HB 1 - CIGARETTE AND TOBACCO TAX HB 52 - INCREASE TOBACCO TAXES  The first order of business to come before the House State Affairs Standing Committee was HB 1, "An Act relating to taxes on cigarettes and tobacco products; and providing for an effective date." And, HB 52, "An Act relating to taxes on cigarettes and tobacco products; and providing for an effective date." CHAIR JAMES explained Vincent Usera, Department of Law, was here to explain how the tobacco tax affected Indian country. Bob Bartholomew, Department of Revenue, was also here to provide testimony. Number 370 VINCENT USERA, Assistant Attorney General, Commercial Section, Civil Division, Department of Law, said he was here in response to a letter by Chair James addressing the possibility of a black market in relation to Indian country, and how that affected the collection of taxes. He stated under federal law, if cigarettes were sold on Indian country to a member of the tribe, a tax could not be collected. However, a tax could be collected on the sale to a non-member. There were mechanisms to enforce the collection. In many states there were cooperative relationships between the tribes and the states to allow for the collection of the taxes from non- Indians. He mentioned there was a supreme court case that supported the states to require the Indian tribes to collect taxes from non-Indians, and a supreme court case that addressed enforcement mechanisms. Number 0534 CHAIR JAMES asked Mr. Usera if one of the available enforcement mechanisms was to have the Indian tribe sign a waiver of its sovereignty rights? Number 0553 MR. USERA replied, "No." That did not impinge on this at all. The tribe could be required to collect the tax whether or not there was sovereignty. Number 0562 CHAIR JAMES asked Mr. Usera if that method would be at its source of purchase? She asked Mr. Usera to provide some instances of examples of how that would be done. Number 0572 MR. USERA replied the normal method was the distributor placed a stamp on the package of cigarettes and paid a tax for that stamp. The most recent case in New York ruled that the sellers of cigarettes on Indian reservations were required to obtain a state certificate that allowed them to make an exempt sale. There was a regulation in place in New York that allowed the state to impose a probable demand figure, or an estimate of tax free sales. The other cigarettes sold would already have the tax paid prior to their receipt. There were other permutations, but, the before described one had already been blessed by the United States Supreme Court. Number 0666 BOB BARTHOLOMEW, Deputy Director, Income and Excise Audit Division; and Legislative Liaison, Department of Revenue, was the next person to testify. He stated the division had talked to the state of Washington to explore their experiences regarding this issue. In Washington there were 26 official Indian reservations that sold tobacco products. Currently, 16 of those Indian reservations were cooperating with the state by filing tax returns, collecting taxes, and making payments. The other 10 Indian reservations were not as consistently cooperating with the state. The state was continuing to work with those 10 Indian reservations to improve the situation, however. Number 0742 CHAIR JAMES stated she read that Oklahoma was the most successful state in getting the waivers of sovereignty. She asked Mr. Usera if he found that as well? Number 0751 MR. USERA replied he did not see any waiver of sovereignty. He reiterated the Supreme Court said that sovereign immunity did not stand in the way of the state collecting valid taxes. Therefore, sovereign immunity did not impinge on this question. If it impinged at all, it was further down the road in terms of enforcement. A state, for example, could not sue an Indian tribe for not collecting the taxes. There were other mechanisms, however, in place that were permitted. Number 0782 REPRESENTATIVE ETHAN BERKOWITZ asked Mr. Usera what the enforcement mechanisms would be in Indian country? Number 0821 MR. USERA replied they ranged. He cited the Washington State vs Confederate Tribe of Colville Indian Reservation case of 1980, whereby the state of Washington confiscated the non-taxable cigarettes on their way to the reservation because it had refused to collect the taxes. Therefore, combining the New York ruling and the Colville case holding, a mechanism could be to allow a certain number of non-taxable cigarettes to a certain group, while confiscating them if the tribe did not cooperate. This, however, assumed that there would be a problem in collecting the taxes. Number 0873 CHAIR JAMES wondered if the reservations could get their cigarettes from a distributor that was not from the state, for example. Number 0913 MR. USERA replied it was possible. CHAIR JAMES stated somebody could be crooked if they really wanted to be. MR. USERA stated there was a way around just about everything. CHAIR JAMES replied she understood. That was the challenge before the committee. Number 0925 REPRESENTATIVE MARK HODGINS asked Mr. Usera if military sales were exempt from state taxes? MR. USERA replied, "Yes." REPRESENTATIVE HODGINS asked Mr. Bartholomew what portion would be military sales? MR. BARTHOLOMEW responded the division was in contact with the Department of Military Affairs located on Elmendorf Air Force Base in Anchorage. Military sales in Alaska were equivalent to non- sales according to testimony last year. This year the sales were about 40 percent according to the Department of Military Affairs. The division showed it was 8 percent of the total sales of cigarettes in the state were taking place on the military bases. In November of 1996, the President passed an administrative action that required all the military bases in the United States to stop subsidizing cigarettes and to go to the market price less the tax. This would be a significant higher price than what they had been paying. He did not have the price before the administration action, however. Number 1038 REPRESENTATIVE HODGINS asked Mr. Bartholomew if the division could speculate on how much the military sales would expand because of the tax? He wondered about the individuals who had access to the bases, but were not utilizing their privilege now. Number 1061 MR. BARTHOLOMEW replied the fiscal note asked for a half-time auditor to focus on the tobacco tax. Furthermore, the division was hoping to establish communications with the Department of Military Affairs to monitor the sales activity to see if there was a change. He explained the Department of Defense in Hawaii implemented tighter restrictions when its tobacco tax was raised. It now only allowed one carton of cigarettes to be sold instead of four. Number 1142 REPRESENTATIVE HODGINS asked Mr. Bartholomew if the information on the fiscal note anticipated smuggling, the prevention of smuggling, and the law enforcement end of it? Number 1155 MR. BARTHOLOMEW replied he could not speak to the law enforcement end of it. The division did not expect an increase in cost, administratively. Therefore, the fiscal note addressed solely the compliance end of it. The half-time auditor position asked for in the fiscal note would work 100 percent on compliance. The division would call upon the Department of Law and the Department of Public Safety if criminal activity was discovered. Number 1212 CHAIR JAMES asked Mr. Bartholomew if the state had a tax stamp now? MR. BARTHOLOMEW replied, "No." There were five states that did not place a state stamp on cigarettes. The division was trying to get information on that process to see if it made sense here in Alaska. Number 1235 CHAIR JAMES asked Mr. Bartholomew if the division included the cost of regulations in the fiscal note? MR. BARTHOLOMEW replied the division did not include the cost of regulations in the fiscal note. The division felt the additional regulation activities would fit within its current operating budget. However, there were additional compliance issues that would arise that would require additions to the statutes. Number 1288 CHAIR JAMES believed there needed to be some identification on the cigarettes indicating that the tax had been paid for enforcement purposes. Number 1302 MR. BARTHOLOMEW responded the division was looking at that. The division would want that written into statute. More information was needed before action, however. Number 1326 CHAIR JAMES replied some of those decisions should be legislatively made as opposed to regulatory made so that the people would be more knowledgeable about what was happening. Number 1346 REPRESENTATIVE HODGINS asked Mr. Bartholomew, if this tax was passed today, when would this process become efficient? How long would it take for the Administration to come forward with the necessary regulations? Number 1370 MR. BARTHOLOMEW replied the division was now looking at what needed to be put into statute as this bill moved into the next committee. It would be necessary to look at the emergency regulation process that had a 30 day window. And, where necessary, the division would expedite