Michigan Governor, Lawmakers Proposes 50-cent Cigarette Tax Increase

Gov. John Engler and legislative leaders on Wednesday proposed increasing the cigarette tax by 50 cents.

The increase would raise the state tax on cigarettes from 75 cents to $1.25 per pack, making it the nation's third-highest, according to the National Conference of State Legislatures. The per-pack tax is $1.50 in New York, and $1.42 in Washington state.

It also would affect other tobacco products, such as chewing tobacco.

The tax hike is expected to generate $107 million a year for the school aid fund and $154 million for other parts of the budget, said Engler spokeswoman Susan Shafer.

The additional revenue would help lawmakers balance the $350 million general fund shortfall for the upcoming budget year.

House leaders were considering taking up the cigarette tax increase proposal.