Effect on payments to farmers at issue
Jump to full article: Lexington (KY) Herald-Leader, 2002-03-01
Author: Jack Brammer / HERALD-LEADER FRANKFORT BUREAU
Intro: A key legislator and the Kentucky Farm Bureau want to know whether a cigarette tax increase would jeopardize millions of dollars tobacco companies are putting up to compensate growers for drastic cuts in leaf purchases.
House Agriculture and Small Business Chairman Roger Thomas, D-Smiths Grove, said yesterday he is seeking an attorney general's opinion on what effect, if any, raising the tax would have on payments to farmers.
The Farm Bureau also plans to ask Attorney General Ben Chandler the same question, said Pat Jennings, the organization's director of public affairs.
The money in question is to be paid over 12 years to farmers. It is known among farmers as Phase Two of a larger settlement tobacco companies have with the states -- a $246 billion reimbursement for treating smoking-related illnesses. The Phase Two fund has $5.1 billion, and Kentucky's share is $1.5 billion.
"I want to be clear exactly how legislation to raise the excise tax on tobacco product would affect the settlement payments," said Thomas, a farmer.
He said he thinks it would "negatively impact" the payments. If the attorney general agrees, the lawmaker said, "that would give us more ammunition in fighting any tax increase."
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