the process to try and coincide with the increase in the tax. He declared, recommendations would probably be made in the next few weeks as more information from other states was obtained. Number 1426 CHAIR JAMES stated there were other tobacco related bills that were moving through the legislature. She anticipated a piggyback that would not necessarily tie to this issue. Number 1446 REPRESENTATIVE BERKOWITZ asked Mr. Bartholomew what sort of recommendations were the Administration contemplating? Number 1456 MR. BARTHOLOMEW replied the Administration was looking into the state stamp, and how out-of-state wholesalers and mailers were handled to minimize inappropriate sales. The Administration was also furthering its communication and establishing a relationship with the military bases. A list of compliances had not been created at this point, however. Number 1512 REPRESENTATIVE BERKOWITZ commented a current tax was in place. He asked Mr. Bartholomew what was the current tax collection mechanism? Number 1528 MR. BARTHOLOMEW replied there was not a position that focused solely on cigarette compliance. The division focused on the higher dollars and monitored the sales and tax volumes, and there had not been a change for the past two years to three years. There had not been a lot of enforcement. That was the impetus to ask for funding for an auditor as stated in the fiscal note; to prepare for the potential avoidance. Number 1571 REPRESENTATIVE BERKOWITZ asked Mr. Bartholomew if there were rates of non-compliance given the current tax? Number 1578 MR. BARTHOLOMEW replied the division did not have any indication that there was non-compliance. No one had stepped forward or claimed any inappropriate sales to protect his area of sales. And, the division had not seen any decrease in tax revenues. Therefore, the division assumed there was a high level of voluntary compliance. That was how most tax programs started. Number 1616 REPRESENTATIVE AL VEZEY asked Mr. Usera how many tribes were in Alaska? Number 1630 MR. USERA replied there were about 225 recognized tribes. Number 1634 REPRESENTATIVE VEZEY asked Mr. Usera how many tribes were in the rest of the United States? MR. USERA replied he did not have a clue. REPRESENTATIVE VEZEY asked Mr. Usera how many tribes could a person belong to under current Indian law? MR. USERA replied he was not certain but believed the number was one. Number 1678 REPRESENTATIVE VEZEY asked Mr. Usera what the qualifications were to become a member of a tribe? MR. USERA replied case law indicated that there was a certification process to enroll into a particular tribe. REPRESENTATIVE VEZEY asked Mr. Usera how many tribes could a person be a member of in Alaska? MR. USERA replied he understood the number to be one. REPRESENTATIVE VEZEY asked Mr. Usera what were the requirements for enrollment into a tribe in Alaska? MR. USERA replied he did not know. REPRESENTATIVE VEZEY asked Mr. Usera what prevented in law from a person to enroll into a tribe that he so desired? MR. USERA replied he did not know. REPRESENTATIVE VEZEY asked Mr. Usera what prevented in law from a person in Alaska from becoming a members of more than one tribe? MR. USERA replied he did not know. He was willing to research the question and get back to him, however. REPRESENTATIVE VEZEY commented the state was looking at the issue of tribal sovereignty. It could be possible that the majority of the citizens could qualify as a member of these sovereign tribes, or it could be a minority. He could see considerable problems of trying to collect the sales tax when a significant portion of the population was exempt. He felt this tax was going to create a major black market industry. There were 230 tribes in Alaska and under current law there was no limit as to how many tribes a person could belong to, and there was no definition of who was a members. It was who the tribe said it was. This tax could give economic incentive to increase the movement toward sovereignty, and this was a major problem to face. Number 1800 MR. USERA commented the Alaska Native Claims Settlement Act (ANCSA) made provisions to identify who was eligible to participate in a Native corporation. He agreed the economics could be connected to the participation in a Native cooperation. Number 1826 REPRESENTATIVE VEZEY stated the attorney general had testified before the House State Affairs Standing Committee and he indicated that membership to a tribe was anyone that the tribe said was a member. That was the sole ground of qualification of membership in the state of Alaska. There was also no limit to the amount of tribes a person could belong to because there was no choice involved. "If they say you're a member, you're a member," he stated. Therefore, it appeared this tax would create an economic incentive to increase the movement towards sovereignty. Number 1863 REPRESENTATIVE IVAN IVAN suggested to the Chair that the committee invite the federal officials that oversaw the enrollment process to clarify the questions and fears brought forward today. Number 1882 CHAIR JAMES stated she appreciated the comment of Representative Ivan. She agreed these were valid concerns and questions. It was an issue that would require balance. Number 1917 MR. BARTHOLOMEW stated the division was working and communicating with the entities to help prevent bootlegging. The division did not assume that there was going to be a massive bootlegging problem. There was a difference between tax free sales on Indian land and bootlegging. He reiterated the division thought it would be able to work with a lot of different organizations to ensure compliance. Number 1967 CHAIR JAMES said she agreed with Mr. Bartholomew that the issues were different, but she asserted they were also related. Number 1973 REPRESENTATIVE BERKOWITZ called bootlegging an economic crime. He asked Mr. Bartholomew what the cost of cigarettes were in Canada as opposed to the United States? Number 1990 MR. BARTHOLOMEW replied the current tax in Alaska was 29 cents, in the Yukon Territory it was $1.16, and in British Columbia it was $1.56. Even under the proposed tax the cost of cigarettes in British Columbia would still be higher. Number 2019 REPRESENTATIVE BERKOWITZ stated there was not much economic incentive to come over to Canada. Prior testimony also indicated that there was not much incentive to come through the Indian country through applied restrictions, or through classic smuggling operations. He asked Mr. Bartholomew if he knew about any classic smuggling operations? Number 2037 MR. BARTHOLOMEW replied, "Not to my knowledge." Number 2042 REPRESENTATIVE HODGINS requested a revised tax revenue statement taking into consideration the military, the legitimate sales with the Natives, and the state sales. Number 2065 MR. BARTHOLOMEW asked for clarification from Representative Hodgins regarding his request. REPRESENTATIVE HODGINS replied he wanted the total revenues. He explained when this was originally brought forward the tax revenue figures were about $40 million to $44 million. He would like to see what the projected revenues would be now that it was understood that the military and the Indian country would not be involved. He wondered if this would generate the $40 million as expected. Number 2102 MR. BARTHOLOMEW replied the current fiscal note excluded most of what Representative Hodgins spoke to now. It was the current taxable sales. It excluded the military and any other exemption or tax-off sale. It was a projection based on the current taxable items. He would go back to the department and see if there were any other adjustments that could be made for compliance losses. The department already took 18 percent off consumption due to the price increase. The state of Washington, he explained, experienced significant revenue increases. He reiterated he would go back to the department and talk to them, but he did not expect much of a change. Number 2158 REPRESENTATIVE HODGINS also requested to see the work sheets. Number 2163 REPRESENTATIVE VEZEY asked Mr. Bartholomew what percentage of cigarette sales took place on military reservations? Number 2173 MR. BARTHOLOMEW replied the division estimated about 9 percent of the taxable sales took place on military reservations. The state last year collected tax on 52 million packages of cigarettes. Elmendorf Air Force Base estimated there were about 4.4 million packages of cigarettes at the high end being sold on all military installations in Alaska. Number 2208 REPRESENTATIVE VEZEY believed that later testimony would indicate higher numbers. He asked Mr. Bartholomew if he knew how many consumers in Alaska had the privilege of going onto a military reservation and purchasing items from the commissary? Alaska had the highest percentage of military veterans of any state in the union. He cited his neighborhood contained about 40 percent to 50 percent veterans. Most did not use the commissary privileges because they got better economic buying power at the community stores except for one item, cigarettes. Number 2240 MR. BARTHOLOMEW