DATE: Saturday, March 22, 1997              TAG: 9703220600

SECTION: FRONT                   PAGE: A1   EDITION: FINAL 

SOURCE: BY LON WAGNER, STAFF WRITER 

                                            LENGTH:   80 lines

ATTORNEY GENERAL'S OFFICE WALKS A TOBACCO TIGHTROPE IN VIRGINIA

In 1752, the Virginia General Assembly enacted a duty on tobacco to raise money to build a lighthouse on the sands at Cape Henry.

The duty was repealed just seven years later. The reason: a fear that the tax on tobacco would hurt exports.

Nearly 250 years have passed and tobacco interests still win the day in Virginia.

The admission Thursday by the Liggett Group that smoking is addictive and causes cancer hasn't shaken Virginia's official tobacco-is-king resolve, politicians and industry watchers said.

Virginia Attorney General James S. Gilmore III refused to join his counterparts in 22 other states that are suing tobacco companies to recover smoking-related health care costs.

Gilmore's office, though, did provide a summation of tobacco's importance to the state's economy:

It is the state's leading cash crop, bringing in one-fourth of the state's total income from crops.

More than 130,000 Virginians are directly or indirectly employed by the tobacco industry, Gilmore's office said.

Tobacco is the state's top export - $3.5 billion worth in 1994.

``Virginia has to be cautious in joining other states' actions that could potentially devastate Virginia's economy,'' said Gilmore's spokesman Mark Miner, who smokes Marlboro Medium cigarettes. Gilmore smokes only an occasional cigar, Miner said.

The impact of smoking on Virginians' health tells a more somber story than tobacco's economic impact. More than 23 percent of the state's adults smoke cigarettes, slightly higher than the national average.

Statewide, medical costs directly related to smoking are estimated at $829 million annually, according to the Centers for Disease Control and Prevention. The Virginia Department of Health says its 1993 smoking-related Medicaid costs were $69 million.

If tobacco sales suddenly plunged, Hampton Roads would not be economically devastated. Just a few farms grew 67 acres of tobacco in Suffolk in 1995, a minuscule portion of the 8,400 farms in the state that grow it.

But the port of Hampton Roads would take a hit. Tobacco is the port's fourth-largest export commodity in terms of tonnage - nearly 205,000 tons in 1994 - and by far its most valuable.

If Philip Morris did the seemingly unthinkable and shut its Richmond plant, which makes 600 million cigarettes a day, it would more than likely devastate the port's tobacco business.

The giant Richmond-based cigarette maker is the port's second-biggest shipper. Two other tobacco firms are in the port's top 20.

John C. Maxwell, a stock analyst at Wheat First Butcher Singer in Richmond, summed up the effect of Liggett's revelations on other tobacco companies: ``Zero.''

``For 30 years it says right on the pack, tobacco is not good for your health,'' said Maxwell, who does not smoke. ``Tobacco sales are flat. Cigars are going through the roof. People smoke if they want to smoke.''

Hilton Oliver, executive director of the Group to Alleviate Smoking in Public, or GASP, said tobacco will maintain its stranglehold on Virginia as long as politicians are ``willing to sell their souls to tobacco money.''

That may take a while: since 1995 General Assembly candidates have received $176,120 from tobacco companies. Philip Morris alone contributed $103,879, according to a Virginian-Pilot database compiled by the Virginia Public Access Project.

Attorney General Gilmore and Lt. Gov. Don Beyer, two gubernatorial candidates, received a combined $48,200 from tobacco groups last year, according to the database.

But slowly the state's politicians may be tempering their allegiance to tobacco.

Bernard S. Cohen, an Alexandria Democrat who retired last year from the General Assembly, spent seven years working to get the Virginia Indoor Clean Air Act approved. The act, which bans smoking in public buildings, passed in 1990.

Cohen estimates that when he came to the General Assembly in 1980, 50 to 60 House of Delegates members smoked while debating legislation on the house floor.

When he retired, only six or seven members smoked. MEMO: Staff writers Christopher Dinsmore and Debra Gordon contributed to

this report. KEYWORDS: TOBACCO SMOKING

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