While a Senate committee began hearings on bills to increase sales taxes and tobacco taxes, another bill has been advanced that would increase the cost of a 12-ounce can of soda.

The Senate Assessment and Taxation Committee began hearings over raising tobacco taxes by 55 cents and will continue hearings regarding Kansas Gov. Mark Parkinson’s plan to increase the state sales tax by 1 percent from 5.3 percent to 6.3 percent for three years.

The soda tax, which was advanced by Sen. John Vratil, R-Leawood, increases the tax on soda by one penny for every teaspoon of sugar — or an estimated 10 cents — and would raise an estimated $90 million during the next fiscal year, which begins on July 1.

“It is amazing just to see how much can be generated,” said Sen. Les Donovan, R-Wichita, chair of the Assessment and Taxation Committee. “There is a lot more consumed than I could have ever dreamed.”

Both the tobacco and sales tax increases would constitute an overall increase of just over $377 million in the state general fund receipts in the next fiscal year. Currently, the state is facing a projected $467 million shortfall for FY 2011.

“We’re hoping that the gap is not that broad,” Donovan said. “If it is we have bigger problems than we thought.”

Vratil proposed his soda tax during a meeting of the Senate Ways and Means Committee, which agreed to sponsor it. The committee also agreed to sponsor a bill that doubles the per-gallon taxes paid by distributors of beer, wine and liquor and the tax that retail stores pay on their gross receipts. That measure would raise an additional $50 million.

As for the tax increases that the Assessment and Taxation Committee started hearings for Tuesday — in favor of the Governor’s increases — Donovan said that state agencies are warming up to the proposal.

“There are a lot of people that get the funding that are excited about us discussing these tax increases,” Donovan said. “They get the money … that is a pretty good connection and without the tax increases, they are not going to get the funding they need.”

The testimony came on the same day that advocates for the disabled staged several small protests at the Statehouse.

The tobacco tax proposal would increase the cigarette tax by 55 cents, to $1.34 a pack, and to quadruple the tax on other tobacco products to 40 percent.

Hearings on tax increases will continue today with cigarette tax opponents and Donovan said hearings are scheduled to continue into next week.

“When we start hearing the other parts of the bill — soft drink tax bill and liquor bill — there will be hearings on each one of those,” Donovan said. “We want to give everyone a fair hearing and exhaust all possibilities to help those that get the funding while trying not to destroy those that are being taxed.”

By Matthew Clark, Eldoradotimes

UNM students said a 75 cent tax increase on cigarettes won’t be driving them to Nicorette any time soon.
The state legislature passed a 75 cent increase to the current 91 cent cigarette tax last week, bringing the overall tax to a $1.61 per pack. However, smokers say the increase will not deter them from lighting-up.

“People pay out the nose for heroin,” UNM sophomore Jesse Clifton said. “I think an addiction is an addiction.”

Graduate student Sophia Hammett said imposing the cigarette tax is a way to tax a population that is least likely to resist and is often a more viable option for legislators than other tax increases.

“It is more ‘moral’ to raise a sin tax than acknowledge that we’re in a deficit,” Hammett said. “And either raise taxes across the board or make painful cuts.”

The state will be raising a projected $33 million per year in cigarette taxes.

Pug Burge, head of UNM’s Smoke-Free Environment Committee, said the cigarette tax is trying to make it financially uncomfortable for smokers, so they may consider quitting.

“I think those that have been smoking for years and years probably won’t quit,” she said. “I am hoping that younger people who are on the borderline will use this as an opportunity to stop smoking.”

Historically, cigarette tax increases have resulted in reduced sales. According to its quarterly reports, Philip Morris USA, which sells cigarette brands Marlboro, Parliament and Virginia Slims, saw a 10.5 percent decrease in 2009 domestic cigarette shipments after federal law increased cigarette taxes by 62 cents in April 2009,

Hammett said the federal increase did not affect her habit, and she does not expect the state increase to have a bigger impact.

“That didn’t slow me down,” she said. “I do not imagine that another 75 cents will hurt me that much.”

New Mexico is not the only state that has forced smokers to pay more as it tries to balance its budget. Last year, 16 states increased their cigarette taxes, according to StateLine.org.

