House, Senate Unreconciled on Cigarette Tax

05/03/02 12:00AM By Bob Kinzel
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(Host) House and Senate negotiators will begin work next week over the size of a proposed increase in the state cigarette tax. The issue is directly linked to the future of the state's drug assistance program for Medicaid recipients.

VPR's Bob Kinzel reports.


(Kinzel) One of the thorniest issues that will need to be decided in the final weeks of the legislative session is whether or not lawmakers should make structural reforms to the state's pharmaceutical assistance programs.

When the House addressed this issue, it proposed a series of larger co-payments and higher deductibles for these programs. These changes include a $1,000 deductible for elderly people with incomes between $15,000 and $24,000. The House plan includes a 36-cent increase in the cigarette tax to meet the requirements of the restructured programs.

The Senate, however, is taking a very different approach. It wants to restore the cuts imposed by the House. The Senate funds these programs by increasing the cigarette tax by 67 cents. Senate President Pro Tempore Peter Shumlin says the House passed cuts are unacceptable:

(Shumlin) "We are going to fight for 67 cents with all of our energy. We need the $24.8 million in order to fully fund the V-Script program for vulnerable Vermonters, who currently are getting prescription drugs are choosing between a roof over their head, the food they need to stay alive and the drugs they need to stay alive. And we're not throwing those folks off the train."

(Kinzel) House Majority Leader John LaBarge says the Senate is being shortsighted on this issue. LaBarge says these programs will be facing another deficit in two years if structural changes are not put into place now:

(LaBarge) "But the issue isn't really the tax. The issue is what the tax is being used for.... We have a program like V-Script that is growing at 18% a year and we're trying to fund it with a declining source of revenue. And as long as we keep going on this tack of using the cigarette tax to fund this program, we're going to be constantly dealing with it in the future with a deficit and having to either come back and raise more cigarette tax or shift the tax on to something else."

(Kinzel) It's expected that this will be one of the last issues to be resolved before the Legislature adjourns.

For Vermont Public Radio, I'm Bob Kinzel in Montpelier.
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