responded currently Alaska statutes exempted sales on military installations from taxes. The division was not 100 percent sure if that exemption could be removed. He did not say that was being proposed, but it was an option. That was a very big issue, but it could eliminate that compliance problem. Number 2267 CHAIR JAMES commented she would not do anything that the veterans did not want her to do. She had witnessed an entire gallery of veterans on the floor of the House of Representatives. Number 2277 REPRESENTATIVE KIM ELTON commented he understood the concerns of the sales on the military bases, but one of the reasons for the tax was to curtail teenagers from smoking and the children would not be able to go onto the bases to shop. Number 2297 CHAIR JAMES stated she appreciated Representative Elton for bringing the committee back on track. However, it was appropriate to review the possible unintended consequences. CHAIR JAMES asked the committee members if they could stay longer today to hear the teleconference testimony? Number 2342 REPRESENTATIVE VEZEY replied he could stay a little while. He asked the Chair if there would be any testimony on Saturday? CHAIR JAMES replied she did not schedule a meeting on Saturday, February 1, 1997. Number 2377 REPRESENTATIVE VEZEY commented that a couple of his constituents requested to testify on Saturday, February 1, 1997. CHAIR JAMES apologized for canceling the meeting on Saturday. She did not know that before canceling the meeting. Number 2393 REPRESENTATIVE HODGINS stated he had a 10:00 a.m. meeting that he was chairing so he would have to leave early. Number 2398 REPRESENTATIVE ELTON stated he also had a committee conflict. Number 2411 REPRESENTATIVE DYSON stated he had appointments. CHAIR JAMES opened up the meeting to public testimony in Juneau and to the teleconference network. Number 2440 MARK D. SMITH, Director, National Coalition Against Crime and Tobacco Contraband, was the first person to testify in Juneau. He announced he was also a task force member on the American Legislative Exchange Council Tax Committee, and was a tax issue manager for the RJ Reynolds Tobacco Company. He had worked on the issues of tobacco smuggling and contraband for the past four years and had worked with some of the top people in the world on these issues. He cited Ron Stemmler (ph), former Assistant Commissioner of the Royal Canadian Mounted Police, as an example. TAPE 97-4, SIDE B Number 0001 MR. SMITH explained the coalition had conducted a lot of studies exploring how contraband was brought into the country. He cited studies had been conducted in California, Michigan and a national study in 1994 on how contraband was smuggled into the country. The coalition had also put together a law enforcement manual, that he distributed to the committee members. He explained it was being used currently by the Bureau of Alcohol, Tobacco and Firearms, the United States Customs and other tax and law enforcement officials throughout the United States. It was the best guide on how to stop smuggling. He also urged the committee members to look closely at the state of Washington as an example of Native American involvement in tobacco sales. Washington reported that 15 percent to 20 percent of the entire market was sold through the Indian reservation system. In the state of New York tax collection and enforcement were a terrible problem. There was concern of blood shed. In past years when the state tried to enforce taxation issues surrounding sovereignty the New York State throughway was blocked off and helicopters were shot at. He did not believe that Native Americans would act like that everywhere, but the Native Americans in New York had a lock of 15 percent to 20 percent of the entire market. It was a very lucrative business and attracted all kinds of unsavory characters. Furthermore, he referred to an article in the San Francisco Chronicle dated January 13 and read a passage that suggested smuggling grew 250 percent from 1980 to 1984 in the United States due to tobacco taxes. He suggested that the committee members talk to Robert Shepherd, chief law enforcement official for the revenue department in New York, regarding the tax stamp. New York discovered that within three weeks of establishing the stamp, officials were discovering counterfeit. The tax stamp was not a solution to the problem of a high tax. Furthermore, a study that he came across indicated that 40 percent to 45 percent of the entire market in the state of Alaska was in the hands of the military today. He stated, if an illegal market was going to emerge in the state of Alaska because of the high tax, the people who distributed the cigarettes would not ask for age identification. Number 0195 REPRESENTATIVE BERKOWITZ asked Mr. Smith how much revenue the RJ Reynolds Tobacco Company generated from Alaska? Number 0202 MR. SMITH replied he did not know. He would find out and get back to him. Number 0209 REPRESENTATIVE BERKOWITZ asked Mr. Smith how much revenue the RJ Reynolds Tobacco Company expected to loose from the implementation of the tobacco tax in Alaska? Number 0218 MR. SMITH replied he could not give a specific answer to Representative Berkowitz's question. MR. SMITH asked the question, "Why would manufacturers care if there's smuggling between states among Indians?" It was all one cigarette market to the manufacture. He explained a manufacture did not like to see smuggling and organized crime because business was disrupted, and it did not want to deal with illegal activity. Furthermore, the manufacturers were concerned about drivers of the products being hit upon. An 18-wheeler held $2.5 million worth of cigarettes. That 18-wheeler could be hijacked and the manufacturers were concerned about potential violence against the drivers. Lastly, the manufacturers were concerned about the youth issue. He said, "Every time a youth is seen smoking a cigarette in this country, it is the manufacturers who are blamed for it." A tax increase would definitely put more cigarettes into the hands of kids because the access would be greater and it would not require age identification. He cited in 1994 Canada lowered its taxes because of the huge problem of smuggling. He cited one-third of all the cigarettes were being smuggled. As a result of the decrease in the tax, smuggling was wiped out, and the health minister, Diane Merlou (ph), stated that by lowering the tax it would actually reduce the consumption among the youth. He cited that statement was made in the MacLean's magazine, dated February 21, 1994. He concluded, the raising of a tax did not discourage consumption, it only encouraged a different buying pattern among the consumers. Number 0333 REPRESENTATIVE ELTON stated by using the logic of Mr. Smith, "We can lower the crime of smuggling by legalizing marijuana too." Number 0339 MR. SMITH replied that was an issue he knew nothing about. Number 0363 DAVID L. WILLIAMS was the next person to testify in Juneau. He read the following statement into the record: "I am here to speak against the tobacco tax. "Using taxation powers as a tool of government to accomplish ends that are essentially moral in origin is a mistake. If we continue to use government as a substitute for the moral teachings of parents, churches, and schools, how can we realistically expect that our Republican philosophy, that seeks to reduce government intervention in our lives, can be attained? We can't, of course. "And what then would be the result of the failure of elected Republicans to live up to their publicly stated philosophy, and their promises, their fiscal plan without new taxes? "The evidence is clearly understood by many civil libertarians and becoming more clear to the general public; decades of incremental increase of administrative control over the population is causing a significant breakdown of respect for our government and consequently, for our country. "Where once resided pride and love and trust, now beats suspicion and disbelief, and distrust. "We have here a circumstance where special interests are again attempting to rent government in the pursuit of their goal, the crafting of a tax on the misguided premise of protecting youth from self-imposed harm -legislative intrusion into an area of individual rights and responsibilities. "Because we use taxes and laws to protect society against criminal transgressions does not mean that government has the duty to protect the individual from transgressions against himself, for it does not. "The vast quantity of scientific information collected on smoking is done by private institutions and organizations that may not always have the best interest of the American people at heart, or may overlook those interests in favor of greater funding opportunities, and the pursuit of their own specialized goals. "This use of science to accomplish political ends is corrupting our mighty scientific institutions and organizations. When governments accept those suspect results that is cause for alarm amongst the rest of us. "We have reached the stage where Science prevaricates in