Echos of concern and support for a proposed cigarette tax increase have rippled through state government during the past week as the state Legislature prepares to tackle the issue.

Gov. Tom Vilsack said he was concerned about budget proposals released last week by House Republicans that outlined the disparity between state health care costs and revenues from tobacco use. The Board of Regents recently released a statement favoring an 80-cent cigarette tax increase because of the extra revenue for health care and the health benefits that would follow from decreased tobacco use.

Iowa has one of the lowest cigarette taxes in the nation. At 36 cents, Iowa’s tax is lower than all of its neighboring states except Missouri, which collects 17 cents per pack.

“The proposed targets do not address the inequity that exists when the state pays out $235 million in health care costs for smoking-related illnesses but receives only $88 million in revenue from tobacco taxes,” Vilsack said in a statement released Thursday. He said the gap in funds means the state would not be able to fund other services because Medicaid needs the money generated by a cigarette tax.

Senate Republican Leader Stewart Iverson, R-Dows, called this a “big lie.”

“We will pay for Medicaid; we have always paid for Medicaid,” Iverson said. “And we have not taken away any optional services, which other states have done.”

Iverson said because the revenues are growing at about 7 percent, there is no need for a tax to pay for Medicaid.

Iverson said of the $600 million the state uses to fund Medicaid each year, $400 million goes to nursing homes. Because this leaves only $200 million for other expenses, Iverson doesn’t know how Vilsack came up with his figures.

Regent Amir Arbisser of Davenport said there are many hidden costs of tobacco use.

“For example, a baby that’s born of a smoking mother may have certain educational challenges,” Arbisser said. “There are a lot of other subtle side effects, like the lost wages of people with respiratory illnesses who can’t do their job.”

The regents said they are particularly interested in the tax increase, as it would benefit the University of Iowa Hospitals and Clinics, which it is responsible for overseeing.

Vilsack continued to push for increased funding Monday during a trip to Washington for the National Governors Association meeting. He also outlined a Medicare plan based on a sliding scale to help pay for medical costs.

A budget proposal from President Bush revealed as much as $60 billion could be cut in federal Medicaid spending this year.