2004-03-19                     Senate Journal                      Page 2567
$133 million. In addition, CDCP estimates Alaska's total cost of lost                               
productivity due to early tobacco-related deaths in 2001 was $137                                   
million.                                                                                            
                                                                                                    
Alaska can expect to see fiscal savings relatively soon following                                   
implementation of this proposed tax. Within five years, the health care                             
savings from fewer smoking affected pregnancies and births will                                     
amount to $1.6 million, according to the Campaign for Tobacco-Free                                  
Kids. This group estimates that the savings in the state from fewer                                 
smoking-related heart attacks and strokes will be $1.8 million, and the                             
long-term health care savings from adult and youth smoking declines                                 
will be $146.3 million.                                                                             
                                                                                                    
While saving in medical and lost-productivity expenditures, the                                     
proposed tax would also generate an estimated $35.5 million in new                                  
tax revenues for the state annually. In addition, an estimated $350,000                             
in new revenues will be generated for those municipalities in the state                             
that levy a sales tax on the retail price of cigarettes.                                            
                                                                                                    
With cigarette taxes at $2.00 a pack, there will be incentive for tax                               
evasion and smuggling. The new tobacco tax stamp, as passed into law                                
last year, will help address this issue by serving to identify illegal                              
cigarettes. To further advance this enforcement effort, my proposed                                 
bill allows the Department of Public Safety to seize and dispose of                                 
equipment, vehicles, money, and other assets used in cigarette                                      
smuggling and tax evasion activities. These types of seizures will                                  
make cigarette smuggling and tax evasion less attractive and protect                                
state revenues.                                                                                     
                                                                                                    
Given the health impact, cost savings, and revenue to be generated                                  
from the proposed tobacco tax, I urge your support for this legislation.                            
                                                                                                    
Sincerely yours,                                                                                    
/s/                                                                                                 
Frank H. Murkowski                                                                                  
Governor                                                                                            
                                                                                                    
SB 369                                                                                            
SENATE BILL NO. 369 BY THE SENATE JUDICIARY                                                         
COMMITTEE, entitled: