Legislature(1997 - 1998)
02/05/1997 09:00 AM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE HEALTH, EDUCATION & SOCIAL SERVICES COMMITTEE 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 $1.00. 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 increase. Margaret Wright, Board Member Alaska Public Health Association Box 755 Kotzebue, Alaska 99752 POSITION STATEMENT: Supported at least a $1.00 tobacco tax increase. Kim Greer, Health Care Professional Homer Tobacco Alliance PO Box 1683 Homer, Alaska 99603 POSITION STATEMENT: Supported a tobacco tax increase of at least $1.00. 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 statement: 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 pack. 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 bill. 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 addictive. 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 necessary. 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 smoking. 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 adolescents. 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 schools. 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 question. 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 organization. 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 cigarettes. 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 youth. 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.