wow talk about government theives!!!! a 75 cent a pack cigarette tax!!!!

Judge says state can keep collecting cigarette fee - for now

A Ramsey County judge ruled Wednesday that the state may continue to collect a 75-cent-a-pack fee on cigarettes while the state Supreme Court weighs its ultimate fate.

But, with the consent of lawyers from both the state and tobacco companies, Judge Michael Fetsch said the money must be held in a special fund and not spent. If the tobacco companies are successful in challenging the fee, the money will be returned to them.

Fetsch in December threw out the fee, saying it violated the 1998 agreement between the state and tobacco companies. But the state and the tobacco company lawyers agreed to let Fetsch stay that decision, in the hopes of quick action by the state Supreme Court on the state's appeal.

The fee was expected to raise about $400 million for the state over two years. According to the Department of Revenue, collections have been averaging $16 million to $18 million per month in recent months.

Gov. Tim Pawlenty had proposed the fee last year during the protracted legislative session. He had hoped to broker an agreement between Democrats opposed to kicking low-income people off state health programs and Republicans opposed to tax increases.

But Pawlenty, a Republican, insisted it be levied as a fee tied to health care costs rather than a tax, hoping to stick to a "No New Taxes" pledge he'd signed as a candidate in 2002.

But Fetsch ruled that in levying it as a fee, the state broke part of its deal in the multibillion-dollar 1998 settlement with tobacco companies. That agreement barred the state from collecting further health care costs related to smoking.

Some lawmakers have since argued that the Legislature should scrap the fee this winter and start over. Pawlenty rebuffed that suggestion Wednesday, saying it should be allowed to play out in the courts.

"The important thing is, we still have a chance to make sure if what we're doing is legal and right," Pawlenty said.

Attorney General Mike Hatch has asked the Supreme Court to directly hear the case, bypassing the state Court of Appeals since whatever that court decided would likely be appealed to the high court anyway.

Chief Deputy Attorney General Kris Eiden said the Supreme Court hasn't yet indicated if it will hear the case. Fetsch's Wednesday ruling includes a provision that should the issue still be before the courts by June 29, 2007, the money collected would go into the state general fund.

But, "I don't think that's likely," Eiden said. "I expect it will be resolved by then."

By Patrick Condon, Associated Press Writer

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