Massachusetts is just the latest state to consider tobacco tax hikes as a way to close budget gaps during sagging economic times, the New York Times reported April 21.

The Bay State is looking to raise $175 million to pay for workers' health care by raising its cigarette tax by up to $1 per pack. The plan has the support of top leaders in the state legislature and Gov. Deval Patrick. "Massachusetts has a huge stake in the health reform effort, and its success is important to the leadership here," said David E. Newman of Tobacco Free Mass. "That's part of the reason that both the speaker and the Senate president are working to tie this increase directly to that reform."

A total of 22 states have considered legislation to increase tobacco taxes this year, and 11 states hiked their tobacco taxes in 2007. Backers say the increases not only provide revenues to states but discourage smoking. The tobacco industry, however, says the tax increases unfairly target smokers, encourage smuggling, and often raise less money than projected.

"For some states, tobacco taxes are seen as a kind of magic bullet that are really quite different from less popular kinds of taxes," said Richard Cauchi of the National Conference of State Legislatures. "Legislators are able to argue that it's a sin tax, and the voters seem more accepting if they know the funds are going to be earmarked for some kind of health initiative."

Tobacco tax hikes have been passed by 42 states and the District of Columbia since 2002. New York lawmakers recently approved a $1.25-per-pack increase that is expected to raise $265 million for the state's general fund. Even traditional tobacco state South Carolina is proposing a 50-cent increase in the tobacco tax to pay for healthcare -- a measure sponsored by a Republican in a state that has the nation's lowest tobacco tax (7 cents per pack).

In states like California and Oregon, however, the tobacco industry has successfully spearheaded efforts to block proposed tax increases, even when the revenues were earmarked for healthcare. "California right now would have the most comprehensive health care plan in the nation, and the tobacco industry basically killed it," said Calif. Assembly Speaker Fabian Nunez.

President Bush twice vetoed a plan to expand the State Children's Health Insurance Program with funds from a 61-cent-per-pack increase in the federal cigarette tax. Democratic presidential candidates Sen. Hillary Clinton and Sen. Barack Obama supported the bill, while GOP candidate John McCain voted against the measure.