Major tobacco-producing states generally charge less, while the rest of the nation charges more. Currently, 14 states tax cigarettes by $2 or more.

Rhode Island has the highest cigarette tax at $3.46 per pack, while South Carolina only taxes cigarettes 7 cents, according the American Lung Association.

Clifton said New Mexico’s average price of about $4.82 per pack is not bad in comparison to some other states.

“I heard in New Jersey they’re almost $10 a pack,” he said. “But 
people still smoke in New Jersey.”

Freshman Joshua Torres said an extra 75-cents-or-so a week was not enough to get him to quit.

“Definitely not,” he said. “I’ll just donate more plasma, I guess.”

Burge said that since the smoking ban on campus was enacted in August 2009, the UNM health centers have seen more students, faculty and staff expressing interest in quitting.

“I am hoping, with the cost of cigarettes going up, that we will see more people trying to quit,” she said.

By Leah Valencia, Dailylobo

While a Senate committee began hearings on bills to increase sales taxes and tobacco taxes, another bill has been advanced that would increase the cost of a 12-ounce can of soda.

The Senate Assessment and Taxation Committee began hearings over raising tobacco taxes by 55 cents and will continue hearings regarding Kansas Gov. Mark Parkinson’s plan to increase the state sales tax by 1 percent from 5.3 percent to 6.3 percent for three years.

The soda tax, which was advanced by Sen. John Vratil, R-Leawood, increases the tax on soda by one penny for every teaspoon of sugar — or an estimated 10 cents — and would raise an estimated $90 million during the next fiscal year, which begins on July 1.

“It is amazing just to see how much can be generated,” said Sen. Les Donovan, R-Wichita, chairman of the Assessment and Taxation Committee. “There is a lot more consumed than I could have ever dreamed.”
Both the tobacco and sales tax increases would constitute an overall increase of just over $377 million in the state general fund receipts in the next fiscal year. Currently, the state is facing a projected $467 million shortfall for FY 2011.

“We’re hoping that the gap is not that broad,” Donovan said. “If it is we have bigger problems than we thought.”
Vratil proposed his soda tax during a meeting of the Senate Ways and Means Committee, which agreed to sponsor it. The committee also agreed to sponsor a bill that doubles the per-gallon taxes paid by distributors of beer, wine and liquor and the tax that retail stores pay on their gross receipts. That measure would raise an additional $50 million.

As for the tax increases that the Assessment and Taxation Committee started hearings for Tuesday — in favor of the Governor’s increases — Donovan said that state agencies are warming up to the proposal.
“There are a lot of people that get the funding that are excited about us discussing these tax increases,” Donovan said. “They get the money … that is a pretty good connection and without the tax increases, they are not going to get the funding they need.”

The testimony came on the same day that advocates for the disabled staged several small protests at the Statehouse.
The tobacco tax proposal would increase the cigarette tax by 55 cents, to $1.34 a pack, and to quadruple the tax on other tobacco products to 40 percent.

Hearings on tax increases will continue today with cigarette tax opponents and Donovan said that hearings are scheduled to continue into next week.

“When we start hearing the other parts of the bill — soft drink tax bill and liquor bill — there will be hearings on each one of those,” Donovan said. “We want to give everyone a fair hearing and exhaust all possibilities to help those that get the funding while trying not to destroy those that are being taxed.”

By MATTHEW CLARK, Morningsun

Now that it appears we’re going to get the money needed so those 29 Utah Highway Patrol troopers won’t have to be laid off, and those 213 prison inmates won’t have to be released early, and that juvenile court judge in St. George can be hired, and the drivers’ license bureaus can open on Fridays, and any number of the state’s health and social services can be funded, I thought it only appropriate to thank the people who will be paying for it.

And let me tell you, they’re not exactly saying, “You’re welcome.”

I’m at Tobacco Max, a smoke shop on State Street. If it involves tobacco, this is the place. The store is wall-to-wall stuff you can smoke. Wallpaper by Marlboro.

By midmorning Friday, the news that the state Legislature just voted for a dollar-a-pack cigarette tax increase — the basis for the projected $44 million that will pay for all of the above — has filtered into the shop.

Scott Gunn is working his usual shift at the counter. He provides a description of the kind of people he sells cigarettes to every day — the people who will be paying that extra dollar per pack tax.