the pursuit of special interest goals, and the general populace, long suspecting this, no longer believes everything science says. Trust, once held sacred of science, now lays at the feet of an industry engaged in open warfare against the individual rights of the citizen. "Certainly smoking is harmful, to some degree, differing from person to person, and statistically, from country to country. But people also die of overeating, and drinking, and lack of exercise. Are these the next Moral Imperatives to drive our tax code? "Once the role of government has been firmly established in regulating the personal smoking behavior of its citizens, the next easy step is to begin regulating other forms of personal behavior, deemed offensive to the majority. Soon, books, movies, videos, guns, deemed offensive, will be banned, as well. "Is this the precedent you wish to set for future legislatures, for future Republicans? That the noblest deed done in 1997 was to increase a tax by 345% for people's own good, so that a handful of youth who flagrantly violate the law each time they smoke a cigarette, will no longer smoke? "It seems to me that the Legislature is charged with upholding the founding principles of our democracy, that of a limited government doing for the people that which the people cannot do for themselves, and nothing more. "Thank you for your time and attention." Number 0529 ROSIE T. SLOTNICK was the next person to testify in Juneau. She stated the adults and law makers had already decided that children under the age of 19 could not decide if they wanted to smoke or not. The $1 tobacco tax would truly be a preventative measure because it would target a group that had little money-children. It also would help sever the link between smoking parents and smoking children. She explained many of her acquaintances got their cigarettes from their parents and the tax would render it too expensive for parents to continue to look the other way. Number 0579 REPRESENTATIVE VEZEY asked Ms. Slotnick if she had ever been around other illegal drugs in her peer group? Number 0607 MS. SLOTNICK replied the one illegal drug that she had been around the most was cigarettes. She had not been around any hard drugs or marijuana, but "cigarettes were everywhere, she declared. Number 0622 REPRESENTATIVE VEZEY asked Ms. Slotnick if she had been exposed in her peer group to the use of marijuana? Number 0629 MS. SLOTNICK replied, "Maybe." But, she would not notice. She did not know a lot about marijuana. Number 0633 REPRESENTATIVE VEZEY asked Ms. Slotnick if she was in a position to comment on what was the price of a marijuana cigarette? MS. SLOTNICK repled, "No, I wouldn't." Number 0650 HANNAH SLOTNICK was the next person to testify in Juneau. She said she thought she represented a large part of her generation. She explained she walked to school everyday and saw people smoking all around her. They either bought or borrowed their cigarettes. She believed the tobacco tax would greatly reduce the number that started smoking. Her peers could not see that it was ruining their health. She reiterated the tax would give them a reason to not smoke and a reason to never start to smoke. This tax would benefit her whole entire generation. Number 0698 CHAIR JAMES asked Ms. Slotnick why she did not smoke? Number 0717 MS. SLOTNICK replied she was a member of the Teens Against Tobacco Use organization. The organization taught elementary school children about the dangers of smoking. Her mother was also a public health nurse who taught her about the dangers of smoking. She also knew about the long-run effects of smoking. Number 0742 REPRESENTATIVE ELTON pointed out to the committee members that written testimony was also available from Ms. Slotnick. Number 0758 GEN GAYNE-HAWES was the next person to testify in Juneau. She announced she was a student at Juneau Douglas High School. She explained everyday at school she felt the presence of tobacco. It was mentioned, smelled and seen. This fact was ironic, she said, because teenage suicide made the Time magazine and was the topic of conversation for days. But, whenever teenagers smoked, "We have to fight tooth and nail to pass the tax that might stop them." She declared her support for the tobacco tax. Smoking was a form of suicide. It was a self destructive behavior that led to death, and its many victims started when they were young. Each day 3,000 kids smoked their first cigarette. Each year tobacco killed more people then AIDS, alcohol, fires, murder, heroin, car accidents, and suicide combined. She did not want this to happen, "And, I don't think you do either," she said. The cycle of addiction began with teenagers being tempted. Kids start to smoke not adults. Estimated indicated that this tax would reduce teen smoking by 32 percent. It was not a be all or end all solution, but it was a step that needed to be taken for everyone that was addicted and for everyone who might be addicted in the future. We need a road block. She asked the committee members to support the tobacco tax. Number 0848 CHAIR JAMES said she had heard Ms. Gayne-Hawes last year testify and was very impressed. Number 0876 LAEL HARRISON was the next person to testify in Juneau. She was representing the majority of the kids at the Juneau Douglas High School who had to see people smoking and chewing tobacco. Yesterday, she explained she conducted a survey among her peers. Invariably they said they supported the tax. At the end of the day she collected 44 signatures in favor of the tobacco tax and 1 against it. She knew that if she had organized herself better she would have gotten more signatures. Nevertheless, this showed the support of the high school. It would show that the legislators cared about their health from smoking. It would make them think twice. It would make them see that they would get into financial trouble. This would not just affect the kids at the high school, it would affect people of all ages. There were a lot of adults that would have to cut down on the amount that they smoked due to financial reasons. This would probably keep them alive another five years to ten years. She stated her support of the tobacco tax. Number 1016 DAVID JOB was the next person to testify in Juneau. He was a practicing respiratory therapist and volunteered with the Teens Against Tobacco Use in the high school. The prior teen that testified just about said it all. There was no doubt in his mind that a $1 additional tax was needed. It did encourage all ages to quit smoking, but the biggest affect would be on the younger people. Studies showed that money talked and the teens would walk away from smoking. It would also make alternatives to smoking such as nicotine patches seem more affordable. It would be cheaper to stop smoking. In his profession he treated the effects of smoking. He treated lung cancer, chronic bronchitis, and emphysema. He also lived near the high school, and "I shudder as I see the next generation of smokers starting down tobacco road." "Please make sure that road is very expensive to go down," he asked. Number 1092 REPRESENTATIVE VEZEY asked Mr. Job what percentage of his patients were smokers? Number 1112 MR. JOB replied he dealt with a lot of different types of patients. Almost all of his patients that repeatedly returned with pulmonary problems were smokers. He did not know a specific number, but he stated the majority of his patients were smokers. Number 1151 REPRESENTATIVE VEZEY asked Mr. Job if he saw different patterns between cigar, pipe and cigarette smokers in his profession? Number 1166 MR. JOB replied he saw patterns, but as a respiratory therapist, he would see the ones that inhaled the products. Therefore, he mostly saw the effects from cigarette smokers. Number 1184 REPRESENTATIVE DYSON asked Mr. Job if he had a significant population of patients that had respiratory problems from second hand smoke or so called environmental smoke? Number 1196 MR. JOB replied anyone that had been exposed to cigarette smoke would have problems. Studies indicated that the effects were wide spread. Number 1227 REPRESENTATIVE DYSON asked Mr. Job if in his client population did he have anyone with lung cancer of emphysema that was caused by second hand smoke? Number 1236 MR. JOB replied he had not seen anyone with emphysema from second hand smoke. There were health consequences, however. Number 1265 ROBERT DICKSON was the first person to testify via teleconference in Anchorage. He commented all of the debate, discussion, and testimony addressed cigarettes, it did not address cigars and pipes. The bills called for a 100 percent tax on all cigars and pipes. He asked the committee members to exclude these because the health testimony did not apply or support cigar and pipe smoking and teenagers did not use cigars or pipes. He was also concerned that the tax would put a lot of cigar and pipe stores out of business. Number 1447 REPRESENTATIVE CON BUNDE explained information regarding the health effects of cigar and pipe smoking was being prepared for distribution now. Number 1470 JENNIFER