Legislature(1997 - 1998)

02/05/1997 09:00 AM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                        February 5, 1997                                       
                           9:00 a.m.                                           
  MEMBERS PRESENT                                                              
 Senator Gary Wilken, Chairman                                                 
 Senator Loren Leman, Vice Chairman                                            
 Senator Lyda Green                                                            
 Senator Jerry Ward                                                            
 Senator Johnny Ellis                                                          
  MEMBERS ABSENT                                                               
 All members present.                                                          
  COMMITTEE CALENDAR                                                           
 SENATE BILL NO. 13                                                            
 "An Act relating to taxes on cigarettes and tobacco products, and             
 to the use of the proceeds of those taxes; and providing for an               
 effective date."                                                              
  - HEARD AND HELD                                                             
 SENATE BILL NO. 61                                                            
 "An Act relating to taxes on cigarettes and tobacco products, and             
 to the use of the proceeds of those taxes; and providing for an               
 effective date."                                                              
  - HEARD AND HELD                                                             
  PREVIOUS SENATE COMMITTEE ACTION                                             
 SB 13 - No previous action to record.                                         
 SB 46 - No previous action to record.                                         
  WITNESS REGISTER                                                             
 Senator Sharp                                                                 
 State Capitol                                                                 
 Juneau, Alaska 99801-1182                                                     
  POSITION STATEMENT:   Prime Sponsor of SB 13.                                
 Senator Ellis                                                                 
 State Capitol                                                                 
 Juneau, Alaska 99801-1182                                                     
  POSITION STATEMENT:   Prime Sponsor of SB 61.                                
 Barbara Cohea                                                                 
 Maniilaq Health Association                                                   
 Box 43                                                                        
 Kotzebue, Alaska                                                              
  POSITION STATEMENT:   Supported tobacco tax increase.                        
 Arliss Sturgulewski, Volunteer                                                
 Citizens to Protect Kids from Tobacco                                         
  POSITION STATEMENT:   Supported tobacco tax increase.                        
 John Petraitis, PhD                                                           
 Research Psychologist                                                         
 University of Alaska                                                          
 30319 List Circle                                                             
 Eagle River, Alaska 99577                                                     
  POSITION STATEMENT:   Stated that a tobacco tax increase is the most         
                     effective way to decrease adolescent use.                 
 Terry Strle                                                                   
 American Heart Association                                                    
 412 Baranof                                                                   
 Fairbanks, Alaska 99701                                                       
  POSITION STATEMENT:   Supported the $1.00 tobacco tax increase.              
 Anne Marie Holen, Health Program Manager                                      
 Alaska Native Health Board                                                    
 11241 Latta Circle                                                            
 Anchorage, Alaska 99576                                                       
  POSITION STATEMENT:   Supported a tobacco tax increase of at least           
 Suzanne Meunier, Executive Director                                           
 American Heart Association                                                    
 701 W. Fireweed                                                               
 Anchorage, Alaska                                                             
  POSITION STATEMENT:   Supported a $1.00 tobacco tax increase.                
 Joyanne Bloom                                                                 
 Juneau Tobacco Prevention Network                                             
 883 Basin Road                                                                
 Juneau, Alaska                                                                
  POSITION STATEMENT:   Discussed the networks work and award.                 
 Cathy Flavin                                                                  
 Bristol Bay Area Health Corporation                                           
 PO Box 130                                                                    
 Dillingham, Alaska 99576                                                      
  POSITION STATEMENT:   Supported SB 13 and SB 61.                             
 Matt Hanley, Student                                                          
 Lathrop High School                                                           
 Fairbanks, Alaska                                                             
  POSITION STATEMENT:   Discussed the tobacco tax increase.                    
 Paul Aguilar                                                                  
 1156 Kodiak                                                                   
 Fairbanks, Alaska 99709                                                       
  POSITION STATEMENT:   Supported the tobacco tax increase.                    
 Romie Deschamps                                                               
 HC 5 Box 9779                                                                 
 Palmer, Alaska 99645                                                          
  POSITION STATEMENT:   Supported the tobacco tax.                             
 Judith Bendersky                                                              
 12901 Trent Circle                                                            
 Anchorage, Alaska 99516                                                       
  POSITION STATEMENT:   Supported the tobacco tax.                             
 Jean Murray                                                                   
 PO Box 3033                                                                   
 Anderson, Alaska 99744                                                        
  POSITION STATEMENT:   Supported the tobacco tax.                             
