervor, decided to abolish one of
its legislative houses to become the country's only Unicameral
Legislature.
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Nebraska, page 2
STATE OVERVIEW
Economic Conditions and outlook
Nebraska's economic condition, in a slightly sardonic sense,
could be termed "typically midwestern." Its farm economy, with
its back to the wall, has placed severe strains on that state's
financial institution system. Already chronicled in the CBS
network television show "60 Minutes," Nebraska's savings and loan
system is an example of poor management, poor judgement and poor
administration.
Nebraska's economic condition, in the Omaha area, is considerably
better. Bolstered by active insurance, railroad and agribusiness
industries, a first impression of Omaha would be as a city on the
move rather than in decline. However, as in any city vs. country
situation, Omaha is still dependent on the economic health of the
entire state.
Due to the depressed farm economy, Nebraska faces the specter of
annual budget shortfalls. These budget shortfalls required a
major modification of the state's income tax in 1985, as well as
an increase in the cigarette tax. The outlook for the near term
is pessimistic; the farm economy could not be any worse, the
banking community is under siege and the people will not stand
for any new tax increases.
Additionally, the special session in November placed emphasis on
the'farm credit crisis. This issue will remain in the forefront
during the 1987 legislative session.
Political Situation: Current and Outlook
The 1986 Nebraska Unicameral session adjourned in April.
However, that legislative body went into special session in
November to discuss issues specific to homestead exemptions,
agricultural liens and other farm issues focusing on federal law
mandate deadlines.
Republican gubernatorial candidate Kay Orr won election by 30,000
votes, runriing up a majority of 53-47 percent over Helen Boosalis
of Lincoln. Orr's election, in a comparative degree, is good
news for the tobacco industry.
With regard to the legislative elections several surprises
emerged. Former caucus leader John DeCamp was defeated, recently
indicted Senator James Pappas won reelection, while incumbent
Senator Tom Vickers was defeated.
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All state constitutional offices are now Republican, while all
members of the Nebraska Congressional delegation were reelected.
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Nebraska, page 3
Significant State Problems
Nebraska faces some major problems in the last years of the
1980s:
o Chronic budget shortfalls due to a depressed
economic situation, hampering the collection
of revenues.
o Potentially explosive banking occurrences,
spelling collapse, and near collapse, of many
of the state's existing banks.
o A politicized and highly-charged environment.
The departure of Governor Kerry adds
instability to a state in search of long-term
solutions to severe economic problems.
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RESOURCES: STRENGTHS AND WEAKNESSES
segments of the industry.
Tobacco Segments
There is no tobacco farming in the state of Nebraska, therefore,
Nebraska's tobacco presence rests with the wholesale and retail
Nebraska's wholesalers have been generally helpful in dealing
with anti-tobacco legislation during the past year. It is
becoming exceedingly clear, however, that the industry's
relationship with wholesaling groups can become strained due to
the existence of protective minimum mark-up laws in many states
and Nebraska is no exception. Legislators around the country
have cleverly noted that the "soft underbelly" of the industry's
grassroots presence lies with the wholesalers' dependence on the
minimum mark-up law. With this knowledge, it is becoming very
common to see the introduction of excise tax increases while
dangling the abolition of minimum mark-up laws, or the reduction
of discount rates. It is within this context that industry
lobbyists must walk gingerly through the "minefield" and appeal
directly to the wholesalers' interdependence with the tobacco
industry as a whole.
Business
The Nebraska business community, particularly the Omaha and
Lincoln chambers of commerce, have been very helpful in our
efforts to defeat anti-industry legislation. However, private
anti-smoking groups have emerged in the offices of major Nebraska
industries attempting to regulate smoking in the private
workplace.
Nebraska, page 4
Labor
Labor, as a major force, is not pronounced in the State of
Nebraska. With the exception of the Omaha area, labor's grasp on
the state as a whole, is minimal.
Institute Resources
The most valuable resource that TI can provide in order to
maintain or strengthen our efforts in Nebraska, is the adequate
funding of the best lobbyist possible, assisting the Nebraska
wholesalers' organization and the continuation of the corporate
campaign contribution program.