LOUDON was the next person to testify via teleconference in Anchorage. She shared with the committee members a story of her experience of a family member struggling with lung cancer. She cited in 1993 over 1.9 million people were inflicted with lung cancer and 13,000 people died as a result of a life time of smoking. The vast majority of research supported that adults did not start smoking, but teenagers did. Alaska must stop kids from becoming addicted. "Spare Alaskans from suffering the kind of painful death caused by tobacco which I witnessed, and please help Alaskan families from having to watch their loved ones taken away from them in a horrific manner," she stated. Number 1631 PAUL BARRETT was the next person to testify via teleconference in Fairbanks. He stated he was a conservative Republican and he favored the tax. He asked, to those who challenge the efficacy of the tobacco tax, why was the tobacco industry so opposed to the tax if it would not reduce consumption? He stated, to those that believed the tax would target a small group of Alaskans, he believed the tax was a self-exempt tax, and everyone had the right to exempt himself. Furthermore, at the current level of medical cost for every $1 the state received in tax revenue, $7 was spent on tobacco health care related costs. In Alaska the direct medical cost was more than $45 million a year compared to the total cost of the Alaskan economy at more than $127 million. Moreover, non- smokers paid three-fourths of all public expenditures for smoking related problems. It was time to pass the tobacco tax. He declared, "It will work, it's the right thing to do, it's the smart thing to do, and it's the democratic thing to do." Number 1772 CLAUDIA ANDERSEN was the next person to testify via teleconference in Fairbanks. She announced she was a registered nurse and the mother of two children. She believed the tobacco tax was the single most important variable in deterring the purchase of cigarettes by teenagers. She felt that adults did not start smoking, but that teenagers did. She was exposed to every type of cancer due to her work. It was rare that she did not take a history of a patient that was not a smoker. She reiterated smoking cigarettes was deadly and a tobacco tax would save lives. Number 1879 LOIS IRVIN was the next person to testify via teleconference in Homer. She thanked the committee members for providing a forum for expression. She declared her support of the tobacco tax. She agreed with the previous testimony, especially that from the school children. Number 1935 DANIEL BOONE was the next person to testify via teleconference in Homer. He thanked the committee members for allowing him to speak this morning. He asked each of the members to support the tobacco tax increase. The diseases linked to tobacco use caused Alaskans millions of dollars each year in medical expenses, reduced productivity and lost time on the job. He also mentioned the pain and suffering this caused to family and friends. Recent statistical analysis indicated 18,000 young people would become smokers and die of tobacco related illnesses-cancer, heart disease or stroke. Most smokers started when they were teenagers. It was estimated that the tobacco tax would spare 5,700 young Alaskans from this tragedy. This was only one part of the answer, however. He also believed in a strict enforcement in the statute that prohibited the purchase of tobacco products by those under the age of 19. Everything must be done to keep tobacco products out of the hands of young people. He shared with the committee members the story surrounding the death of his brother who was a smoker. He asked the committee members again to support the tax. It was not the only answer, but it was an important first step. Number 2102 JUDY DOWNS was the next person to testify via teleconference in Kenai. She announced she worked with the Kenai Peninsula Borough School District as a safe and drug free school specialist. The majority of Alaskan smokers began smoking between the ages of 10 years and 20 years old. The Kenai Peninsula School Borough District administered a youth-risk behavior survey in 1995. The survey indicated that among the high school student, 33 percent were current cigarette users, and 20 percent were frequent users. Among the middle school students 24 percent were current cigarette users, and 7 percent were frequent cigarette users. Furthermore, she was very active with various health associations in Kenai and had witnessed death and pain as a result of tobacco use. It would be irresponsible not to pass the $1 per pack tax. She would support and even higher tax because the debate really boiled down to profits for the tobacco company or saving lives. She was more interested in saving lives in her community. Number 2293 CHAIR JAMES asked Ms. Downs if she saw the education program from the state of Michigan on television last night? MS. DOWNS replied, "No." Last night she was in the process of writing a grant for alcohol and tobacco education. CHAIR JAMES said the program was excellent. The programs started with young children and taught them how to not get involved with tobacco, alcohol and drugs. The program was reducing the use of tobacco, alcohol and drugs by 50 percent and it only cost $8,000 per year. MS. DOWNS asked Chair James what network the program was on? CHAIR JAMES replied she could not remember. MS. DOWNS stated Chair James brought up a very good point that the tobacco tax was only one small component of this issue. TAPE 97-5, SIDE A Number 0035 BARBARA WATER was the next person to testify via teleconference in Kenai. She did not smoke but had spent 43 out of 47 years living with smokers. She shared with the committee members how her husband started smoking. The cigarettes were available to him whenever he wanted them. A tax would not have deterred him because he was hooked and he needed a cigarette, she stated. Her daughter now smoked and was hooked. "There is probably no tax too high that would stop her at this point," she declared. She would quit when she had a need to. The cost would not be that need. Therefore, no tax would stop a youth from smoking. The teens she knew had more spending money than she did because they did not have any bills. They could spend their money how they chose to. The age law preventing teens from smoking did not deter them from obtaining tobacco products whenever they wanted. She asked the committee members to rethink their position on this matter. She did not see how a tax would deter a teen from smoking. Number 0228 DEBORAH WATTS, Executive Director, Alaskans for Drug Free Youth, was the next person to testify via teleconference in Ketchikan. The Alaskans for a Drug Free Youth supported the tobacco tax increase. At this point in time approximately 25 percent of school age youth had tried or were currently using tobacco products. It was a known fact that an increase in the tobacco tax indeed did decrease the use of tobacco. The tobacco tax could possibly save up to 25 percent of our youths. The teens that she talked to at the high school supported the tax as well. She was also organizing a teen counselling tobacco workshop and within the first two hours 18 kids were willing to volunteer. Therefore, the Alaskans for a Drug Free Youth felt that the adults should follow through with what the majority of the children wanted. Number 0344 MARSHA MAROELLI, Assistant Project Director, Bering Strait Community Partnership, was the next person to testify via teleconference in Nome. She explained last year the partnership conducted a survey with the University of Alaska, Anchorage and the Department of Sociology. The adult survey indicated that the mean percentage of adults smoking was 55 percent in the region, and some villages reported the mean as high as 83 percent. The youth survey indicated about two-thirds of the youth had tried cigarettes. It was also found that many of the young smokers had someone else purchase cigarettes for them. In many cases the purchaser charged $1 per pack to buy them for the youth. Therefore, the tax increase plus the charge would increase the price of a package to $4.50. She also explained that it was acceptable for many of the youths to borrow cigarettes from other smokers until they were told to buy their own. The tobacco tax would price cigarettes out of the reach of many young smokers. She agreed with prior testimony that indicated this was only one component in combating this epidemic. She also agreed that prevention, secession efforts and enforcement were other components. She reiterated a tax increase would create an impact, whereas, a tax reduction would reduce the impact. Number 0499 DUFFY HALLIDAY was the next person to testify via teleconference in Nome. He worked as a health educator, but would like to testify today from a personal perspective. He supported the tobacco tax because he believed it would discourage the youth from smoking and enforce the adult smokers to seriously consider if they wanted to continue to smoke. He shared with the committee members the