 Ron Hammett, Vice Chairman                                                    
 State Legislative Committee                                                   
 American Association of Retired Persons                                       
 3512 Stanford Drive                                                           
 Anchorage, Alaska 99508                                                       
  POSITION STATEMENT:   Supported at least a $1.00 tobacco tax                 
 Margaret Wright, Board Member                                                 
 Alaska Public Health Association                                              
 Box 755                                                                       
 Kotzebue, Alaska 99752                                                        
  POSITION STATEMENT:   Supported at least a $1.00 tobacco tax                 
 Kim Greer, Health Care Professional                                           
 Homer Tobacco Alliance                                                        
 PO Box 1683                                                                   
 Homer, Alaska 99603                                                           
  POSITION STATEMENT:   Supported a tobacco tax increase of at least           
 Rex Shattuck                                                                  
 21665 Sheltering Spruce                                                       
 Chugiak, Anchorage 99562                                                      
  POSITION STATEMENT:   Opposed a tax increase for which the revenue           
                      collected cannot be earmarked.                           
  ACTION NARRATIVE                                                             
  Tape 97-7, SIDE A                                                            
                 SB  13 INCREASE TOBACCO TAXES                                
                 SB  61 INCREASE TOBACCO TAXES                                 
 Number 001                                                                    
  CHAIRMAN WILKEN  called the Senate Health, Education & Social                
 Services Committee (HES) to order at 9:00 a.m. and explained that             
 public testimony would be taken on  SB 13  and  SB 61  today.  Expert         
 and agency testimony will be taken on Monday.  He requested that              
 the testimony be limited to five minutes and reminded everyone to             
 keep comments directed to the legislation at hand.                            
  SENATOR SHARP , Prime Sponsor of SB 13, read the following sponsor           
 This bill is a tax bill, an education bill, and a health bill.                
 Section 1 details the legislative intent and purposes of the bill.            
 Section 1, item (1) and (2) starting on line 6 directs the                    
 cigarette tax be deposited to the existing "dedicated school fund"          
 and can only be used for rehabilitation, construction and repair of           
 the state's school facilities per <AS 43.50.140>.                             
 Item (3), page 1, lines 12-14 and page 2, lines 1-3 states                    
 legislative intent, "subject to  appropriation," that the new                 
 tobacco tax revenue be used for the establishment maintenance of an           
 aggressive anti-tobacco campaign targeting children and also to               
 establish and maintain a program of pass through grants to                    
 municipalities for programs to detect and prosecute those who sell            
 or supply tobacco products to children.                                       
 Sections 3 and 4 increases the tax on each cigarette by $1.00 per             
 Section 5, increases the excise tax on tobacco products <non-                 
 cigarettes> from 25% of wholesale value to 100% of wholesale value,           
 Sections 6,7 and 8 sets varying conditions and effective dates                
 depending on possible court decisions.                                        
 The accompanying fiscal note breaks the estimated revenue from                
 cigarettes and that from other tobacco products because of the                
 proposed different uses.  These amounts would represent a                     
 significant portion of the $66 million of new revenue that we have            
 committed to raise in FY 98 of our long range fiscal plan.  I urge            
 your careful consideration of the several extremely positive public           
 policy elements of this proposal and the strong public support of             
 this action statewide.                                                        
 Senator Sharp indicated that he may offer an amendment at the next            
 committee hearing in order to tighten the what if portion of the              
 bill.  He noted that Jack Chenowith, the drafter, was present for             
 any questions regarding the legal reasoning behind portions of the            
 Number 153                                                                    
  SENATOR WARD  asked if the dedicated school tax and the increase is          
 deemed unconstitutional, would SB 13 place the new tax in the                 
 general fund.   SENATOR SHARP  replied, yes.  If a court decides that         
 the money cannot be placed in the dedicated school fund, then the             
 money would be placed in the general fund for the same purposes per           
 the intent of the legislation.  The bill was structured in this               
 manner in order to eliminate the possibility of court action                  
 delaying the implementation which may or may not effect where the             
 money is placed.  Therefore, the collection of the money during the           
 court process would not be precluded.                                         
  SENATOR ELLIS , Prime Sponsor of SB 61, informed the committee that          
 he sponsored a similar bill last year that passed the Senate with             
 a great deal of help from Senator Sharp, although the bill was                
 denied a final vote in the House of Representatives.  Senator Ellis           
 noted that he was a co-sponsor on SB 13 and supported Senator                 
 Sharp's efforts.  SB 61 would raise the current tax on nicotine               
 from $.29 to $1.25 per pack which is $.25 more than all the other             
 proposals before the Legislature.  Senator Ellis choose that amount           
 in order to more accurately reflect the true costs of nicotine                
 consumption in terms of health care costs to the state and society            
 as well as lost productivity and economy.  That actual cost is                
 about $3.90 per pack of cigarettes.                                           
 Number 206                                                                    
 Senator Ellis informed the committee that nearly 84 percent of                
 Alaskan adults began their nicotine habit between the ages of 10              
 and 20.  From reliable studies other than those hired by the                  
 tobacco industry, the demand curve for underage consumption of                
 nicotine products is highly elastic; as the price increases the               
 demand for young people decreases.  Senator Ellis pointed out that            
 as the Medicaid budget increases and other important services are             
 constricted, this tax increase is a tangible way in which to offset           
 those health care costs as well as preventing future costs.  SB 61            
 places the cigarette tax revenues in the school construction fund             
 as well as contingency language for the possibility of court action           
 just as in SB 13.  The non-cigarette tax increase of 75 percent               
 would be used for tobacco education and enforcement that is not               
 occurring now; this language was suggested by Senator Sharp last              
 year.  In conclusion, Senator Ellis thanked the grass roots                   
 supporters of this legislation.                                               
     In response to Senator Leman,  SENATOR ELLIS  clarified that the          
 total levy would be $1.25 plus the existing $.29.                             
 Number 251                                                                    
  SENATOR WARD  asked Senator Ellis why the tax increase was not               
 $3.90, if that is the actual cost incurred by the state for tobacco           
 users.   SENATOR ELLIS  said that he did not believe Senator Ward             
 would vote for that.   SENATOR WARD  commented that may be the only           
 way to get his vote.   SENATOR ELLIS  explained that he did not               
 believe people would be prepared to support a tax of that                     
 magnitude.  Senator Ellis said that he would consider the                     
 possibility of the increase of $3.90, if Senator Ward was willing             
 to vote for that proposal.  The $1.25 currently in the bill is a              
 realistic approach that has a better chance of passing.                       
  SENATOR WARD  inquired as to the current and projected percentage of         
 this tax that would be paid by minors versus adults.   SENATOR ELLIS          
 said that he would be happy to provide that information.                      
  BARBARA COHEA , testifying from Kotzebue, stated that the American           
 Cancer Society, Heart Association, Lung Association, Alaska Native            
 Health Board, Alaska State Medical Association, Dental Society,               
 Anchorage School District, American Association of Retired Persons-           
 Alaska Chapter plus 44 more, support an increase in the tobacco               
 tax.  She reviewed the lies of the tobacco industry over the past             
 50 years.  Ms. Cohea could not believe that at a 1994 Congressional           
 hearing, seven Chairman Presidents and CEOs of major tobacco                  
 companies under oath each stated their disbelief that nicotine is             
 Number 314                                                                    
 Ms. Cohea informed the committee of the following facts which those           
 in the tobacco industry refuse to believe:                                    
 (1) The National Science Foundation says that 400,000 people per              
     year die of smoking related illnesses.                                    
 (2) The World Health Organization, National Institute on Drug Use,            
     and the American Psychiatric Association and 87 percent of                
     smokers recognize that the nicotine in tobacco meets the                  
     criteria on drug addiction.                                               
 (3) The American Lung Association and the Center for Disease                  
     Control know that 90 percent of all smokers began smoking                 
     before the age of 19.  The average of those starting to smoke             
     is 14 and a half.                                                         
 Ms. Cohea emphasized that the tobacco industry does know these                
 facts, especially the age of the beginning smoker.  The tobacco               
 industry has a consumer base that dies from using its product,                
 therefore, the industry must recruit 1,100 customers to keep up               
 with those customers that die each day.  Adults do not start                  
 smoking, children do.  Since the introduction of the cartoon                  
 character, Joe Camel, Camel sales to teen smokers has increased 64            
 percent.  Further, a Federal Trade Commission report to Congress              
 found that the tobacco industry spends $5.2 billion a year on                 
 marketing cigarettes.  The tobacco industry knows that studies show           
 that a one percent increase in tobacco taxes is expected to result            
 in a 31 percent reduction in consumption.  Ms. Cohea stressed that            
 this is all about the tobacco industry's profit, if teen                      
 consumption is reduced so is the industry's profits.  Ms. Cohea               
 urged the committee to vote for the tobacco tax increase.                     
