Federal cigarette tax hike could impact states

States' efforts on cigarette taxes could be thwarted by federal increase

The federal government is increasing the cigarette tax from 39 cents a pack today to $1.01 a pack in April to help fund a children's health insurance program and boost efforts to curb smoking. However, sixteen states, including Georgia, South Carolina, Mississippi and Kentucky, are considering their own increases in taxes on tobacco products to fill budget gaps or fund programs.

The sharply increased federal levy could alter their calculations, because the higher cigarette prices are likely to decrease sales, eroding projected tax revenue. States will need to recalculate tax-revenue projections and weigh how much they can push the state tax on cigarettes.

Also in the South:

ALABAMA: Two freshmen Democrats vote with GOP against stimulus package

ARKANSAS: Speaker of the House gives details on lottery legislation for scholarships

FLORIDA: State's budget outlook continues to worsen

GEORGIA: Senator wants investigation of grade inflation at schools

KENTUCKY: Alcohol industry gears up to fight increase in state taxes

LOUISIANA: Device invented by Lafayette man to improve emissions from diesel-powered vehicles

MISSISSIPPI: Nissan plant in Canton moving forward on $118 million expansion

NORTH CAROLINA: Legislature considers banning driver text-messaging

SOUTH CAROLINA: Bill would increase health insurance premiums on obese public employees

TENNESSEE: Gov. Bredesen delivers annual State of the State address

VIRGINIA: GOP congressmen skip Gov. Kaine's annual talk with congressional delegation

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