ANTI-TOBACCO FORCES
For four legislative sessions, a clean indoor air bill has been
introduced in the Nebraska Unicameral. Although failing on each
of these legislative attempts, anti-tobacco forces in Nebraska
have stated their goal to revise the state's broad, but
unenforced 1979 Clean Indoor Air Act next year.
The most zealous anti-tobacco activist in the legislature is
Senator Shirley Marsh of Omaha. Senator Marsh has consistently
pushed for a strict workplace smoking bill and has, at every
turn, urged punitive legislative policy against the industry.
TOBACCO INDUSTRY
Success and Problems - History
The cliche "close but no cigar" applies to the most recent
legislative history in the state of Nebraska. It is important to
note that due to the legislative rules and the nature of a
Unicameral legislature, a bill is not dead until the legislature
adjourns sine die.
Nebraska's legislative rules present the following train of
events: introduction, committee action, first reading (General
File), second reading (Select File), third reading (Final
Reading), messaging to the Governor, veto or enactment and veto
override. The most unnerving aspect of this system is that
legislation can be reconsidered by a simple majority vote at any
step before Final Reading.
Major Issues - State and Local
The following issues will be in the forefront of consideration
during 1987:
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Clean Indoor Air Act. Proponents have already announced their
intention to promote more restrictive legislation during 1987.
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Tax Increase. Although hit with a 5-cent tax increase in 1985,
Nebraska's farm crisis and economic situation spells more
trouble.
OTP Tax. The legislature might feel that since it recently hit
cigarettes, a look toward other tobacco products as another
revenue source is appropriate.
Outlook
It could be assumed that the first bill to be considered having
an impact on the industry would be a smoking restriction bill.
Depending on revenue projections, tax bills may not be far
behind.
December 1986
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NEVADA
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PREFACE
Nevada, which has a four-tenth of one percent share of the
market, is California's smaller cousin. It is divided from
California by the Sierra Mountains in the north and the Mojave
Desert in the south. California residents are the largest
utilizers of Nevada's major industry -- tourism and gambling.
Nevada is affected sometimes quite deeply by what happens in
California. But because of its geographic location and
relatively small permanent population, Nevada is isolated from
other neighboring states. Nevada is not a wealthy state. It has
meager natural resources and its geography is basically mountains
and desert.
STATE OVERVIEW
Economic Condition and Outlook
While Nevada's major industry, tourism and gambling, is generally
thought to be recession-proof, Nevada has nonetheless felt the
impact of competition for the gamblers dollars from Atlantic
City, cruiseship gambling, state lotteries, etc. As a result,
the economy is not as healthy as it once was. On the plus side,
Nevada has a small but growing industrial base composed primarily
of small manufacturers and commodity distribution businesses.
These business leaders are taking advantage of cheap land, low
living costs and the income tax-free environment Nevada offers.
Reno is barely four hours by Interstate highway from all the
major population centers in Northern California, and Las Vegas is
not a great deal farther from Los Angeles, Orange County and San
Diego. Thus, Nevada's two major population centers, containing
about 80 percent of its citizenry, are healthy and vigorous and
can expect to continue to enjoy prosperity so long as California
remains healthy.
Nevada, because it has so much desert wasteland, is one of the
target states for repository of high level toxic waste. Many in
the state view this as very attractive since it would create a
whole new industry in the state and bring in perhaps hundreds of
millions of dollars in new state income.
Political Situation
Governor Bill Bryan handily won re-election in 1986 - largely
because Republicans were unable to field a good opposing
candidate. Bryan is thought by many to have ambitions for the
U.S. Senate in 1988 when incumbent Senator Chic Hecht will stand
for re-election. The election of a Democratic Lt. Governor, Bob
Miller, to replace Republican Lt. Governor Bob Cashell can only
encourage such ambition.
Nevada, page 2
The Nevada Legislature saw a major flip-flop in 1986 elections.