  CHAIRMAN WILKEN  welcomed Jim Sampson, Mayor of the Fairbanks                
 Northstar Borough.                                                            
 Number 353                                                                    
  ARLISS STURGULEWSKI , volunteer for the Citizens to Protect Kids             
 from Tobacco, supported both bills before the committee.  The                 
 tobacco industry is under attack; some 19 states have brought suits           
 against tobacco companies in an attempt to recover state Medicare             
 and Medicaid as well as other health costs related to tobacco                 
 related illnesses.  The legislation before the committee today is             
 an opportunity to stop a substantial number of teens from being               
 hooked on cigarettes.  Ms. Sturgulewski reiterated that studies               
 show that a significant tobacco tax increase would deter young                
 people from starting to use tobacco.  Seventy percent of people               
 support this tobacco tax increase.                                            
 Ms. Sturgulewski echoed Ms. Cohea's comment regarding the large               
 amount of money the tobacco industry spends on advertising each               
 year.  A year ago, Joe Camel was recognized by 91 percent of six-             
 year-olds which is about the same percentage who recognize the                
 Disney Channel - Mickey Mouse logo.  Now Phillip Morris has begun             
 a record label entitled 'Woman Thing Music' after its Virginia                
 Slims, It's a Woman Thing brand.  The album is available along with           
 two packs of Virginia Slims.  Critics indicate that this is an                
 attempt to attract music loving teens.  She said that the tobacco             
 industry is well aware that 84 percent of adults who smoke began              
 before the age of 20.  Ms. Sturgulewski recounted the story of her            
 sister-in-law who was a smoker who tried numerous ways to quit;               
 people cannot just quit.  Unfortunately, many years pass before the           
 ravages of smoking are recognized.  She urged the committee to move           
 ahead on this issue.                                                          
 Number 411                                                                    
  SENATOR WARD  said that he agreed with most of Ms. Sturgulewski's            
 comments.  He asked if she believed that nicotine is a drug and               
 should be regulated with increased penalties for those who sell to            
 children.   ARLISS STURGULEWSKI  agreed that a review of how the              
 industry is treated with regards to penalties and education is                
  SENATOR ELLIS  noted that when the tax was increased in 1989 and a           
 couple of years later many tobacco control pieces of legislation              
 were also passed.  The most significant tobacco control legislation           
 passed was the $25 charge to the businesses who sell nicotine.                
 There is no enforcement of those who sell nicotine to children.               
 Senator Ellis indicated that a political will to enforce those laws           
 was all that was necessary.                                                   
  JOHN PETRAITIS , PhD Research Psychology teacher at the University           
 of Alaska representing the American Lung Association, informed the            
 committee that he had received many federal grants to study                   
 adolescent smoking, adolescent alcohol use, and adolescent drug               
 use.  He has published a number of scholarly research articles on             
 the aforementioned issues.  Most recently, Mr. Petraitis                      
 contributed a chapter to the 1997 Surgeon General's report on                 
 Mr. Petraitis reviewed the following tobacco prevention strategies.           
 (1) Education - If children could be educated about the dangers of            
     smoking, that would work towards decreasing smoking.  The                 
     scientific literature regarding the effects of such education             
     programs illustrate that education programs have impressive               
     short-term effects on children's knowledge.  However, the                 
     evidence suggests that these education programs do not result             
     in smoking prevention in the future.                                      
 (2) Regulation of Access - Elimination of tobacco sales to minors.            
     Alaska has a fairly decent rate of compliance; a check last               
     summer found that 64 percent of the merchants refused to sell             
     to minors.  That average is better than the national average,             
     however, Alaska's number of adolescent smokers is worse than              
     the national average.  Recent evidence suggests that if the               
     compliance rate could be increased from 64 percent to 80                  
     percent, there would not be an effect on the smoking rate of              
     Alaskan children.  Social scientists believe that the                     
     compliance rate must reach 90 percent in order to see a                   
     decrease in the number of children who smoke.                             
