U.S. President George Bush has twice vetoed an expansion of the State Children's Health Insurance Program, which include increases in federal tobacco taxes, the Times reported. A universal healthcare plan died in California in part due to a $1.50 per pack increase in cigarette taxes and Georgia, Kentucky, Maine and Mississippi have seen tobacco tax hikes fail this year, the newspaper said.

But several other states have increased cigarette taxes, with most of the sums raised going to state health plans. The Tobacco Merchants Association said 22 states are pursuing increases in cigarette taxes for 2008 and 11 states raised cigarette taxes in 2007.

New York raised cigarette taxes $1.25 a pack to $2.75 this month, which will add $265 million to the general fund, the Times reported.

Massachusetts is considering an additional $1 per pack tax, hoping to raise $175 million to help pay for its mandatory health insurance program, the report said.