State and Local Strategies of the Tobacco Industry
A STATE TAX PLAN TEXAS
Abstract
Discusses plans to prevent increases in excise taxes in Texas. Includes the following sections: 1) Political and Legislative Situation, containing legislative outlook for 1984, legislative process information, support groups including Tobacco Action Network, Retailers and Retailer Organizations, Tobacco Institute, Industry Members and Subsidiaries, Allied Industries, and Business Associations, and a historical background of cigarette taxes in California; 2) Position Papers on a Cigarette Tax Increase in California, containing reasons for opposing cigarette taxes, a "one page fact sheet for legislators," and discussion of economic impact of cigarette tax increases; 3) Legislative Strategy.
Fields
- Named Organization
- ADVISORY COMM ON INTERGOVERNMENTAL REL
- BATF, BUREAU OF ALCOHOL,TOBACCO AND FIREARMS
- BERRY CIGAR + CANDY
- BROOKINGS INST
- BUREAU OF THE CENSUS
- CBS
- CHAIN DRUG REVIEW
- CHAMBER OF COMMERCE
- CIGARETTE SERVICE
- CITIZENS CAMPAIGN AGAINST BOOTLEG CIGA
- CONGRESS
- CONVENIENCE STORE NEWS
- LEES WHOLESALE CANDY
- MAVERICK MARKETS
- MCCARTY HULL
- NATL CENTER FOR HEALTH STATISTICS
- NY STATE COMM OF INVESTIGATION
- NY STATE DEPT OF TAXATION + FINANCE
- P H S TOBACCO
- PONCA WHOLESALE
- SENATE
- SIGMAR
- STANDARD CIGARETTE
- SUPERMARKET BUSINESS
- Tobacco Advisory Council (TAC) (International industry advisory council)
Tobacco Advisory Council- TAN, TOBACCO ACTION NETWORK
- THE PIPE PUB
- TI RESEARCH DEPT
- TI STATE ACTIVITIES POLICY COMM
- TI, TOBACCO INST
- TREAS, DEPT OF THE TREASURY
- TTC, TOBACCO TAX COUNCIL
- TX ASSEMBLY
- TX HOUSE
- TX HOUSE WAYS + MEANS COMM
- TX LEGISLATURE
- TX MFG ASSN
- TX SELECT COMM ON PUBLIC EDUCATION
- TX SENATE
- TX SENATE FINANCE COMM
- TX TAX DEPT
- US DEPT OF COMMERCE
- BATF, BUREAU OF ALCOHOL,TOBACCO AND FIREARMS
- Author
- ACHILLES,J
- ADCOCK,K
- BENNETT,W
- CAREY,H
- CASTROM,A JR
- CURRAN,PJ
- DONATI,A JR
- ELMENDORF,R
- FRAKES,T
- JAGGARD,M
- JONES,G
- KELLY,P
- KEMP,J
- KIRK,E
- LOTT,T
- MCCARTY,W
- MELINSKY,M
- ROCKEFELLER,N
- SCHLUETER,S
- SNELSON,C
- SOHN,A
- TI, TOBACCO INST
- TULLY,JH
- White, M (Korea)
1994- Wilson, M. (Mgr. Engineering, Planning & Admin, B&W RD& E, 1987)
M. Wilson was Manager of Engineering Planning & Administration for B&W in the RD&E Department in 1987. (Source: B&W's Initial Disclosure, State of Texas vs. ATC, et al., 6/5/96) - ADCOCK,K
- Region
- New York
- TEXAS
- Subject
- Cigarettes
- economics
- Industry Strategies
- legislation
- Politics
- Smuggling
- State Level
- Taxes
- Trade Associations
- Advocacy Groups
- economics
Document Images
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THE TOBACCO INSTITLITE
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POST OFFICE BOX 8269
LIBBIE SQUARE
1801 LIBBIE AVENUE
RICHMOND, VA 23226
804r 282--1275
A STATE TAX P'L' A;.w - TEXAS
The State Tax Plan is for the use of the lobbyist
in Texas under the directorship of the State
Activities Division of The Tobacco Institute.
August 8', 1983
NATIONAL OFFICE * 1875 1 STREET. NORTHWEST * WASHINGTON. DC 200(lEi . 202/457-4800
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A STATE TAX PLANI - TEXAS.
I. P'olitical and~Legi!slative Situa~tio
A:. Legislative Outlook for 1984
1. Overview of 1983 Session to Date
2'. Threat of Cigarette Tax Increase for 1984'.
B. Make-up of the Legislative Process
1. Governor
2. House
3. Senate
4. Legislature in General
C.' Support Groups
D'. Historical Background of the Cigarette Tax
in!Texas
II. Position Papers on a Cigarette Tax Increase in Texas
A. Reasons for Opposing an Increase in the Cigarette Tax
1. Unfair fair and'Selectiive Tax
2. Regressivity
3. Effects on Economy
4. Cigarette Bootlegging in Texas
5. Declines in Sales and~ P'er Capita
B. One Page Fact Sheet for Legislators and Other
Interested Parties
C. Economic Impact of an Increase in the Texas Ci~garette.
Tax Rate:
1. Tables Derived from Econometric Sales Model for Texas.
A STATE TAX PLAN - TEXAS (continued)
III. Legislative Strategy
A. Short Term Strategy
B. Long Term Strategy
C. Support Materials.
1. List of Qualif'ied~ Individuals Who~ Wilil Testify
2. Question & Answer Format for General Use
3. Bills Pending as They Become Available
4. Summary Studies
Bootlegging Background Paper (Emphasis on
New York Situtation)' - This report is in-
cluded as the same situationicouild and
may happen in Texas.