 Number 484                                                                    
 (3) Increased Taxation - Mr. Petraitis informed everyone that the             
     following information was obtained from Kenneth Warner, the               
     Scientific Editor for the 25th Anniversary of the Surgeon                 
     General's Report on Smoking & Health.  Mr. Warner found that              
     there is no debate among professional economists who have                 
     studied the matter:  the standard law of demand is operating              
     with cigarettes as with all other commodities.  When the price            
     increases the demand decreases.  Mr. Petraitis emphasized that            
     "all economists" refers to those economists oriented toward               
     public health and economists working for the tobacco industry.            
     Mr. Warner found that evidence strongly indicates with a tax              
     increase children's demand will be reduced more than adults.              
     Mr. Warner concluded that tobacco taxation is the single most             
     effective measure available to discourage smoking among                   
  TERRY STRLE , American Heart Association, supported the $1.00                
 tobacco tax increase.  She discussed the passage of a resolution              
 supporting a substantial tax increase on tobacco products by the              
 Statewide PTA Convention.  The tobacco tax resolution passed with             
 overwhelming support and little discussion.  The information is               
 available that illustrates that a $1.00 tax increase would deter              
 children from obtaining this life threatening habit.  Ms. Strle               
 urged the committee to support the $1.00 tobacco tax and not lose             
 sight of the health benefits it would provide to future Alaskans.             
  CHAIRMAN WILKEN  noted that Ms. Strle was the past President of              
 MADD in Fairbanks.  He had read that the most effective campaign of           
 MADD was when the focus was placed on the drunk driver's friends              
 with the slogan, "Friends don't let friends drive drunk."  Chairman           
 Wilken asked Ms. Strle if a similar campaign could be used with               
 smoking if one of the bills pass with money for educational                   
 support.   TERRY STRLE  believed that would work.  The American Heart         
 Association has programs targeting grades K-6 available for                   
 Number 540                                                                    
  ANNE MARIE HOLEN , Health Program Manager with the Alaska Native             
 Health Board, noted that she was active on the tobacco tax issue              
 last year.  The biggest change this year is that the tobacco                  
 industry is much more active in its opposition to this legislation.           
 Ms. Holen cited numerous examples of how the tobacco industry is              
 quietly recruiting people to speak in opposition to tobacco control           
 legislation.  For example, the Alaska Smoker's Rights group is                
 really a front group for RJ Reynolds.  A friend of Ms. Holen's                
 attended one of the meetings in Anchorage which recruited people to           
 testify at a House State Affairs meeting in opposition to the                 
 legislation.  The tobacco industry is also organizing distributors            
 and retailers, recruiting them to testify at hearings, write                  
 editorials with language provided by the industry and circulating             
 petitions.  Ms. Holen stated that none of the activities would be             
 sinister, but the motive is to protect the industry's ability to              
 addict children and continue high rates of tobacco use in Alaska.             
 Tobacco use is already the leading cause of death in Alaska.  Ms.             
 Holen urged the committee to pass the legislation with a tobacco              
 tax of at least $1.00.                                                        
  SENATOR LEMAN  asked Ms. Holen if she knew what portion of tobacco           
 products would be exempt from this tax.  Senator Leman noted that             
 the tobacco products sold on military installations would be exempt           
 from this taxation.   ANNE MARIE HOLEN  recalled from a previous              
 meeting that the tobacco industry said that 45 percent would be               
 exempt, but since have issued a paper correcting that to 8 percent            
 which is in line with the Department of Revenue.  She indicated               
 that perhaps, someone else could better answer Senator Leman's                
  CHAIRMAN WILKEN  noted that there is an effort to verify what                
 portion of tobacco products would be exempt from this tax.  He                
 asked who comprised the Alaska Native Health Board (ANHB).   ANNE             
 MARIE HOLEN  explained that regional Native health corporations such          
 as the Tanana Chiefs Council.  The ANHB is an umbrella                        
  TAPE 97-7, SIDE B                                                            
 In response to Chairman Wilken, Ms. Holen said that the mission of            
 ANHB is to promote improvements in health among Alaska Native                 
 people.  Ms. Holen noted that this project actually targets all               
 Alaskans, not just Alaska Natives.  She said that she was acting as           
 the lead agency on behalf of the Statewide Coalition on the Alaska            
 Tobacco Control Alliance.                                                     
 Number 585                                                                    
  SUZANNE MEUNIER , Executive Director of the American Heart                   
 Association, informed the committee that heart disease claims more            
 lives in this country than any other cause of death combined.                 
