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House OKs shifting cigarette tax to roads, water

Millions in tax revenue from Idaho’s cigarette sales is closer to flowing toward the state’s scarred-up highway asphalt and its drought-depleted aquifers.

The House voted 63-4 on Feb. 28 to redirect cash from the state’s 56 cent-per-pack tax — it has totaled about $35 million to $40 million annually — that’s currently being used to retire bonds for the $130 million Idaho Capitol renovation, as well as funding cancer programs, state buildings and juvenile probation.

With the Capitol bonds nearly paid off, there’s been a scramble this session for the money that’s no longer needed.

House Majority Leader Mike Moyle, R-Star, said these two priorities — water, the lifeblood of Idaho’s enormous agriculture industry, and roads, the means by which products are delivered to markets — merit the additional cash.

“This is an important milestone bill, it really represents an important step forward in these two areas,” Moyle said.

Under the measure, $5 million from taxes on cigarettes would fund Idaho Department of Water Resources efforts to recharge the depleted Eastern Snake Plain Aquifer. Another $4.7 million would help retire highway construction bonds from the big “Connecting Idaho” debt-for-roads program.

And about $7 million that’s projected to be left over in 2015, would be used to help cover what’s estimated to be an annual $262 million maintenance backlog.

The measure now goes to the Senate.

Agriculture groups, including the Idaho Groundwater Appropriators, which represents thousands of farmers who pump water from the state’s aquifers, applauded the House vote.

They say $5 million directed toward groundwater recharge efforts couldn’t come at a better time.

Though a legal challenge in January by a fish producer near Hagerman that threatened to shut down up to 157,000 acres of farm ground was at least temporarily resolved last week, Lynn Tominaga, a lobbyist for the groundwater group, said there are scores of potential projects his group may now be able to undertake to remedy persistent water shortages and avoid similar conflicts in the future.

Tominaga said the $5 million doesn’t come without strings attached.

“The only way a project is going to get done is if local communities or public entities come and make the commitment to put the money up to get a project done,” he said. “If there are entities that want to see things accomplished, they’ll have to put money up.”

When the 2014 session began, numerous people were eyeing the cigarette money.

In early January, Gov. C.L. “Butch” Otter announced he wanted to spend nearly $11 million no longer needed for the bond payments to offset Idaho’s share of the Medicaid health insurance program for low-income, elderly and disabled people. So far, however, he hasn’t introduced a bill.

The American Cancer Society Cancer Action Network floated the notion of funding long-term tobacco-cessation programs — or creating a more robust campaign to keep young people from lighting up_could pay dividends in terms of future health-related costs.

During debate Feb. 28, the bill’s few naysayers argued the highway funding provisions were a radical departure from Idaho’s tradition of paying for road and bridge work with fuel taxes and vehicle registration fees — not with general taxpayer money needed for education, prisons and Medicaid.

Rep. Phylis King, D-Boise, worried this was a grave first step in throwing roads into the competition for already-scarce funds.

“It’s a big policy change,” King argued. “Shouldn’t we be putting it in the general fund and using it for health care, instead of using it for maintenance of roads and bridges and the highway account?”

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