Utah smokers will probably be tagged with an increased cigarette tax in the coming year, Senate President Michael Waddoups said today.

"I think it will happen," Waddoups said. "The question is the amount. Will it be a buck? Will it be more?"

The Taylorsville Republican said he thinks the revenue from the tax will be needed to balance the budget and to cover a "real shortfall in Medicaid."

"As I talk to my colleagues, everyone has already accepted that we're going to have a tobacco tax increase," Waddoups said today at a tax conference sponsored by the business-backed Utah Taxpayers Association.

House Speaker Dave Clark, R-Santa Clara, said an economy that is still struggling and demands to fund growing needs in public education and health care will demand that the cigarette tax be considered.

"I think that based on where the economy is going now and the inherent needs that we have every year, I'd say it's a pretty good likelihood," Clark said. "We should first look to find efficiencies and when we think we've done that, I think one of the first places the Legislature has an appetite to look is the cigarette tax."

Any increase to Utah's 69.5 cent per-pack tobacco tax will come on top of a 61-cent increase in the federal tax increase endorsed by President Barack Obama with proceeds used to fund expanded health insurance for poor children.

Legislation to raise the tobacco tax, sponsored by Rep. Paul Ray, R-Clearfield, died last session after tobacco companies mounted an intense lobbying effort in the Senate.

Ray's bill would have raised Utah's cigarette tax from 69.5 cents per pack to $1.30 cents per pack, which is the national average, and indexed the tax to automatically increase to stay one cent above the national average.

Ray said everyone is anticipating the tobacco tax increase will pass next year. He said programs have already been cut as far as they can go without carving into essential services.

But Rep. Craig Frank, R-Cedar Hills, objects to talk of the cigarette tax hike, and says it's wrong to focus so narrowly on one group.

"I wouldn't support it because I think targeting taxes at minority populations is bad tax policy," he said. About 11 percent of Utahns are smokers.

A tobacco tax increase of 60.5 cents per pack would generate $24 million and prompt about 6,736 people to not smoke, according to the Alliance for Tobacco-Free Living. Raising the tax by $1 would generate $43 million in revenue and prompt more than 11,000 to quit.

Part of the urgency for the new tax revenue is because of a shortfall hospitals say they are facing as a result of deeper than expected Medicaid cuts last session. That means the hospitals receive less for treating Medicaid patients, which might force them to pass on additional costs to insured patients.

Gov. Jon Huntsman Jr. has said state leaders are trying to find a temporary fix for the shortfall, but a long-term solution is needed. He suggested the tobacco tax or a hospital bed tax might be likely revenue sources.

The Utah Hospital and Health Systems Association opposes the bed tax, but supports the tobacco tax.