A one-term Republican majority in the 42-member Assembly reverted
to a safely Democratic majority with 15 new Democratic
assemblyman against one new Republican. This represents a 40%
change in names and faces in this body. Assemblyman Joe Dini is
expected to be elected Speaker.
The Senate's Democratic majority similarly flip-flopped to a 12-9
Republican majority.
Senator Bill Raggio is expected to be elected Majority Leader,
the top power post in the Nevada Senate.
It is difficult to assess the impact of these changes at this
point. However, since 12 of the new Democrats in the Assembly
are from Clark County (Las Vegas) it is possible to guess that
there will be a more liberal tilt to this body. The Senate,
always conservative, will continue to be so.
Significant State Issues
o Health care cost containment.
o Tort reform/Insurance regulation.
o High level nuclear wastes.
o Money will be tight but manageable. New leadership
is known to oppose additional taxation.
o Lake Tahoe land development.
o Education funding.
RESOURCES: STRENGTHS/WEAKNESSES
Tobacco Segments
Virtually non-existent in
few representatives within
wholesalers and the major
operations.
Business
this state. Member companies maintain
the state. There are only a few
ones are branches of California based
Gaming and distribution centers are still the major businesses in .
Nevada. Gaming is with us on smoking restriction measures but
takes an "it's them or us" attitude on taxation.
Labor
Is a significant factor in Nevada, particularly the gaming,
hotel, and restaurant employees unions. While untried on tobacco
issues, we believe some support will be available if needed.
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ANTI-TOBACCO FORCES
They are only recently coming into evidence in the state. The
Reno Chapter of ALA seems to be the major one. Their activity to
this point has been in developing news stories aimed at
eventually causing smoking restrictions legislation. A few
legislators are known to harbor anti-smoking feelings but to this
point their efforts have been quietly contained.
TOBACCO INDUSTRY
Brief History of Successes and Problems
Our major losses in this state have been in the tax area. The
state's tax system and the attitude that tourists pay most of
such taxes make excises continually vulnerable.
Smoking restriction measures will probably be a problem in 1987.
At least one member has indicated that he will introduce a
restriction bill for grocery stores at the request of his
constituents.
Outlook
We can expect to be challenged, but the Nevada legislature does
not generally put up with attempts at frivolous legislative
initiatives. The new members of the legislature are mostly
unknown quantities and as such are unpredictable. Call Nevada
questionable for 1987.
December 1986
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NEW HAMPSHIRE
PREFACE
Like many other New England states, New Hampshire is really two
states. The northern half above Manchester still retains the
flavor, attitude, and appearance that the nation has come to
expect from the site of the "first in the nation" presidential
primaries every four years.
The southern counties, on the other hand, have been described as
simple adjuncts to their southern neighbor Massachusetts. These
three southern counties have experienced phenomenal growth in the
last ten years. The influx of large numbers of Massachusettsites
and other transplants has been a challenge for New Hampshire in
recent years. These newcomers are generally more educated, more
politically and socially active, and more liberal than the
indigenous population. They expect more from government, and
they are willing to pay for more. The conflict between newcomers
and the long-term population can be evidenced not only on the "op
ed" pages of the various newspapers, but also in legislation
enacted and.in initiative/petition efforts.
An example of the complex forces at work was the voter response
to two separate initiatives which appeared on the November 1985
ballot. In the first instance, the voters were asked to.
determine whether the legislature should have annual sessions or
continue meeting once every two years for 60 legislative days.
By a narrow margin, the people voted in support of annual
sessions.
On the other hand, the voters were asked to determine if there
should be a reduction in size of the.New Hampshire legislature.
In this instance the voters chose to reject the concept of a
smaller, "more efficient" legislative body. While clearly
different questions, the underlying issue -- "progress" -- is the
same. It is the question of full-time, professional legislators
versus part-time, citizen legislators.
Not surprisingly, a full-time, professional legislature concept
is supported primarily by those recent arrivals to the state.
The slower, part-time body is supported by the long-term
residents. These two votes may be somewhat symbolic of the
dynamics at work within the state, both in the public and private
sectors. They are dynamics that are likely to both help and harm
our fortunes in 1987.
