SACRAMENTO, Calif. -- Assembly Speaker Herb J. Wesson Jr. (D) has proposed increasing taxes on cigarettes in California by $2.13 above the existing 87 cent-a-pack tax in order to balance the state budget. He said the tax will raise $1.7 billion a year and replace the proposed increase in the vehicle license fee, or car tax, that had been approved in the state Senate and was the major stumbling block in the 37-day budget impasse.

If enacted, the legislation would mean that a pack could cost $8 there. It would provide $1.689 billion more for the general fund every year, even after conservative adjustments for an anticipated decline in smoking, Wesson said. Democratic Governor Gray Davis issued a statement supporting the proposal.

TORONTO -- Native Americans from the Kanasatake reservation near Montreal who are selling cigarettes for $20 a carton (Canadian, $12.63 U.S.) insist that they are doing nothing illegal, although the Royal Canadian Mounted Police and Revenue Canada say otherwise, CBC-TV reported Tuesday, says the Associated Press.

The brands being sold--Native and Mohawk Blend--come from a manufacturing plant on the U.S. side of the Mohawk reservation in Akwesasne. Making cigarettes is an important business in Akwesasne, where two manufacturing plants employ about 200 people.