Senate strikes compromise on tobacco tax increase

Published 5:56 pm Wednesday, June 23, 2004

By Staff
LANSING -- Senate Majority Leader Ken Sikkema applauded his colleagues Tuesday for supporting a compromise on the tobacco-tax increase that protects Medicaid funding, offers an opportunity to increase funding for the life sciences and breaks the logjam in budget negotiations.
A Senate Republican plan, offered by Sikkema, Sen. Beverly Hammerstrom, R-Temperance, and Sen. Tom George, R-Texas Township, sends 100-percent of Gov. Jennifer Granholm's proposed 75-cent-a-pack tobacco-tax increase to the Medicaid Trust Fund for the 2004 and 2005 fiscal years.
This eliminates the current deficit in the Medicaid Benefits Trust Fund.
The plan then sends 75 percent of the tax to the Medicaid Trust Fund and 25 percent of the tax to the General Fund starting in fiscal year 2006.