 Tobacco is a leading risk factor for heart disease.  A major                  
 tobacco tax increase is the single most effective way to rapidly              
 and significantly reduce the number of children who start smoking             
 as well as encourage many adults to quit.  For every 10 percent               
 increase in cigarette prices, demand among youth declines by as               
 much as 14 percent.  Ms. Meunier acknowledged that some people                
 believe that taxing tobacco is unfair.  There is nothing unfair               
 about singling out tobacco because it is uniquely addictive and               
 lethal.  Tobacco is the single leading cause of preventable death             
 in this country; it kills nearly 420,000 Americans each year.  In             
 Alaska, smoking is the cause of one out of every five deaths and              
 costs the economy almost $300 million a year in direct health care            
 costs and lost productivity.  In other words, for every dollar                
 collected in tobacco taxes the Alaskan economy loses over $18 from            
 the impacts of smoking.  Tobacco is a unique public health problem            
 because the foe is the powerful industry with a vested interest in            
 making money from the very product causing the problem.  Tobacco              
 use does not provide any health benefits and is harmful in all                
 circumstances.  Unlike alcohol, tobacco kills even when used in               
 moderation.  The public supports tobacco taxes.  A January 1996               
 statewide survey found that 74 percent of Alaskans support an                 
 increase of $1.00 per pack in the state excise tax on cigarettes.             
 Of those supporters, 55 percent were Alaskan smokers.  In                     
 conclusion, Ms. Meunier urged the committee to support the $1.00              
 increase of the cigarette excise tax.                                         
  SENATOR LEMAN  commented that an awful byproduct of tobacco is the           
 effects of second-hand smoke on those who do not have the choice              
 such as unborn babies.  What portion of the $300 million could be             
 attributed to second-hand smoke?   SUZANNE MEUNIER   offered to               
 forward statistics on that to the committee.  With regard to women            
 carrying children, those who smoke have a higher rate of having a             
 spontaneous abortion.                                                         
 In response to Chairman Wilken,  SUZANNE MEUNIER  said that no                
 position had been taken regarding the use of the money.  The tax is           
 the single most effective way to reduce youth consumption as well             
 as adults.                                                                    
 Number 530                                                                    
  JOYANNE BLOOM , representing the Juneau Tobacco Prevention Network,          
 showed the committee a plaque given to the network by the Alaska              
 Public Health Association for being the most effective community              
 service group in Alaska for 1996.  Ms. Bloom said that one reason             
 for the award was the 25 high school students who have been trained           
 and developed presentations about the dangers of tobacco use for              
 grammar school presentations.  Friends telling friends not to smoke           
 is a very effective prevention tool as Chairman Wilken mentioned              
 earlier.  Eleven of the teens gave presentations at the Kid's Safe            
 Fair in Juneau this past week.  Another reason for the network's              
 recognition is the compliance checks to all tobacco vendors which             
 has resulted in close to a 90 percent compliance rate in Juneau.              
 Ms. Bloom asked the committee for their help in stopping children             
 from smoking.                                                                 
  SENATOR WARD  asked Ms. Bloom if her group was responsible for               
 Juneau Physical Education teachers giving their students who say              
 they have stopped smoking a half grade increase in that subject.              
  JOYANNE BLOOM  replied, no.  The Juneau Tobacco Prevention Network           
 has been involved in starting smoking cessation classes in the high           
 school.  Those classes will begin this month, during school time.             
 Also teen mothers are being targeted for this program.                        
 Number 485                                                                    
  CATHY FLAVIN , representing Bristol Bay Area Health Corporation,             
 stated support for SB 13 and SB 61.  Passage of these bills will              
 help reduce the number of Alaskans addicted to nicotine.                      
 Practically, all new users of tobacco products are children.                  
 Nicotine is highly additive and a gateway drug which often leads to           
 further drug experimentation.  Ms. Flavin noted that increasing the           
 price of tobacco is merely one facet of the overall picture in                
 helping to prevent children from wanting to try tobacco products.             
 She reiterated the lack of any health benefit from tobacco as well            
 as the fact that it is harmful to all users at all doses.  In                 
 conclusion, Ms. Flavin urged the committee to pass the tobacco tax            
 increase at no less that $1.00 per pack.                                      
  MATT HANLEY , an 18-year-old non-smoking Senior at Lathrop High              
 School, stated that there is not enough dedication to this issue.             