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New Hampshire, page 2
There are approximately 1.2 million people in New Hampshire. It
has a 0.7 percent market share and a 17-cent per pack excise tax
on cigarett'es. No sales tax exists in the state. Taxes are
collected on approximately 197 million packs of cigarettes,
producing state revenues of approximately $34 million in fiscal
year 1985. This represents a decline of 12 million packs and a
decline of $800,000 in state revenue since 1984.
STATE OVERVIEW
Economic Condition
Most people tend to agree that the state has a reasonably large
surplus. The question is, "How large?" And, the effects of
federal tax reform and "budget reconciliation" are yet to be
determined. .
The private sector economy, particularly in the southern tier,
continues to grow rapidly. The favorable tax laws in New
Hampshire make the state'most accommodating for both large'and
small businesses. The lack of both state income and statewide
sale's taxes makes residence in the state particularly attractive
to employees. Historically, the state's largest business has
been the hospitality industry. Recently, the manufacturing of
durable and consumer goods has replaced the hospitality industry
as the number one employer and revenue producer for the state.
The reliance of the state on special excise taxes for the bulk of
its operating revenue is poor economic planning. These taxes are
not only regressive,.but also rely on the whim of consumer
spending. The state's stand on income and sales taxes has made
it a shining example to national conservatives. However, there
is a general-consensus that-at some point, if a more realistic
taxing policy is not developed, the entire "house of cards" will
come crashing down. -
Political Situation
An analysis of the political situation in New Hampshire depends
on your point of view. It is generally accepted that Governor
Sununu has developed a good administrative program for running
the state. The voters confirmed this by returning the governor
for another term. The only blemish on the campaign was the
Seabrook nuclear power plant issue. It did syphon votes away
from Sununu.
However, at the legislative level, in contrast to the apparent
calm of the Chief Executive's Office, there is apparent disarray.
The political parties have little or no clout and less control of
their members. They are poorly financed, understaffed, and have
no substantial campaign funds to ensure the loyalty of party
members. In the 400-member legislature, there are no strong
political leaders, and the elected leadership that does exist
very much serves at the sufferance of the body.
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New Hampshire, page 3 .
An example of the near anarchy in the legislature is the case of
anti-tobacco activist Sen. Johnson. In 1983 Sen.= Johnson was
defeated for the Republican nomination for his Senate seat.
Since the Democrats had no credible candidate in the district,
Sen. Johnson decided to run as a Democrat. In order to do that,
he needed the permission of the Democratic party. That
permission was granted on the condition that Sen. Johnson
register as a Democrat and remain a Democrat throughout his term
in office. Sen. Johnson agreed to those terms, ran a successful
campaign, and was elected to the New Hampshire State Senate,
whereupon he immediately re-registered as Republican. This is
somewhat indicative of the disdain individual members have for
party and legislative leadership control.
In order to win the Senate presidency, Sen. William Bartlett
forged a coalition of.Republicans and Democrats. The reward was
six committee chairmanships for Democrats. This may consolidate
control, but it also diminishes true power.
An added pressure on the political condition of the state is the
rapidly approaching "first in the nation" presidential primary.
The attention that is normally focused on this event is likely to
be heightened by the entry of Massachusetts Governor Michael
Dukakis into the fray. He is likely to make nuclear and other
environmental issues a part of the campaign rhetoric. This could
spill over and do tobacco interests no good.
Significant State Problems
One of the major concerns is unrestricted resort and business
growth. That general concern spawns a variety of environmental
concerns with which the legislature must deal.
One of the main, but little recognized, concerns that must be
faced in the next year is the condition of Public Service of New
Hampshire. The state's only electric utility is in serious
jeopardy of going into bankruptcy. The funds being drained off
by the construction of the nuclear power facility at Seabrook,
combined with some untimely conversions to coal-generated
electric plants, have resulted in enormous pressures on the
utility. The fortunes of private corporations, and, indeed, the
entire state, are at stake. In this area the Commonwealth of
Massachusetts and its presidential aspirant, Governor Dukakis,
are active players. In a move to assure himself coverage in New
Hampshire's "first in the nation" primary, Dukakis has refused to
certify the emergency evacuation plans for Seabrook, further
delaying the opening.
