New York's tax on cigarettes will increase by 55 cents, which will make the price jump to over four dollars a pack

December 20, 1999
Web posted at: 11:15 p.m. EST (0415 GMT)

NEW YORK (CNN) -- Governor George Pataki and the state legislature have agreed to raise New York's cigarette tax to $1.11 a pack, as part of an ambitious program to provide as many as 1 million uninsured New Yorkers with health insurance.

"Cigarette smoking has an enormous negative impact on people's health, and it drives up the cost of health insurance and health care for all of us," said Pataki, a Republican.

The increase of 55 cents a pack is expected to generate about $400 million a year for the state. New York last increased its cigarette tax in 1993 from 39 cents a pack to 56 cents.

The new increase, which will likely be introduced as legislation this week, makes New York's cigarette tax the highest in the country.

Tobacco giant Philip Morris blasted the proposal.

"It is unfair to single out adults who choose to smoke in order to pay for broad-based, statewide programs that should be the responsibility of all taxpayers," the company said in a statement.

The tax plan was the result of months of tense negotiations between Pataki and the legislature's Democratic leaders. The revenue from the $1.11 cigarette tax will be combined with New York's share of the national lawsuit against tobacco companies, as well as federal aid, to provide coverage for as many as 1 million uninsured New Yorkers.

The two sides also agreed to renew a $1.3 billion program that trains new doctors and pays the emergency rooms bills of insured patients.

"We wanted to make sure we get stability into our hospitals and nursing homes and other medical institutions who were basically facing severe financial problems," said Dennis Rivera, the president of New York City's Hospital Workers Union, who helped organize the talks.

Proponents of the state tax hike, which will coincide with a federal cigarette tax increase to 34 cents of a pack, hope the higher prices will dissuade younger people from taking up the habit.

Reporter Deborah Feyerick contributed to this report

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