Virginia's Tobacco Tax Hike a Sign of the Times

Without a word of dissent, Virginia legislators did what once seemed unthinkable: increased the nation's lowest cigarette tax in the state where colonists first raised tobacco as an American cash crop nearly 400 years ago.

The Senate and the House of Delegates, both controlled by Republicans, passed a $1.3 billion tax package Tuesday night that increases the state's cigarette tax from 2.5 cents a pack to 20 cents this year and to 30 cents in 2005. Democratic Gov. Mark R. Warner (search) had sought higher cigarette taxes and other tax increases to balance the state's budget.

While a 30-cent tax seems modest compared with per-pack taxes of $1 or more in 16 other states, the increase is remarkable in a state that has protected tobacco interests for decades, public-health advocates said.

"This is a historic first step," said Donna Reynolds, spokeswoman for the American Lung Association of Virginia (search). "Our goal was 75 cents, which would make Virginia about average, but we're very happy."

The only previous change in Virginia's cigarette tax came in 1966 when legislators, concerned that the industry could be hurt by the first surgeon general's report on smoking two years earlier, reduced the tax from 3 cents to 2.5 cents.

In recent years, proposals to raise the cigarette tax have been unceremoniously killed in Virginia, where tobacco has been an important crop since it was first grown in the early 1600s at Jamestown, the first permanent English settlement in America. Tobacco is so much a part of state culture that images of the golden leaf are painted on the dome of the Capitol rotunda.

Virginia ranks fourth nationally in tobacco production — behind North Carolina, Kentucky and Tennessee — growing 66.7 million pounds valued at $125.4 million in 2002, according to the Virginia Agriculture Statistics Service (search).

Richmond is the site of the world's largest cigarette factory, operated by Philip Morris.

Philip Morris, which fought previous proposals to raise the cigarette tax, was satisfied with the 30-cent increase, spokeswoman Jamie Drogin said.

Some lawmakers had complained that increasing the tax would appear inhospitable to Philip Morris, which in October began relocating its corporate headquarters from New York to Richmond.

GOP Sen. Stephen H. Martin said Philip Morris' early acquiescence to a modest tax increase kept opposition to a minimum.

"You'd have heard more noise and resistance if that had not been the case," he said.