New Hampshire, page 4
RESOURCES
Tobacco Segments
The tobacco industry in New Hampshire is extremely small. There
are fewer than 50 manufacturer sales representatives, only eight
wholesalers, and a very small vending industry. The largest
single tobacco-related ally is the New Hampshire Retail Grocers
Association. Traditionally, the New Hampshire Retail Grocers
Association has provided the industry with outstanding support.
That support should continue. The recent tendency of the tobacco
industry at the wholesale level to contract-out has a marked
impact on states like New Hampshire, where one or two in-state
and one or two out-of-state wholesalers might end up dominating
the market.
Business
For many years the business community in New Hampshire enjoyed a
certain level of security. The extremely conservative Thompson
Administration and the desire of Democratic Governor Gallen to
avoid the appearance of being a liberal Democrat resulted in
extremely secure legislative conditions for the general business
community.
Unfortunately, the result was a growing lethargy and lack of
involvement in the legislative process. In fact, for almost 18
months the Busiriess and Industry Association of New Hampshire--an
amalgamation of the Southern New Hampshire Business and Industry
Association and the old New Hampshire State Chamber of Commerce--
was without an executive director. That condition is mirrored by
the New Hampshire Hospitality Association, which has been without
a full-time executive director since the retirement of Hal Thomas
in 1983. _
Part of the reason for this, like the BIA situation, is an
actively involved board of directors. There are those within
each organization who argue that since the members of the
organization are so actively involved in its legislative concerns
and day-to-day operations, there is no need for expansion of the
full-time staff. Many share the opinion that the decision has-
more to do with an unrealistic impression that "they (the
legislature) can't do anything to us (the business community)"
and a certain degree of Yankee cheapness. They, frankly, aren't
willing to pay for the type of legislative representation they
require. With regard to tobacco issues, the business community
tends to be a very reluctant ally. It views tobacco issues as
"no-win" situations.
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New Hampshire, page 5
Labor
The largest labor organization is the New Hampshire State
Employees Association. From time to time the New Hampshire State
Employees Association has been supportive. But, it is usually
bogged down in its own running battles with the legislature,
which is usually trying to avoid paying its most recent pay
increase. For the most part, organized labor (AFL-CIO) is not a
significant force in New Hampshire.
Institute Resources
We have been able to defend successfully against the anti-tobacco
activists by utilizing the resources and manpower of our friends
and allies, especially in the hospitality and retail grocery
industries. In 1986 we were successful in bringing the Business
and Industry Association into the battle on our side.
However, as our legislative needs increase in New Hampshire, it
is likely that we will have to continually review the need for
additional legislative help and the help of other consulting
services, such as public relations. As in all of New England,
one of our biggest assets in the state is our legislative team.
Their access to both sides of the aisle in both houses and to
both ends of the political spectrum has made our overall program
the success that it is.
ANTI-TOBACCO FORCES
Anti-tobacco organizations in New Hampshire have become better
organized. However, they are less organized than elsewhere in
New England. In recent years, they have come together under the
popular title of Coalition on Smoking OR Health. That coalition
has now learned how to work together toward a single legislative
objective. .
The prime mover against the tobacco industry in the state is the
New Hampshire branch of the American Lung Association. That
particular group is among the most active lung associations in
New England. The association has also broken from its regional
and national counterparts in that it no longer approaches
business in a simple, adversary context on the smoking issue.
The lung association has begun to attempt to develop voluntary
programs within the restaurant and business communities. Part of
their goal is to get on the inside of the major business
organizations and stay there long enough to erode our credibility Gb
and our efforts. To date the assocition has not been successful. ~
However, that effort has made it much more difficult for us to ~
make the major business organizations move decisively in our ~
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New Hampshire, page 6
TOBACCO INDUSTRY
Brief History
A review of the industry's efforts reveals an extremely
successful record. Since 1977 five pieces of tobacco legislation
have been enacted in New Hampshire. The first two, in in 1977
and 1981, dealt with smoking in public places. The third was the
passage of a 5-cent tobacco tax increase in 1983. The most
recent were bills prohibiting smoking in large grocery stores and
requiring smoking policies in places of work.