“A lot of them can hardly afford to live to begin with,” he says. “They pay with dimes and quarters. I’ve had half a dozen this morning digging for change, pulling lint out of their pocket. And it’s the first of the month. You should see it toward the end.”

And this is before the increase.

“To tax the little guy,” he says, shrugging, “seems kinda hard.”
Scott allows that it might be incentive for people to quit. Everything has its price. He uses himself as an example. When he started smoking, at age 13, cigarettes were 75 cents a pack. Every time the price went up he’d think about stopping. “When they reached $2, I’d say, ‘I’m quitting,’ ” he says. “Then it was $3. Now I’m paying $4.15 a pack, and I still haven’t quit. It’s addictive. It’s hard.”

We did some quick math. At a pack of Marlboros a day, Scott is spending $135 a month on tobacco (counting sales tax). With the new proposed tax, it will be $165.

Scott is 40. He’s been smoking for 27 years. “Maybe this will be what gets me to finally quit,” he says.

Just then, Paul Steck comes in for a carton of Pyramids.

Pyramids are the cheapest cigarettes in the store at $2.75 a pack.

“I used to smoke Parliaments,” Paul says — the Parliaments are on the shelf next to the Pyramids; they’re $4.79 a pack — “but I smoke what I can afford.”

Hearing Scott talk about “maybe quitting,” Paul, a truck driver during his working days, volunteers the not especially inspirational information that he has tried to quit 30 times.
“I know smoking’s not healthy,” he says. “But every time I stop smoking, I gain weight — so I have to decide, am I going to die from obesity or from smoking?”

Smokers, he says, are a “scapegoat” for taxation.

“Nine percent of taxpayers smoke. Out of that 9 percent, they’re trying to take care of the majority. It isn’t fair. But what can you do?”

Next to come in the shop is Sy Pham, the owner of Tobacco Max and a tobacco wholesaler who distributes to more than 100 gas stations and convenience stores in the Salt Lake Valley.

Sy says he is still reeling from the 62-cents-per-pack federal tobacco tax increase that was implemented a year ago — an increase, he claims, that cut his profits by 20 percent.

Tobacco taxes not only target a minority of the public, he says, but they target the poor over the rich.

For evidence, he explains that he consistently delivers 65 percent of his tobacco to the west side of the freeway that dissects the valley, with just 35 percent going to the more affluent east side.

“That tells you who will mostly be paying this tax,” he says.

Unless, miracle of miracles, they all quit, which will put us back to square one.

In the meantime, the least we can do, as they dig that lint out of their pockets, is thank them for their generosity.

By Lee Benson, Deseretnews

As the Legislature prepares to reconvene next week, a new poll released this week reveals that 73% of Georgia voters support raising the tobacco tax by $1 per pack to cut the state’s budget deficit and help preserve Medicaid funding in the state.

This support comes from a broad-based coalition of voters, including 72% of Republicans, 79% of Democrats and 65% of Independents. Even half of smokers (50%) support the tobacco tax increase to preserve health care funding.

“Now is the time for legislators to listen to the 73% of Georgia voters who want to raise the tobacco tax instead of cutting critical programs. These results show that, regardless of party, voters across Georgia understand raising the tobacco tax is a smart way to cut the deficit and protect our kids from tobacco,” said Danny McGoldrick, Vice President for Research at the Campaign for Tobacco-Free Kids.

The survey of 500 registered Georgia voters was released by a coalition of groups including the American Heart Association, American Lung Association, American Cancer Society and the Campaign for Tobacco-Free Kids and was funded by the Robert Wood Johnson Foundation.

Increasing the tobacco tax also is by far the most palatable approach to addressing Georgia’s budget woes. While 71% of voters supported increasing the tobacco tax for this purpose, more than two-thirds opposed every other option presented, including increasing state income and sales taxes, implementing a grocery tax and a hospital bed tax, and reducing funding for education and health care programs.

“Georgia faces many tough decisions this year, but raising the tobacco tax is the only one that will protect our kids and also lower healthcare costs for years to come,” said John Daniel, Vice President, Federal Georgia & Emerging Issues for the American Cancer Society.

