Cancer Society Seeks To Put Tobacco Tax Increase On Ballot

The price of smoking cigarettes in Missouri could soon see a substantial price increase if a new voter-driven petition effort is successful.

This week, the secretary of state gave approval to a group led by the American Cancer Society to begin circulating a petition that would put a four-cent per cigarette tax increase on ballot.

The initiative would substantially increase the tax rate on all cheap cigarettes products in Missouri. Currently, a pack of 20 buy cigarettes in Missouri comes with 17 cents in tax. This new proposal would raise the amount of taxes paid per pack to 97 cents. For other cigarettes online products, a tax of 34 percent of the manufacturer’s invoice price would be added.

The ballot initiative calls for these new taxes to be used for a new state trust fund to finance anti-tobacco education at all levels of public education, including at public universities.

The same ballot proposal also calls for an increase in the amount that certain tobacco manufacturers must maintain in their escrow accounts to pay legal judgments or settlements.

Before any statutory changes can be brought before Missouri voters in November 2012, signatures must be obtained from 5 percent of registered voters in six of the state’s nine congressional districts by May of next year.

Coalition Challenges Shumlin To Produce Stats On Cigarettes Tax Increase

In the wake of the Governor’s efforts to push the Senate last week to reduce a cigarette tax increase by $.47, a statewide public health coalition challenged the Governor today to back up his claims against the tax with actual statistics.

The Vermont Senate on Friday rejected a proposed $1.00 increase in the tax after much lobbying from the Governor, despite the fact that both the Senate Finance and Health and Welfare Committees strongly endorsed a $1.00 increase. Coordinator for the Coalition for a Tobacco Free Vermont, Tina Zuk said today, that the Coalition has years of evidence showing a significant increase in the cigarettes tax will get adults to quit, prevent kids from smoking cigarettes and raise much-needed revenue for the state while cutting health care costs. But, Governor Shumlin has strongly opposed the tax with no data supporting his claims.

“Seventy-six percent of Vermonters want a $1.00 increase and twenty-five years of research shows its effective, yet the governor continues to make unfounded claims against it. It’s time for the Governor to show clear evidence that a significant increase wouldn’t work or give the green light to the conference committee that a higher tax is needed,” said Zuk.

The Coalition presented media and the Governor’s office with a report from the State’s own Joint Fiscal Office and a briefing book showing data behind the effectiveness of a substantial tax increase in reducing tobacco use and providing a sustainable revenue source for states. The Coalition urged the Governor to produce similar data to back up his claims that increasing the cigarette tax would not reduce smoking cigarettes and produce Vermont with revenue that even state economists have projected.

“The governor wants real health care reform, but to do so, it needs to be comprehensive and that means addressing tobacco head-on,” said Rebecca Ryan, director of Health Promotion and Public Policy for the American Lung Association. “Vermont was a national leader in reducing the devastating impact of tobacco use, but the state’s investment in programs to prevent kids from smoking cigarettes and helping adults quit has been dramatically reduced over the last three years. In addition, the evidence is clear that increasing the price of a pack of cigarettes is most effective at preventing kids from smoking cigarettes, Vermont has not had a significant increase since 2006 and the youth smoking cigarettes rate has not changed since 2005. By raising the price of a pack of discount cigarettes by at least 10%, Vermont has a tremendous opportunity to reduce the youth smoking cigarettes rate and prevent future health care costs. Why wait?”

Vermont Senate OKs Tax

The Senate wrapped up two days of stop-and-start deliberations on a $24.3 million tax package Friday with a 20-8 vote of support, followed quickly by a nearly unanimous vote for a $4.68 billion budget to operate state government next year.

The tax bill, which the Senate had to pass to fund its spending plan, included a 53-cent cigarette-tax increase, a compromise between the Senate Finance Committee's proposed $1 increase and Gov. Peter Shumlin's demand for no increase at all.

Senators rejected an amendment to raise income-tax rates on the two highest tax brackets for three years in order to raise an additional $16.7 million a year, but the lengthy debate Friday morning showed that more than just seven senators likely would support an income-tax increase in the future.

The cigarette tax compromise turned out to be unexpectedly difficult to achieve because Shumlin and Senate President Pro Tempore John Campbell, D-Windsor, took their differences to the Senate floor for a vote Thursday. Shumlin won a narrow 16-14 victory on a motion to delete the dollar increase, but he failed to persuade senators to go along with his alternative: a tax on dental services.