death of his mother from cancer of the throat from smoking. That was why he supported the tobacco tax on a personal level. He hoped that the tobacco taxes could be directed or indirectly applied to the health related problems associated with smoking. He believed the proposed tax was a win-win situation by deterring the youth from smoking and by providing more money for the state. Number 0662 WILL SWAGEL was the next person to testify via teleconference in Sitka. Mr. Swagel was a smoker and a solid citizen. However, he declared, for the first time in his 15 years of living in Alaska, he was ashamed to say he was an Alaskan due to the tobacco tax. He wondered if anywhere else if there had ever been a 344 percent increase in the tax raised on anything. He said, "I think not. Not since the Boston Tea Party." Why? he asked. "Because you are willing to jump on the band wagon of popular opinion and impose a discriminatory tax on an unpopular group," he answered. He further wondered if the legislature would do this again with the issues of guns, furs, or alcohol for example. They were unpopular issues as well. The studies that indicated a tax would decrease the use of tobacco products among the youth, he wondered if those studies had been conducted in the United States where the possession of tobacco was already illegal. "I think not," he said. He discovered a package of cigarettes went for $5 on the street. The tobacco tax would encourage smuggling. He did not support the testimony that smuggling would not be an issue because Alaska only shared a border with Canada. He stated, "That's why illegal drugs never make it to Alaska, right?" That was not what made him ashamed of this tax, what made him ashamed was the meanness of this proposal. He moved to Alaska because it promised a freedom of frontier away from the social engineering prevalent in the lower 48 states. He moved to Alaska because the state's constitution guaranteed the right of the individual to make choices for himself without undue governmental interference. He stated he understood the efforts behind the tax. but, "if you want to be fair, double the tax, and use that money to educate smokers." A 344 percent tax increase on anything represented tyranny. Governor Knowles portrayed this tax as the straw to break Joe Camel's back. The only back that this law would break, he declared, was his along with the backs of other law abiding Alaskans. This tax allowed Governor Knowles and Joe Camel to walk hand in hand to the bank. Number 0862 REX GARVER was the next person to testify via teleconference in Sitka. He came from a long line of cigar, cigarette and pipe smokers. He worked with the youth in Sitka. He firmly believed that the tobacco industry targeted people under the age of 20 to begin using tobacco products. The arguments from individuals opposing the tax to keep government small generally worked for the tobacco industry or wanted to continue to feed their addiction at a lower cost. He explained he worked with the youth in Sitka that had already been busted for using tobacco products. They were all under the age of 19 and the majority were already addicted. He was passionate about this subject and hoped that the committee members were as well. Number 0969 KATHERINE LIMON, Member, Juneau Tobacco Prevention Network, was the next person to testify in Juneau. She worked with the at-risk teenagers at the high school. The majority of them were highly addicted to cigarette smoking and a majority of them would die as a result of tobacco use. She shared with the committee members that her aunt and grandmother died to cancer from smoking. Her grandfather was also in the early stages of emphysema. She also stated her younger sister was a smoker. Number 1027 CHAIR JAMES asked Ms. Limon why she did not smoke? Number 1032 MS. LIMON replied the main reason was watching her aunt die in the hospital and seeing how it affected the whole family. She watched her deteriorate everyday and she continued to smoke up until the day she died, practically. She also knew what it could do to a person. She was lucky to be a strong enough person to decide not to smoke, whereas, her sister was not. Number 1054 CHAIR JAMES asked Ms. Limon if she was exposed to cigarettes? Were her friends smokers? Did she have the opportunity to start smoking also? Number 1060 MS. LIMON replied, "No." Her mother was a smoker then quit. Her father did not smoke. Her siblings had all smoked at one point. She believed it was too much of a destructive behavior. CHAIR JAMES gave her congratulations to Ms. Limon and thanked her for testifying. Number 1090 BANARSI LAL, Director-Alcohol and Drug Abuse Program, Fairbanks Native Association Inc., was the next person to testify in Juneau. He declared his support of the bills that had been filed addressing this issue. He cited HB 1, HB 52, HB 65, SB 13 and SB 61. He was heartened by the fact that there was bi-partisan support. He referred to and summarized the findings in an analysis by the Department of Health and Social Services. He reiterated he supported all the bills that asked for a tax increase. He also supported the effort to put a certain percentage of the funds towards the schools to support construction. In Fairbanks there was a need for more school space. Furthermore, he believed that when the cost went up substantially and it started to impact a person's limited resources, the demand had to go down. He cited the country of India where there was a tremendous black market for essential commodities. When the people could not afford a product they found other means to meet their needs. It became a question of what a person could afford. Therefore, the demand would go down when a person could not afford it due to a tax increase. He also supported a means to find a way to put the money generated into education and prevention. He was concerned that the kids would try to switch over to another form of addiction. Therefore, prevention education was needed. He explained he also served as a member of the advisory board on alcohol and drug abuse. The board supported the efforts last year and this year as well. The board would meet again in early February and he hoped that they were going to forward another strong endorsement. Number 1405 KATHERINE MCCONKEY was the next person to testify via teleconference in Glennallen. In the Glennallen area kids tried tobacco as young as six years of age. She conducted a freedom from smoking class of which contained five students at 15 years of age that had the desire to quit, but were addicted to chewing tobacco. The adults were also buying cigarettes for the kids here in Glennallen. There were several cases of cancer as a result of tobacco in the area as well. She strongly supported the tobacco tax and stated she would like to see it applied to the health care of those addicted. Number 1497 JAN MARQUISS was the next person to testify via teleconference in Anchorage. He was a long time resident of Alaska. He was president of a company that distributed candy and tobacco products based in Anchorage. He agreed it was time to end the illegal use of tobacco by minors. However, he believed that there were other ways to accomplish this other than by raising the price. He cited the increase alone for one month would be $185,000. He mentioned the proposed tobacco tax increases in Anchorage and Fairbanks and commented nobody had mentioned them today. It was possible to avoid the borough taxes. It was being done right now for either resale or reuse. Therefore, another tax would open the doors for users to find other means of obtaining cigarettes. He declared his concerns of the seriousness of the effects of smuggling and tax evasion on his business and his customers. Number 1663 PAT SENNER, Representative, Alaska Nurses Association, was the next person to testify via teleconference in Anchorage. The association commended Representatives James and Bunde for introducing legislation to increase the tobacco tax. The association in particular favored an increase on cigarettes and chewing tobacco. She was often asked about nurses that were also smokers, and how they could continue to smoke since they worked with people suffering from the adverse consequences. She explained they either started in high school, in the military or in nursers training when it was discovered that they got more breaks. This clearly showed the illogical side of an addiction. The association was committed to working with other organizations to prevent smokers from obtaining cigarettes from other sources such as the military bases. She reiterated, in conclusion, the association supported HB 1 and HB 52. Number 1760 BILL BOUWENS was the next person to testify via teleconference in Anchorage. He was an Alaskan Native and a long-time resident of Anchorage. He reminded the legislators that the government did have the right to regulate health and safety issues. He was by profession a tobacco educator at the Alaska Native Medical Center. Therefore, he saw the tail end of people with addictions. It was not the addiction to nicotine