INDIANAPOLIS -- Not everyone is happy about the state's proposal to raise Indiana's cigarette tax.
Dennis Burosh, manager of Hammond's Calumet Tobacco store, says it will kill business from neighboring Illinois.
Currently, overlapping Illinois taxes give Indiana's tobacco outlets a competitive edge, and Burosh doesn't want to see a slip in business at Calumet Tobacco, which also has a store in Munster.
"It's just going to kill the border business," said Burosh of possible legislation.
Despite that concern, many Northwest Indiana legislators are eyeing a substantial increase in the cigarette tax. The state spends about $2 billion on smoking-related illnesses, and legislators are looking to recoup some of the costs from what they see as the source: cigarette-buying consumers.
Yet some say they don't want to exceed the Illinois tax. State Rep. Earl Harris, D-East Chicago, said he is worried about a new tax of more than 50 cents per pack.
Others say they only care about health care costs, and using possible new revenue to bolster state budgets for Medicaid and the Children's Health Insurance Program.
A key player in the debate, Sen. Frank Mrvan, D-Hammond, represents many border businesses.
He serves in the Indiana Senate, a Republican-dominated body where the tax will either pass or die.
Mrvan said he is open to a tax increase.
The latest figure to expect is 54.5 cents, which would make the Indiana tobacco tax a flat dollar on each cigarette pack.
That figure was floated on Wednesday, then successfully amended into House Bill 1008, which is being pushed by Rep. Charlie Brown, D-Gary, chairman of the House Health Committee.
Even if Indiana matches Illinois' tax, it is doubtful cigarettes will be more expensive in the Hoosier state. Illinois has higher retail cigarette prices (a 68-cent markup) and a higher general sales tax.
Illinois' cities and counties also have the right to add between 10 cents and 15 cents to the price.
House Bill 1008 would allow Hoosiers who make up to 300 percent of the federal poverty-income wage to be eligible for health insurance through Medicaid or CHP.
The bill would also cut the ranks of the uninsured by allowing children up to the age of 24 to remain on the family's coverage plan, so long as all eligibility was met and any premiums paid.
Mrvan said 800,000 Hoosiers are uninsured, and the higher tax won't discourage retail business along the Indiana-Illinois border.
"It's going to help people who need health insurance," said Mrvan. "I will definitely vote for it."
Brown said the issue is one of health. Long a smoking foe, Brown said he did not care about the higher price or the retail impact, but conceded prices will still be lower in Indiana.
"Some people may not come over from Illinois," said Brown on Thursday. "I don't see them stopping."
But Rep. Linda Lawson, D-Hammond, does. Lawson said on Thursday that she is worried about retail businesses along the border.
"I'm just worried about the employees and the people who own those businesses," said Lawson.
Brown can also count on some opposition from anti-tax activists who say smokers are merely the latest victims of government's desire for more revenue.
"It is an old trick of advocates of bigger government to demonize people and then tax them," said Grover Norquist, president of Americans for Tax Reform. "Taxes are what you do when you run out of reform ideas."
Another wild card in Brown's play to raise the tax is the Republican party.
The tax has the general support of Republican Gov. Mitch Daniels, who spoke of expanding health insurance in his 2007 State of the State speech last month.
Daniels left open the door to funding by telling legislators it was up to them, as long as they used the cigarette tax.
Brown got three votes on Wednesday from Republicans on the House Health Committee, where House Bill 1008 passed 8-0 on first reading.
After announcing their budget goals on Thursday, the House Republican caucus declared they will not support a Democratic budget with tax increases -- general tax increases.
Tobacco taxes are not general tax increases, and House Bill 1008 could get some Republican votes, said Rep. Brian Bosma, R-Indianapolis, the House minority leader. Bosma said it's conceivable more Republicans will vote for the bill when it goes to all 100 members.
Brown said he needs 25 GOP votes, even though the Democrats control the House 51-49.
Supporters of the bill say Democrats in tobacco-growing counties may not vote for the bill, making bipartisan support crucial.
Anti-tobacco groups are also ramping up their efforts, and contacting legislators.
"I think it's going to happen," said state Rep. Ed Soliday, the freshman Republican from Valparaiso. "I'll support 54 cents. I'm getting a lot of mail."