Cigarette Tax Hike for Real

Smoke 'em if you got 'em, because the price to get 'em is going up.

Governor Jennifer Granholm has signed a bill that will raise the state cigarette tax to $2 per pack.

The increase is scheduled to take effect on July 1. Michigan will have the second highest cigarette tax in the nation.

Under the bill, all the new revenue generated by the higher cigarette tax would go to the state's Medicaid program in the current fiscal year and the one that begins October 1.

Twenty-five percent of the revenue will be set aside for the state's general fund in the budget year that begins on October 1, 2005. The remaining 75 percent will continue to help fund Medicaid.