The Senate voted Friday to replace the proposed $1 increase in the cigarette tax with the 53-cent increase and a bigger tax on medical and dental insurance claims.

The Shumlin administration's dental-service tax is off the table. The final version of the tax package, which the House and Senate begin to negotiate next week, almost certainly will include an increase in the cigarette tax -- despite the governor's objections. The House proposed a 27-cent increase.

Sen. Anthony Pollina, D/P-Washington, suggested the $24.3 million revenue package wasn't enough. He argued the budget, which only he had voted against when it came up for preliminary approval, made too many cuts -- $38 million -- to important programs.

He said Vermont's wealthiest residents -- about 4,000 tax filers -- should be asked to share their resources with their neighbors in need. He reminded senators that people in the highest tax brackets benefited from significant tax savings as a result of Congress' decision to extend federal tax cuts.

"We talk a lot about values in this chamber," Pollina said. "There is no better reflection of our values than how we raise and spend Vermonters' money."

Sen. Richard Sears, D-Bennington, disputed Pollina's description of the harshness of the Senate's budget. Sears, who helped write the budget as a member of the Appropriations Committee, noted, for example, that only $1 million had been cut from a proposed appropriation of $200 million for the Choices for Care program, which helps keep elderly Vermonters in their homes rather than having to enter nursing homes.

"I'm dumbfounded by some of the conversation about the budget," Sears said.

Senate Finance Chairwoman Ann Cummings, D-Washington, made the case against supporting an income tax increase now.

"I would like nothing better than to vote for this amendment," she said. "I think I will -- but not until next year."

She said the Legislature likely would have to consider an income-tax increase and revisions to spending once it become clear how much Congress will shrink federal funding in order to bring down the deficit.

Sen. Randy Brock, R-Franklin, opposed the income-tax increase, too, saying people in the state's top tax brackets include small businesses. He called it poor policy to raise taxes on job-generators when the state is trying to expand employment opportunities and revitalize the economy.

Democrats split on the income-tax amendment, with seven supporting an increase now and 15 opposed. The Senate's seven Republicans stood together in opposition.

Senators made several other tweaks to the tax package before the final vote.

Lt. Gov. Phil Scott had to cast his first tie-breaking vote on one amendment that would extend an education property tax exemption to three nonprofit skating rinks used by public schools. He tipped the balance in favor after a 14-14 tie.

"These skating rinks provide for the physical education of Vermont students," Scott said in a statement released after his vote. "Without them, Vermont's schools would not have the facilities to support their hockey teams. This exemption reduces the financial burden on those rinks. I was proud to support Vermont schools with my tie-breaking vote today."

Senators seemed to have no energy left when it came time for final debate on the budget.

Sen. Vincent Illuzzi, R-Essex/Orleans, credited Appropriations Chairwoman Jane Kitchel, D-Caledonia, with leading the Senate to a spending plan that addressed as many needs as possible within significant financial constrictions.

"It was an open-door process, and everything was on the table," Illuzzi said. "The litmus test has been there have been only a few technical amendments offered."