 Mr. Hanley indicated that people should strive for 90 percent                 
 compliance of vendors in order to make a difference in youth                  
 consumption.  This is not an issue with a quick fix.  Mr. Hanley              
 pointed out that there are existing laws addressing the illegality            
 of minors smoking.  He asked if the tax applies to other tobacco              
 products besides cigarettes.  With regard to the appropriation of             
 these funds, Mr. Hanley indicated the need for some of the funds to           
 be used for the costs resulting from tobacco use.                             
 Number 416                                                                    
  SENATOR ELLIS  clarified that with the tax increase there would be           
 an equally proportionate increase on tobacco products other than              
 PAUL AGUILAR , testifying from Fairbanks, believed the tobacco tax            
 is a great idea.  Cigarettes are very addictive and are a drug.               
 Mr. Aguilar said that the only reason tobacco was legal was due to            
 the fact that it is grown and produced in the U.S.  This tobacco              
 tax increase would be a beginning to end the use of this drug and             
 save many lives.                                                              
  ROMIE DESCHAMPS , a former 20 year smoker, informed the committee            
 that he was a pharmacist and a parent of six children.  He has been           
 the President of the Mat-Su American Cancer Society for two years             
 and on the state board.  As a pharmacist, Mr. Deschamps has seen a            
 higher incident in asthma and breathing difficulties in youths and            
 adults.  At a pharmacy convention last year an Anchorage                      
 pulmonalogist stated that by the year 2015, 75 percent of health              
 care costs will be directly contributed to tobacco use and its                
 related products.  Mr. Deschamps believed the tax to be the most              
 effective means to stop smoking and the use of tobacco products.              
 He expressed concern with the addiction potential; tobacco has a              
 higher addiction potential than crack cocaine and alcohol.                    
 Number 361                                                                    
  JUDITH BENDERSKY , a former smoker and Certified Health Specialist,          
 was unsure as to why she ever started smoking, perhaps she may have           
 been attracted by the advertising.  Ms. Bendersky informed the                
 committee that she works with those trying to quit their tobacco              
 habit for the American Lung Association.  Ms. Bendersky said that             
 she has spent the last three years pursuing a degree in Public                
 Health.  When trying to decide her focus, Ms. Bendersky determined            
 the most preventable problem of death and disability was the use of           
 tobacco.  Currently, Ms. Bendersky works for RURALCAP as the Health           
 Coordinator for the Headstart Program.  This allows her to travel             
 quite a bit, she has been appalled by the number of youth smoking             
 and chewing tobacco.  For the most part, these youth are receiving            
 the tobacco from older youth and purchasing them directly from                
 vendors.  Ms. Bendersky reiterated Mr. Hanley's comments regarding            
 the need to focus on the enforcement of existing laws.  This tax              
 represents a good policy.  Ms. Bendersky urged the committee to               
 pass the bill on to the next committee.                                       
  JEAN MURRAY , a non smoker testifying from Anderson, supported the           
 tobacco tax increase.  Ms. Murray encouraged the committee to bring           
 the legislation before the floor.  This is a tax on the user.  In             
 the long-term, this tax will reduce the cost of Medicare and                  
 Medicaid.  Ms. Murray believed that families could encourage their            
 children to do positive things such as running, swimming, skiing              
 and skating.  The importance of smuggling is overestimated.  Ms.              
 Murray indicated that the military and small, rural business owners           
 may cooperate with this.                                                      
 Number 269                                                                    
  RON HAMMETT , Vice Chairman of the State Legislative Committee for           
 the American Association of Retired Persons (AARP), noted that a              
 survey of some of the over 40,000 members in Alaska found that the            
 majority of AARP members support a tobacco tax increase of at least           
 $1.00 per pack.  There is good reason, as previous testimony                  
 indicated, that a tobacco tax increase would reduce the sale of               
 tobacco.  Mr. Hammett believed that there are many other things               
 that could be done to reduce smoking.  This tax increase would                
 effect the population as a whole, but the main concern is younger             
 people.  With regards to where the money is allocated, Mr. Hammett            
 indicated that however the legislation can be passed is of                    
 importance.  However, if the money is dedicated to school                     
 construction everyone wins even if smoking does not decrease.  In             
 conclusion, Mr. Hammett related his experiences as a former smoker            
 and friend of smokers.                                                        
  MARGARET WRIGHT , Board member of the Alaska Health Association,             
 stated that the organization believed that at least a $1.00 per               
 pack tobacco tax is necessary for the health of all Alaskans.  Ms.            