that killed smokers, it was the other by-products, such as, tar and carbon monoxide. He was also concerned about the effects of second hand smoke on the Alaskan Native children. In life, he said, there were not very many choices, but when it came to tobacco there were two choices-life or health. He urged the legislature to pass the $1 tobacco tax not to punish adult smokers, but to simply prevent children from starting to smoke. Number 1863 VEVA BECKER was the next person to testify via teleconference in Fairbanks. She was a tobacco educator for the American Cancer Society. She supported and promoted the $1 tax. The average age to try smoking was 13 of which many became daily smokers by the age of 14. She would rather see that money spent on cigarettes go towards clothes, for example. She was also concerned about the serious problems of their underdeveloped lungs creating lung cancer and other respiratory problems. The tobacco industry spent per year $6 billion on advertizing. She stated, "They must promote to keep this business going. They need kids to smoke." She believed the tobacco tax could also help educate. There were more people signing up for programs to help them to stop smoking. Nicotine was the hardest drug to overcome. It was important to help the parents stop smoking to help the children. This was a serious problem in the Interior of Alaska. She felt the tobacco tax would help the children. Number 2034 MARGARET WILSON was the next person to testify via teleconference in Fairbanks. She was a mother and a registered nurse and worked for the Tanana Chiefs Conference Inc.. A presentation was recently given in a village to 5th graders of which several dumped their cigarettes into the trash can afterwards. She asked, "Did I think they quit? No, these young children are addicted," she replied. Statistics showed that 41 percent of Native boys and 32 percent of Native girls used spitting or chewing tobacco weekly. This created a higher rate of cancer in the Alaskan Natives, especially the women. She also stated the younger a person started to quit, the harder it was to quit. She supported the $1 tax on tobacco because it had been shown that it would deter young people from purchasing tobacco products. Number 2117 KIM GREER was the next person to testify via teleconference in Homer. She was a health care professional and taught tobacco education in the schools. There were many that supported this tax, but could not be here because they worked during these hours, she stated. She urged the committee members to look at the evidence of the Center for Disease Control (CDC) and from C. Everette Koop, former surgeon general, and not to the tobacco industry. She shared with the committee members her father's struggle with emphysema. She said she felt very small against the tobacco industry with "all their money and power and influence and tactics." She reminded the committee members that this tax was about the children, their health, and their future. Research indicated that when the price went up, consumption went down. It was pure and simple. She asked that the legislature be proactive by saving lives and preventing suffering. She urged the committee members to move this bill forward. She trusted that they would find a productive place to put it. This could become an acceptable reason for the young kids to say no to smoking. Number 2222 MICKEY PICO was the next person to testify in Juneau. He urged the committee members to pass the $1 cigarette tax. He started to smoke when he was 17 years old. He paid only 23 cents per package at that time. He felt certain that if the price had been higher he would not have started smoking. He would have spent his money on other things. He did not feel the issue here was bootlegging and smuggling, but rather protecting young people from smoking. He stated Alaska would be in the forefront and other states would soon follow. He wanted Alaska to be the leader on this issue. Number 2280 BONNIE JACK was the next person to testify via teleconference in Anchorage. She called herself a political activist and she strongly supported an increase in the tobacco tax. She was also a mother and a grandmother, but more importantly she was the daughter of a mother who died of emphysema from smoking. Her mother was a registered nurse and a very bright woman, but she could never shake the addiction. She urged the committee members to tax this killer and to help prevent young people from starting this vile habit. She appreciated the efforts of Representative James and Bunde. The voters of Alaska strongly supported the tobacco tax even if it was not targeted. She strongly believed in a cost-causer, cost-payer. Therefore, increase the tax on the causers that had increased the cost of public health care. She also suggested looking into increasing the dollar penalty of an illegal possession of tobacco products by a teen. She reiterated she believed the tobacco tax would prevent a few people from beginning to smoke or even continue to smoke. Number 2396 BOYD MCFAIL was the next person to testify via teleconference in Anchorage. He stated it was interesting to see that all the other pieces of legislation, except HB 1, tried to dedicate the taxes. Yet, they all contained a fall-back clause that brought them back to the same wording as in HB 1. He also said the only language that remained identical to last years bills was the 100 percent excise tax on cigars and cigarettes and other tobacco products. He listened to the testimony on Tuesday, January 28, 1997, of which the Department of Health and Social Services could not come up with facts on these matters. Other testimony on Tuesday and today indicated that any opposition from a person to the tobacco tax was considered a pawn of the tobacco industry. He stated most of the testimony in support of the tax came from the health agencies that were completely or partially funded by the tax payer's money. He had lost two hours of pay to come here to testify while the other testifiers from the health agencies were on company time. TAPE 97-5, SIDE B Number 0001 MR. MCFAIL continued by asking the committee members why the tax was also being raised on cigar and pipe tobacco when the increase was intended to deter teenage smokers? He also asked why they were raising taxes on products that were already illegal for those under the age of 19? He lastly commented HB 79 would be a much better vehicle to accomplish this. Number 0038 LAURA SARCONE was the next person to testify via teleconference in Anchorage. She was a certified mid wife. She supported the $1 tobacco tax increase. She was particularly opposed to smoking during pregnancy. This tax could prevent saving in the health care dollars in other ways other than cancer prevention. Many studies had linked low birth rate, prematurity and perinatal mortality from maternal cigarette use during pregnancy. The single cost of a premature and low birth rate baby could be as much as $100,000. She reiterated she supported the $1 tobacco tax as a deterrent for all teens, but mostly as a deterrent to pregnant teens. Number 0103 RICHARD H. RUSSELL was the next person to testify via teleconference in Bethel. He was affiliated with the American Heart Association, the American Cancer Society and worked as a correctional officer with the state. He stated he supported the tobacco tax. It was known that cancer was a serious health problem among the Alaskan Natives whereas in the past it was not. And, the primary reason was related to the use of tobacco products. He referred to earlier testimony of the existing age limit law and rules of local school districts and mentioned that these laws were unenforceable. An increase in tobacco tax had shown that it was a very effective tool to limit its use among the youth. Right now Alaska was at the low end of the spectrum across the country and the world in terms of excise taxes. Alaska now had the opportunity to become the leader in the country. In conclusion, over $100 million dollars had been spent in the last eight years by the tobacco industry opposing the tobacco tax. "They know it works," he stated. Number 0204 KAY JONES was the next person to testify via teleconference in Homer. She grew up in a smoking household and watched her mother die of lung cancer. She shared with the committee members the lose of her cousins due to lung cancer. She saw the children around Homer smoke and she saw people buy cigarettes for them. As long as the adults continued to buy cigarettes and provided a venue for them to get a hold of tobacco, they would continue to smoke. These children were addicted, and tobacco was the one thing that no one came off of. "You can kick cocaine, you can kick marijuana, you can kick heroin, but you can't kick tobacco. It's a deadly poison," she declared. There was nothing that she would not do to stop the children. She urged the committee members to support the tobacco tax because of the devastation it caused at all age levels. The nation paid a high cost for the effects of smoking, and Alaska needed to take a stand now to