$1 Cigarette Tax Is Likely Up In Smoke

A heavy lobbying campaign to increase Vermont’s cigarette tax will continue its legislative push in an effort to reduce smoking cigarettes rates while raising an additional $10 million in revenue.
House members recently voted on a 27-cent increase on the state’s cigarette tax (currently at $2.24) before the Senate voted last week on a 53-cent hike in the Miscellaneous Tax bill. But the Coalition for a Tobacco Free Vermont says that is not enough to discourage smokers from lighting up.
"We are strongly still championing at least a 10 percent increase. We would love a dollar because that would bring the best public health benefit to Vermont, but you need to have at least a 65 cent increase (that would be a 10 percent increase) ... studies have shown that at least a 10 percent increase is needed to have a public health impact," said coalition coordinator Tina Zuk.
"Twenty-seven cents is just not worth it, and it doesn’t even produce that much revenue for the state and it probably won’t have any public health impact because you need to have a significant increase for [smokers] to even notice it," she said.
Anti-smoking cigarettes groups have pressured lawmakers to support a $1 increase in the tax, citing the hike as the most effective way to prevent youth smoking cigarettes. Raising the tax would create a $10.2 million increase in new revenue as well, according to the coalition.
"I think it’s important to not only look at the budget now, but down the road. We can’t be short-sighted with what we’re doing fiscally now because we’ll pay for it later," Zuk said.
But Gov. Peter Shumlin, a first-term Democrat, has lobbied for a smaller tax bump to keep Vermont on an even playing field with neighboring states.
"I don’t object to cigarette taxes, but right now, Vermont has $5 million of unexpected cash for the 2011 budget because our cigarette tax is lower than New York and competitive with Massachusetts and New Hampshire. The result has been that people have flooded into Vermont to buy cigarettes. While they’re there, they buy other things in our stores," he said.
The administration also disputes the full $1 increase would bring in $10 million annually, saying Vermont could see a loss in sales instead because other states will reap the benefits of lower cigarette prices.
"Those who say a dollar increase will bring us $10 million are smoking cigarettes something other than tobacco," Shumlin told the Reformer. In the end, the General Assembly will go home approving a small increase in the cigarette tax, but it will not be "penny-wise and pound-foolish," he added.
Rebecca Ryan, director of Health Promotion and Public Policy for the American Lung Association, said Shumlin is pushing for real health care reform but will not address cigarettes use.
"Vermont was a national leader in reducing the devastating impact of tobacco use, but the state’s investment in programs to prevent kids from smoking cigarettes and helping adults quit has been dramatically reduced over the last three years," Ryan said. "In addition, the evidence is clear that increasing the price of a pack of cigarettes is most effective at preventing kids from smoking cigarettes, Vermont has not had a significant increase since 2006 and the youth smoking cigarettes rate has not changed since 2005."
Sen. Jeanette White, D-Windham, said the proposed cigarette tax and the rest of the Miscellaneous Tax bill heads to the Committee of Conference.
"The Senate committee ended up with 53 cents, so there were a lot of differences between the House version and the Senate version," she said. "The conference committee is set up with three Senate members and three House members and they go and they do the final bill."
Any final compromise between the two proposes are not likely to increase, but find a median between the two.
The coalition has actively lobbied for cigarette tax increases since 2002 when the levy jumped from 44-cents to $1.19, and another 80-cent hike in the next four years.
In 2009, the Legislature increased the tax to its current level of $2.24 per pack.

Coalition Challenges Shumlin To Produce Stats On Cigarettes Tax Increase

In the wake of the Governor’s efforts to push the Senate last week to reduce a cigarette tax increase by $.47, a statewide public health coalition challenged the Governor today to back up his claims against the tax with actual statistics.

The Vermont Senate on Friday rejected a proposed $1.00 increase in the tax after much lobbying from the Governor, despite the fact that both the Senate Finance and Health and Welfare Committees strongly endorsed a $1.00 increase. Coordinator for the Coalition for a Tobacco Free Vermont, Tina Zuk said today, that the Coalition has years of evidence showing a significant increase in the cigarettes tax will get adults to quit, prevent kids from smoking cigarettes and raise much-needed revenue for the state while cutting health care costs. But, Governor Shumlin has strongly opposed the tax with no data supporting his claims.

“Seventy-six percent of Vermonters want a $1.00 increase and twenty-five years of research shows its effective, yet the governor continues to make unfounded claims against it. It’s time for the Governor to show clear evidence that a significant increase wouldn’t work or give the green light to the conference committee that a higher tax is needed,” said Zuk.

The Coalition presented media and the Governor’s office with a report from the State’s own Joint Fiscal Office and a briefing book showing data behind the effectiveness of a substantial tax increase in reducing tobacco use and providing a sustainable revenue source for states. The Coalition urged the Governor to produce similar data to back up his claims that increasing the cigarette tax would not reduce smoking cigarettes and produce Vermont with revenue that even state economists have projected.

“The governor wants real health care reform, but to do so, it needs to be comprehensive and that means addressing tobacco head-on,” said Rebecca Ryan, director of Health Promotion and Public Policy for the American Lung Association. “Vermont was a national leader in reducing the devastating impact of tobacco use, but the state’s investment in programs to prevent kids from smoking cigarettes and helping adults quit has been dramatically reduced over the last three years. In addition, the evidence is clear that increasing the price of a pack of cigarettes online is most effective at preventing kids from smoking cigarettes, Vermont has not had a significant increase since 2006 and the youth smoking cigarettes rate has not changed since 2005. By raising the price of a pack of cheap cigarettes by at least 10%, Vermont has a tremendous opportunity to reduce the youth smoking cigarettes rate and prevent future health care costs. Why wait?”