(b) Graphs and Tables
August 8', 1983'
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Section I-A-1
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Overview of 1983 Session (as of'August 8,, 1983).
The tobacco industry faced serious cigarette tax increasee
legislation inlthe:regularsession of the Texas Legislature,
in 1983. Two bills originating in the House (Hi-l572 and H-19'2'91)'
were ciga!rette tax increase proposals, b t H-1572 which would
have increased'the cigarette tax from 18'.5 cents a pack to 19.5
cents was the primary vehicle under consideratio .
Texas is on a biennium legislative schedule and the reguliar
session convened in Janaury. In December the comptroller's
office had announced that the sitate had a $S.3 billion surplus,
which is not unusual for Texas. The state usually runs with,
a surplus because of the sales tax revenue from the oil and
gas industries. However, inlrecent times the oil and gas in,-
dustries have been taking a beating,,, although that situation
appears to have finally bottomed out. By March of this year,
the comptroller announced that the surplus had dwindled to $2.01
billion.
Governor Mark White, a democrat openly worked for an
increased tax on tobacco and alcohol this session in an attempt
to raise revenue to finance a 24 percent increase in teachers'
salaries.
Despite committe chairmen who were democrats and strong
lieaders, the Governor did not have strong support for his
proposals in the Legislature. Chairman Stan Schlueter of the
House Ways and Means Committee took a firm stand ag,ainst aa X
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cigarette tax increase primarily because of the effects of
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Section I-A-1
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cigarette bootlegging in Texas. Through the Tnstitute''s lobbyist
it was recognized in the Legislature that cigarette smuggling,is
already a serious problem in Texals and one that will worsen con-
siderably if a cigarette tax increase were to be passed.
The lobbyist in Texas was also able, over a period of'four
to five months, to create a climate against any tax increases
in this session. Citing the unemployment in Texas and the effects
of inflation in the state while working closely withithe leader-
ship in the House and Senate were reasons used to at least post-
pone a cigarette tax increase this session. Finally, working
with the Lt. Governor's office, it was possible to establish a
study commission on education which took the pressure off'the
Governor and allowed himito back out gracefully on his tax pro-
posals for pay raises for teachers.
A Select Committee on P1ablic Education will be studying
all aspects of education and its financial needs in Texas. The
committee is not expected to complete its stu!dy until late fall
or early winter. At that time the Governor could call a special
tax session which may include cigarette tax legislation.
The cigarette bills which had been pending in committee
were defeated in the House Ways and Means Committee by a vote
of 13 to 1.
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Section I-A-2
Threat of Cigarette Tax Increase (19183-84)
Although Governor Mark White couldicall a speciall tax
session of the Legislature as early as this fall it is not
likely that he will call one before January. A Select Committee
on Public Education~isstudying:the needs~of' educ~ation in Texas
and probably will not have its recommendations ready before
early winter.
It is the ge eral concensus that'if a special session is
called by the Governor (which can last only 3©' days), that the
leadershipiwill go into the session with an agreed uponiplan.
This plan may: include not onlythe,finaneial needsof' public
education, but the problems of highway funding, public employee
raises and otherr major needs as well. On the surface, the revenuee
needs appear to be so great as to cause the Legislature to look
more closely at a broad-based tax such as increasing the four
percent general sales tax or initiating a personaili income tax in
Texas.
This does not mean that the cigarette tax is out of the woodss
as far as a special session goes. It could well be that the
Select Committee on Public Educatio will recommendincrealses
in all the selective sales taxes (tobaccol liquor, public utilities,
insurance, motor fuels, beer and wine, vehicle sales and' amusements)
to provide a quick solution to finance pay raises for school
teachers. If all the "sin" taxes and other selective sales taxes
are thrown together, it will be difficult to remove cigarettess OD
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from the laundry list of tax increases.
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Section I-A-2
There is also the remote possibility that the gas and oil
industries will rebound enoughto increase sales tax revenues
beyond anticipated levels, and!no special tax session will be
called in 1984. This does not appear likely, however.
Augus t 8,, 19'83
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Support Groups
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The lobbyist in Texas will want the help of certainn
support group categories to help him in h~is efforts to defeat
cigarette tax legislation.
1. The Tobacco Institute: Internal
This support begins at The:Tobacco Institute with the
regional vice president who wiill! offer the lobbyist overall
direction for the session.
It certainly includes the research staff'who can provide
the lobbyist with current data and econometric predictions
on revenue and sales on short notice., The relationshi:p with
the research staff'should be such that the lobbyist may callil
the members of'the research staff at his discretion for infor-
mation. The research staff should alsolwork with the legis-
lative:servicesdivisio o~fthestate and with theTexas:
Tobacco Tax Administrator to develop a liaison which may pro-
vide additional help to the lobbyist.
. The lobbyist should also have available to hilmit}ie public
relations department for any public affairs materials he may
need or for local public relations help he may deemiappxopriate..
2'. The Industry
The lobbyist also will use the resources...internal and
external~.-of the member cigarette companies and their sub-
sidiaries,, especiailily those which have proven helpful in the
past. A list of subsidiaries will be kept on file at The
Institute which the lobbyist can have access to under the