Undoubtedly, one of the key problems we face in New Hampshire is
the recognition that, on a.tax level, New Hampshire is the
keystone of the New England states. As the lowest tax state in
the region, an increase in any of the New Hampshire taxes,
including tobacco, usually results in an increase in taxes in the
other states. This makes New Hampshire extremely vulnerable to
both internal and external pressures, as we saw in 1985 on the
federal sunset tax activity.
Major Issues--State and Local
The major issue of concern in 1987 and beyond is the workplace
issue. The lung association and certain legislators have-
targeted this issue as one of their key legislative concerns for
the next session. In the future, the "youth" issue will become a
major concern. In 1985 and 1986 we witnessed efforts to prohibit
all sales of cigarettes in vending machines-and to impose
stringent fines on retail grocers who sell products to minors.
These will return in 1987. Finally, the smokeless tobacco
controversy is likely to draw us into areas, like sampling, that
we would prefer to avoid. _
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As in Maine and Vermont, the tobacco issue has not yet reached
the local level. When it does, we are likely to see, as the
nuclear activists attempted three years ago, a restriction
question on the town meeting warrant in every town across the
state -- all on one day. If that occurs, the issue will have to
be approached from a statewide referendum perspective, as opposed
to a simple, local situation.
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Outlook Q
Undoubtedly, 1987 will be a most difficult year for the tobacco
industry. The level of negative tobacco media activity in the
New England region has created a general impression among the
population at large and the legislators that there is a completed
case against environmental tobacco smoke. That means we are
walking into any legislative hearing two, and in some cases
three, strikes down. It makes the industry's perspective a
difficult "sell" at best.
New Hampshire, page 7
To this overwhelmingly negative press is added the influx of
liberal southern New Englanders. These people are a ready-made
anti-tobacco grassroots organization. The next two years may in
fact be benchmark years on the tobacco issues. Attempts to
expand the workplace statute, combined with sampling,
advertising, and vending sales bans, will provide a focus for
anti-tobacco forces during that time.
December 1986
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NEW JERSEY
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New Jersey is, in every sense of the word, a stepchild state. The
Garden State is a suburban bedroom community of New York City on
its northern border and Philadelphia on its southern border. A
large number of New Jersey residents commute to these
metropolitan areas to earn their livelihoods. Recently, however,
a large number of corporations have abandoned New York City and
have developed new corporate headquarters in northern and central
New Jersey.
The New Jersey economy is fueled by essentially white-collar
workers, although blue-collar industries are prominent in the
northern part of the state. The state also enjoys a bright
economic condition with unemployment below the national average.
Beyond a 70-mile radius of New York State, New Jersey is rural,
with agriculture the predominant industry, particularly in the
southern part of the state.
The state capital, Trenton, is located in central New Jersey,
which enables lawmakers to travel to the capitol quickly. As a
commuter legislature, the legislative session is year-round and
lawmakers, although they may not be in session, continue to hold
committee meetings either in Trenton or in various parts of the
state. This means the state is constantly besieged by
legislative activity.
STATE OVERVIEW
Economic Condition and Outlook
The state economy is now in its best condition in recent history.
Although much of the land area has lost its agricultural role,
the continuing increase in population and the ensuing housing
boom has put state revenues at an unprecedented surplus level.
New Jersey is a bedroom community of New York City and
Philadelphia. A large percentage of the work force commutes
daily, but lives and plays in the Garden State. New Jersey's
white-collar work force is well educated and enjoys a standard of
living well above the national average. The once-prosperous
agricultural population is dwindling rapidly as land values shoot
through the ceiling. Corporations are relocating from New York
City and opening up plush corporate parks in lush green settings.
There is good reason to believe that New Jersey's economy will
continue to be prosperous. Only a national economic slump would
change this forecast.