 Wright related the true story of a two-year-old child who has had             
 so many ear infections that he had to have surgery to place tubes             
 in his ears, he is prone to colds, and has already experienced                
 reactive airway disease.  The parents of this child smoke which               
 does not help.  The parents smoke outside, even in winter storms,             
 to protect their child because they believe some of his problems              
 are a result of their smoking.  Smoking outside the house does not            
 really protect the child; research in Bethel and the AMC has shown            
 that the clothes worn by smokers outside have enough smoke and                
 residue to increase the number of colds children have.  Ms. Wright            
 discussed how easy cigarettes are to obtain in the villages;                  
 cigarettes are cheaper than a candy bar.                                      
 Number 141                                                                    
 A significant tax increase of at least $1.00 would help these                 
 people and their children.  Studies show that for every 10 percent            
 increase in the tobacco tax about 10 percent fewer teens start                
 smoking.  National numbers as well as those in Alaska show that               
 teens are the ones who start smoking, not adults.  This year in               
 Alaska, 36 percent of high school children are smokers.  Ms. Wright           
 reiterated that 84 percent of adult smokers started before the age            
 of 18, as did the parents of the two-year-old.  The tax increase              
 will reduce teen consumption of tobacco.  Ms. Wright said that the            
 message that cigarettes are unhealthy has reached parents and their           
 children, now that message should be transmitted to the tobacco               
 industry.  Increase the tobacco tax to at least $1.00 per pack.               
  KIM GREER , Health Care Professional, informed the committee that            
 she was allied with the Homer Tobacco Alliance, Citizens to Protect           
 Kids from Tobacco, and any other organization that promotes health.           
 Ms. Greer noted that she is an Education Coordinator for the                  
 Central Peninsula Hospital and teaches tobacco education in the               
 school.  She grew up in second-hand smoke for 18 years.  She urged            
 the committee to listen to the statistics given by the American               
 Lung Association, the American Cancer Society, the DCD, former                
 Surgeon General Koop and not the tobacco industry.  Ms. Greer                 
 related her experience with the results of smoking on her father              
 and patients.  This tax is about the children, health and our                 
 future.  Research shows that when tobacco prices rise, consumption            
 declines.  The majority of Alaskans support this tax.  Ms. Greer              
 assured the committee of her dedication to decrease youth tobacco             
 consumption at the local level and urged the legislators to move              
 any bill to tax tobacco by at least a $1.00 or more.                          
  REX SHATTUCK , retired military, pointed out that after listening to         
 House sessions and today's testimony, the people speaking represent           
 a few different factions.  There were very few speaking as regular            
 people.  Mr. Shattuck said that the price nor price increases                 
 deterred him from smoking, the urging from his two sons ultimately            
 made him quit.  However, he could not accept a 344 percent tax                
 increase which cannot be earmarked for what it is designated.  In             
 the House legislation, Mr. Shattuck noted that for the money to go            
 into education a constitutional amendment was necessary.  Although            
 he said that he was not as versed in the Senate bills, he believed            
 the same approach was being taken.  This legislation is a tax                 
 increase and Mr. Shattuck did not ideologically support raising               
 revenue from taxes.  He suggested finding a better way of educating           
  TAPE 97-8, SIDE A                                                            
  CHAIRMAN WILKEN  asked if there was anyone else on teleconference            
 who would like to provide testimony.  Hearing none, Chairman Wilken           
 thanked everyone and asked if anyone in the room would like to                
 provide testimony.  Hearing none, he asked the committee if they              
 had any comments.                                                             
 Number 013                                                                    
  SENATOR LEMAN  noted that SB 61 adjusts for inflation with the CPI           
 adjustment which is a common approach.  After some research, he               
 concluded that the CPI overstates inflation in many areas.                    
 Perhaps, that question could be reviewed in Senate Finance.                   
 Senator Leman noticed that today's testimony was devoid of any                
 input from the tobacco industry.  He encouraged the tobacco                   
 industry to come forward with testimony.                                      
  CHAIRMAN WILKEN  commented that some say this legislation is a tax           
 increase and others believe it is a cost/tax shift from all                   
 Alaskans to the users.  He hoped that both of those view points               
 would be considered by the committee.  Hearing no further                     
 discussion, Chairman Wilken announced that testimony would be taken           
 on this issue on Monday.  There being no further business before              
 the committee, the meeting was adjourned at 10:35 a.m.                        

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