The survey also found among Georgia voters:

* 60% are more likely to support candidates who favor the proposal, while just 19 percent are less likely to do so.
* 77% favor taxing other tobacco products such as cigars and smokeless tobacco at a rate comparable to cigarettes.

A recent report by the Campaign for Tobacco-Free Kids and other public health organizations found that a $1 increase in Georgia’s tobacco tax would raise $354.5 million in new annual revenue.

Such an increase would also prevent 79,600 Georgia kids from smoking, save 38,400 state residents from premature, smoking-caused deaths and save $1.8 billion in tobacco-related health care costs.

Georgia’s current cigarette tax is 37 cents per pack, which ranks 47th in the nation and is well below the national average of $1.34 per pack.

The survey was conducted by the polling firm Public Opinion Strategies.

The statewide poll has a random sample of 500 likely Georgia voters and was conducted Feb. 23 to Feb. 25 of this year. The poll has a margin of error of +/- 4.38 percentage points.

With New York facing insufficient resources to pay for education and health care, the proposed $1 cigarette tax increase will go to the state Health Care Reform Act Resources Fund to support health care and health-related initiatives, such as tobacco control programs. The increase in the cigarette tax is expected to generate additional revenues of $200 million in 2010-2011 and $205 million in 2011-2012.

Tobacco tax increases are good for public health, good for state revenues, and have broad-based public support. The 2008 state Adult Tobacco Survey found 59 percent of New York adults favored the $1 cigarette tax increase. The tax increase would help 53,800 adults to quit and 48,300 state residents to be saved from premature smoking-caused death. In addition, the estimated five-year health savings from fewer smoking-affected pregnancies and births is $16.4 million; and the estimated five-year health savings from fewer smoking-caused heart attacks and strokes is $23.6 million.

By Kelly Barton-White, Pressconnects

Lawmakers should allow Oregon cities and counties to raise taxes on cigarettes

We’re not prepared yet to conclude that voters in Multnomah County should approve a cigarette tax increase to raise millions of dollars a year to help pay for local health and human services programs.
We are already convinced, though, that Multnomah County and its voters should have the right to make that decision.

The Legislature is considering Senate Bill 1042, which would grant cities and counties the authority to raise local taxes on tobacco. As it stands, the state is the only government jurisdiction in Oregon permitted to adjust and collect tobacco taxes.

That’s just fine with those who produce and sell tobacco. It means they only have one taxing entity to resist, and that situation has helped keep Oregon’s cigarette tax, now $1.18 a pack, below the national average and some 85 cents a pack below the tax in neighboring Washington. In 2007, the tobacco industry and retailers combined to spend $12 million on a campaign that led to the defeat of a state cigarette tax increase to fund children’s health insurance.

However, the prohibition on local cigarette taxes is not fine with cities and counties such as Multnomah, which are required under Oregon law to provide many public health functions, but are prevented from using all available revenue sources to pay for them.

Multnomah County is pushing the Legislature for the authority to pursue a 25-cent per pack local tax on tobacco. It faces a deep structural deficit in its health and human services budget and has reduced spending for nine consecutive years, in good times and bad. The local cigarette tax would raise between $7 million and $9 million a year, according to Commissioner Deborah Kafoury, who testified in favor of SB1042 during a Senate hearing Friday.

Again, we need to hear more of the arguments for and against a Multnomah County cigarette tax before we take a position on the proposal. Retailers raise legitimate concerns about such a tax driving smokers to stores in neighboring counties, hurting grocers, markets and other stores in Multnomah County. There also are questions about how a local tax would affect cross-border sales from Washington, and whether that would reduce essential funding for the state health plan.

But as a matter of government responsibility, cities and counties and their constituents ought to have the authority to look at the facts, consider how tobacco taxes fall disproportionately on low-income people, and decide for themselves whether to raise taxes on tobacco and other products.

On Friday in Salem, opponents of SB1042 warned again and again that tobacco taxes are a declining revenue source, and that further increases in cigarette taxes would dampen cigarette sales and reduce tobacco tax revenue.

Well, yes. But falling tobacco revenue means lower cigarette use, which means better public health and reduced costs for health providers, including Multnomah County. In the end, that may be the best argument for the bill giving cities and counties the right to set their own tobacco taxes.

By The Oregonian Editorial Board

February 07, 2010