show they were a part of this. Maybe the rest of the nations would follow. Number 0320 MARIANNA WOODWARD, President, Tanana Valley Clinic, was the next person to testify via teleconference in Fairbanks. She explained the clinic was a group of 20 private practicing physicians in Fairbanks. The clinic supported the tobacco tax and sent a resolution to the Senate last year stating its support of the tax. As a pediatrician she saw the ill effects of tobacco use in children. The statistics indicated that adult smokers started when they were young. In Alaska 84 percent of the adult current smokers started when they were teenagers. Therefore, by reducing access by teens, it would reduce the number of adult smokers and the health consequences of smoking. The American Academy of Pediatrics found that tobacco had a greater impact on health then either alcohol or hard drugs. She called this a very serious problem and needed to be addressed from many different fronts. In her profession she reiterated she saw the effects of smoking everyday. She cited premature babies, ear infections as examples. In response to earlier testimony she stated that there was no reason accept that cigars would not also cause a significant problem to children. Number 0466 CHERYL KILGORE was the next person to testify via teleconference in Fairbanks. She thanked Representatives James and Bunde for sponsoring these measures. She called the tax an effective way to reduce tobacco use in the youth. The tax would restrict the access and prevent the initiation of smoking. Thank you for your leadership and for caring for the future health and well being of our children. This was only one measure....(indisc.--technical problems). Number 0517 LARRY GRAHAM, Executive Director, Alaska Association of Secondary School Principals, was the next person to testify via teleconference in Anchorage. At the annual business meeting last October, the membership passed a resolution calling for a substantial increase in the tobacco tax in Alaska. The resolution did not address the revenues that the tax would raise. The resolution was passed because the association believed that the legislation would help decrease the number of students that smoked and improve the health and learning of the students. There was a direct correlation between those that smoked and the tardiness and truancy of the students. This also affected the time spent in the classroom and what they learned. Many of the principals believe that kids were starting to smoke at an earlier age then ever before and most were addicted. He reiterated the tax would prevent the young from starting to smoke. Number 0656 JEAN MURRAY was the next person to testify via teleconference in Anchorage. She lived in Anderson. She thanked Representative James for bringing forth this issue again this year. She supported both bills. The issue of smuggling was overestimated she believed because many involved were small businessmen and not enough credit was given to them. Furthermore, positive addictions such as gum, running shoes and skis were ways to divert the attention of teenagers. Number 0760 SYLVIA SCOTT was the next person to testify via teleconference in Anchorage. She was a mother and a grandmother. She would be 100 percent for the tax if the money would go to the children and to the schools. "You know and I know what it's going for," she stated. It would go to other projects. She was tired of the children being used and abused to enhance other projects. She believed the tax would create more crime and the correctional facilities were already full. Another tax would be needed to build facilities to house these young people. The parents needed to teach their children that the use of tobacco was wrong, not the government or the state. Number 0854 RICK SCOTT was the next person to testify via teleconference in Anchorage. He felt that the proposed tax hike was yet another way to chip away at our freedoms as an American. Our forefathers left Europe to escape excessive taxation imposed on them, now everywhere we look we were being taxed. We have become just like the communist nations. The Governor felt that the tax hike would deter the youth from buying cigarettes. "This whole young generation that gladly spends $125 on a pair of athletic shoes, " he stated. The teenagers usually had more money then their parents. "Give our kids back to the parents. Let us work with them. You stay out of it. I think we'll get along a lot better." Number 0950 DAN LEVINSON was the next person to testify via teleconference in Homer. His testimony was based on two premises-the reduction of tobacco use by the tax increase and the state took for itself the power to protect the heath and welfare of its citizens. He supported the tobacco tax. "If you can't pass that tax bill, then I challenge you to come up with something that will work," he declared. Please do not maintain the status quo. Number 1017 DARLEEN BELTZ was the next person to testify via teleconference in Anchorage. She was a long time Alaskan resident and of Tlingit ancestry. She came from the thunderbird house. She recently lost a person she knew to tobacco. She wished that the tobacco industry was near her when he died. People had to pay for his care which lasted for two years. She asked, "Whose going to pay now?" She wondered how this monster became so attractive. She asked was it through movies and sports? In conclusion, she stated she supported the $1 tax. "Keep it high," she said. She did not care where the money went to. Number 1175 BRUCE MCCURTAIN was the next person to testify via teleconference in Anchorage. He addressed the language in the bills. He first thanked the legislature for trying to address the problem with children and tobacco. There must be a better way to address this problem than raising the tax. He asked for legislation that provided for strong penalties for retailers that sold tobacco products to minors and for youths that used tobacco products. He also asked for legislation that would allow the police and troopers to use minors to find unethical retailers. He recognized HB 79 and appreciated the bill. He called on the same measures that were used to address the problem with youth and alcohol. He could not support the increase of the excise tax on cigars from 25 percent to 100 percent. He could not see how that would protect the youth when the price of a cigarette only increased 5 cents and the price of a cigar increased $5. This large blanket of an increase was too wide. Number 1292 JOANNE LOVITZ-EDMISTON was the next person to testify via teleconference in Anchorage. She was a 17 year resident and did not support the legislation. "Lets cut to the chase shall we. This issue is not really about teen smoking, is it?," she asked. She called it a revenue enhancer disguised as "do gooding." If the state of Alaska was truly concerned it would insist upon the proper enforcement of current laws. Yet, this would bog down the police. It would be easier to tax the people, of which the Republican lead majority, said it would not "throw down on our backs," and throw the money in the wrong direction. What was wrong with asking for identification? she asked. The state was not serious about teenage smoking, she reiterated. "I am sick to death of all the false paternalism and `mommism' from the state government," she stated. She would not allow any one else to think for her. If HB 1 or HB 52 were passed, she would purchase her cigarettes via the mail or from the Native organizations. Number 1459 CODY MITCHELL was the next person to testify via teleconference in Anchorage. He was a manager of a large retail company in Anchorage. He attested that other purchasing avenues such as smuggling would increase as a result of an increase in the tobacco tax. He agreed that smoking killed and something needed to be done. However, it would not happen through raising taxes. He knew of customers already planning ways to get their cigarettes cheaper. He challenged the legislators to find a happy medium to appease both sides. The people were tired of being taxed. Number 1596 SUSAN FISCHETT was the next person to testify via teleconference in Anchorage. She was here to testify as a private citizen and not as a state paid health employee. She strongly opposed the tobacco tax. "It sounds like fear mongreling and scare tactics," she stated. Young people were already protected by the law. The tax would only lead to an increase in crime, stealing and black market activity. It would not deter kids from using tobacco. "Why are we so eager to tax our children, anyway," she wondered. Let's offer an incentive for those that did not smoke, for example. The tobacco tax would be used as a stepping stone to a state income tax and more. The Anchorage School District was already planning to tax its citizens more. The legislature should be committed to reducing spending and not looking at ways to raise revenues and spend more. CHAIR JAMES announced the next meeting on HB 1 and HB 52 would be Tuesday, February 4, 1997; listen only for the teleconference network.