Thursday, January 29, 2009

Healthcare Group Eyes Fees On Small Florida Tobacco Companies

BY CAROL MARBIN MILLER
cmarbin@MiamiHerald.com

With deep cuts looming in the state budget, children's advocates are eyeing a potentially bountiful source of new dollars: small tobacco companies.

As the nation's largest cigarette makers battle upstart companies that sell smokes for half the price of older brands in Florida, a new combatant with a singularly sympathetic agenda has entered the fray: mothers and babies.

Leaders of Florida's Healthy Start, which provided prenatal care to almost 196,000 Florida mothers last year, are asking Gov. Charlie Crist to levy a 40-cent-a-pack assessment on a handful of small cigarette makers that have won about 20 percent of the state's cigarette market by pricing their product well below the large manufacturers.

The money, children's advocates say, should be set aside to fund Healthy Start, which is facing a 20 percent budget cut next year, with the state's sagging economy expected to force $3 billion in trims. Currently, the program only meets about half the demand for prenatal care statewide, the advocates say.

Smoking by pregnant women is a leading cause of low birth weight among infants, a condition that can lead to myriad health problems, they note.

''The irony of this situation is that it would cost much less to provide prenatal care and education, including smoking cessation services, to every woman who needs it than to pay the intensive care hospital bills of the babies who are born to mothers who received no care,'' Healthy Start's leaders wrote in a letter to Crist Monday.

Advocates of the fee -- and of a similar proposal to raise the tobacco tax across the board to raise revenue -- face a stiff head wind with lawmakers. Though many in the Legislature have found the constant cutting of jobs and programs withering, few say they have the stomach for new taxes, even so-called ''sin'' taxes.

CRIST TO REVIEW

Sterling Ivey, a spokesman for Crist, said the governor received the letter Monday, and staff will review it.

''The governor has said on numerous occasions that he is not interested in considering any tax increases,'' Ivey said.

Rep. J.C. Planas, a Miami Republican who said he needs to study the proposal before making a decision, fears the fee could siphon millions out of an already sagging economy. Assuming a smoker pays $5 a week in new tobacco fees, he said, ``that's $5 not going to Pablito's Cafe for weekly coladas.''

''In this economy, that's a problem,'' Planas said.

In 2007, Florida reported more than 1,680 infant deaths, and Healthy Start leaders wrote in the letter to Crist that the state's infant mortality rate in some counties ``approaches the rates of developing nations.''

Also in 2007, 20,767 Florida infants were born with a low birth weight. ''Maternal smoking is a leading preventable cause of low birth weight and premature babies, so it is very appropriate to hold cigarette companies accountable for the health costs they inflict on the state,'' the advocates wrote.

In February 1995, the state sued the largest tobacco companies, claiming they had unjustly enriched themselves by hiding the health costs of smoking. State leaders sought billions in damages to cover the costs of indigent health care for Floridians whose smoking made them sick.

Florida entered into a landmark $368 billion settlement with the so-called Big Four tobacco companies -- Phillip Morris, R.J. Reynolds, Brown & Williamson and Lorillard -- in August 1997. At the time, the Big Four held a 97 percent share of the U.S. tobacco market.

Over time, however, the smaller cigarette makers -- which can price their product considerably lower than the large companies paying the assessment -- have garnered a larger share of the market, a 2004 state Senate report said.

NEW REVENUE

Adding the nonsettling companies to the assessment could generate between $50 million and $86 million, the state Revenue Estimating Conference reported in 2005.

Sarah Bascom, a spokeswoman for Opa-locka-based Dosal Tobacco, one of the companies being targeted for the fees, accused the large tobacco companies of exploiting ''well-deserving and noble'' groups like Healthy Start by convincing them to ``do their [Big Tobacco's] bidding so they can gain market share.''

Leslie Spurlock, the Vero Beach-based president of the Florida Association of Healthy Start Coalitions, strongly denied being in cahoots with Big Tobacco. ''I'm just speechless,'' she said. ``We stand for moms and babies and health. Big Tobacco would be the furthest thing from our thoughts.''

State Sen. Michael S. Bennett, a Bradenton Republican, said he does not favor any new fees on the tobacco companies that did not settle with the state a decade ago, but could support as much as a $1-a-pack hike in the tobacco tax that hits all companies.

''To me, if you're going to tax them, tax them all,'' Bennett said.

source: miamiherald.com

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