New Jersey, page 2
Political Situation
Although traditionally thought of as a Democratic blue-collar
state, since 1981 voters have stampeded to the Republican party.
The state is one of the few that conduct odd-year elections.
With Governor Kean running at the top of the ticket, Republicans
enjoyed a sweeping victory in 1985 by winning control of the New
Jersey Assembly for the first time in 14 years. In 1981 Governor
Kean was elected by a slim 1,700 vote margin and inherited a
Democratically controlled legislature. Now, however, Republicans
have control of the Assembly and enjoy a 50-30 margin.
Senate elections are held every four years; Assembly members
serve two-year terms. The Democrats still maintain control of
the Senate by a 23-17 margin, but based on the past sweeping
victories of the Republican party, Senate Democrats will be
focusing much more closely on their reelection prospects in 1987.
Because Governor Kean enjoys such popularity, because of the
bright economic condition, and because of the changing nature of
the political party alignment, the once-influential Democratic
party machinery is crumbling in the face of Republican
prosperity.
The battle for control of the 203rd New Jersey Legislature, which
will be settled on November 3, 1987, is now underway. The
Republicans are looking to pick up the four seats necessary to
gain control of the 40-member Senate. The Democrats are seeking
to win back the 11 seats they need to regain control of the
80-member Assembly. Governor Kean cannot seek reelection.
With Republicans controlling both Chambers, Kean has an
opportunity in his final two years in office to do many of the
things he has been unable to do during his first six, as well as
pursue any national elective office.
Significant State Problems
The State of New Jersey, and particularly the legislature, will
face significant problems addressed by other states in the recent
past. These problems come full circle to New Jersey as the media
paints a picture of nonactivity by the legislature when comparing
the state's activity to the surrounding state's legislative
efforts.
These issues include liability insurance questions (particularly ~
medical malpractice), toxic waste disposal/clean up programs,
infrastructure rebuilding, and automobile insurance rate 4-V
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questions.
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Although not problems at the present time, several issues may =b
surface in this final year of the two-year session. They may
include amendments to the recently-adopted smoking restriction
laws, the issue of fire safety, advertising restrictions and
smokeless purchase age restrictions.
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RESOURCES: STRENGTHS AND WEAKNESSES
Tobacco Segments
Tobacco is not grown in New Jersey and other segments of the
industry are only a small part of the business community. The
other segments consist of manufacturers and their subsidiaries,
distributors and retailers. By their numbers they could be
considered insignificant players in the economy of New Jersey.
The Tobacco Distributors Association of New Jersey is a diverse
group, with internal "dog-eat-dog" problems. Despite internal
problems, the association has been responsive to requests to
mobilize its membership as well as its customers. The executive
director, as a former member of the Assembly, has kept the
organization in the forefront through actions and contributions
to assist in impacting the legislature. The association also
continues its political campaign contribution program to support
effectively members of the legislature who are receptive to the
industry's concerns.
The Tobacco Action Network (TAN) in New Jersey has 451 activists.
These activists have been particularly responsive to local
legislative activities in their legislative support efforts.
This past year our TAN activists were not mobilized as the
legislature adopted 6 restriction bills in 1985.
Business
There are two primary business organizations in the state.
Generally, the New Jersey Business and Industry Association and
the New Jersey Chamber of Commerce have been responsive to
industry requests to assist with adverse legislation. Several
member companies have been members of these organizations in the
past and have been helpful.
However, particular problems arose in 1985 regarding the adoption
of smoking restriction legislation. The New Jersey Business and
Industry Association endorsed workplace restriction legislation.
Efforts have been ongoing to work.with these organizations and it
is perceived that they will continue to oppose any additional
restrictions regarding smoking in the workplace. Also, these
organizations have been in the forefront of efforts to promote
voluntary workplace programs.
Labor
New Jersey's labor groups have traditionally remained neutral on
smoking restriction issues. An exception is AFSCME, represented
by James Hedden, a former TI employee. Because union membership
is on the decline and they are concerned with other labor related
issues, it is not expected that unions will become extremely
active on issues of concern to the industry.
