THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, August 24, 1996 TAG: 9608260352
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY DAVID M. POOLE, STAFF WRITER
DATELINE: RICHMOND LENGTH: 84 lines
Tobacco is no longer king in Virginia, but the golden leaf still enjoys a host of royal privileges.
Virginia has the lowest cigarette tax in the nation.
The General Assembly fears the manufacturing clout of Philip Morris U.S.A. and reveres the historical significance of tobacco-belt farmers.
The state attorney general has gone on record saying he would not join with other states that have sued tobacco companies to recover Medicaid expenses for smokers suffering from emphysema, cancer and other ills.
On Friday, no politician with statewide ambitions embraced President Clinton's decision that cigarettes, which contain addictive nicotine, should be regulated as a drug.
In Danville, in the heart of the state's tobacco belt, a handful of tobacco farmers joined state and local politicians in denouncing the new regulations.
Dan Robertson, a 75-year-old tobacco farmer and owner of the Hollands Tobacco Warehouse, warned that the strict regulation of tobacco would devastate the agricultural economy of Southside Virginia.
Wayne Osborne, harvesting his tobacco crop in the rolling hills of surrounding Pittsylvania County, said he and other farmers are putting off equipment purchases because they are uncertain about tobacco's future.
``It's got us afraid to do anything,'' Osborne said of the political assaults on tobacco. ``I wanted to buy a harvester to cut down on labor costs. You aren't going to invest in something when you don't know what's going to happen.''
The reaction in Richmond was more measured. Virginia Gov. George F. Allen Jr., who chews tobacco, declined to interrupt a family vacation at the state compound in Virginia Beach to comment.
``There's no question we're treating this as an election year stunt,'' spokeswoman Julie Overy said, adding that Allen may make a statement next week.
President Clinton might take comfort in a recent poll showing that 55 percent of Virginians believe it's time for the federal Food and Drug Administration to get tough with tobacco manufacturers.
The Richmond Times-Dispatch survey also found that 86 percent of those who favor federal regulation are not swayed by tobacco's contribution to the state's economy.
Tobacco is no longer the currency of the state's economy, but it still ranks atop some important categories.
Farmers are now harvesting a crop covering 46,170 acres, down from 230,000 acres in 1919 and 110,000 acres as recently as 1956, according to the state Department of Agriculture and Consumer Services.
Last year, tobacco was the state's top cash crop, generating $174.9 million in receipts for farmers. Soybeans were a distant second, at $79.6 million.
Tobacco manufacturing jobs in Virginia are estimated at 9,500, down from a high of 18,000 in 1982, according to the Virginia Employment Commission.
Philip Morris U.S.A. accounts for the bulk of the jobs at its cigarette-making plant in Richmond. The plant, which churns out 600 million smokes a day - accounts for one of every five manufacturing jobs in the Richmond-Petersburg area.
Tobacco products are the state's No. 1 export commodity, worth $3.5 billion in 1994, according to state figures.
Philip Morris protects its interests in part by spreading campaign contributions to state lawmakers from both political parties.
The New York-based firm gave more than $70,000 to candidates in last year's General Assembly elections, according to a Virginian-Pilot computer database of campaign contributions.
Allen, who has been known to hand out free smokes to promote made-in-Virginia products, has benefited from the Philip Morris largess. The company gave $25,000 to Allen's 1994 inaugural fund and another $25,000 to an Allen-led political action committee that supported Republican legislative candidates last year.
Tobacco interests, led by Philip Morris, flexed their muscle earlier this year in the General Assembly. The bill codifies existing court decisions that would make it difficult for the state government to follow the lead of Florida, Texas and other states that have sued tobacco companies for damages.
The bill sailed through the House of Delegates and Senate with token opposition. The governor signed the bill into law.
``There's no question the bill gives some protection to Philip Morris,'' said Del. H. Morgan Griffith, R-Salem.
Such a lawsuit is highly unlikely, given tobacco's place in Virginia's economic history. After all, state lawmakers toil beneath a ceiling decorated with gold tobacco leaves. MEMO: The Associated Press contributed to this story.
KEYWORDS: TOBACCO by CNB