$1.00 Per Pack Cigarette Tax Being Considered

Charleston, WV – One of the largest tax increases in the history of the state is underway as the WV Senate Finance Committee cleared the path for increasing cigarette taxes from $0.55 per pack to $1.55 and other tobacco products from 7% to 50%. The state estimates the increased revenue to be around $128.8 million dollars per year. Of this new money, the largest allotment, $50 million, would be dedicated to public retiree’s health costs; $40 million would go to Medicaid, $6 million to anti-tobacco efforts, and $1 million to create a proposed school of public health. The remaining revenues would be support oral health, substance abuse, in-home senior care, and early childhood development programs. The WV House of Delegates also passed a similar bill out of committee and are expected to vote on it soon. The original House version includes slightly lower tax increases and funnels 50% of the revenue to the state’s general operating fund and the other 50% to the “Governors Office of Health Enhancement and Lifestyle Planning Fund”.

The proposed tax increase would raise West Virginia’s cigarrette tax from the 44th lowest in the nation to the 22nd highest. The tax would be higher than neighboring states like Ohio and Kentucky, who have a $1.25 and $0.30 per pack tax respectively; however, it would be well under that of Maryland’s $2.00 and just under that of Pennsylvania’s $1.60.

Opponents claim that increasing tobacco taxes would simply send business out of the state. Chris Marr, a tobacco lobbyist, predicts that such an increase would cost retailers 40% of their annual sales, or $400 million, and 1,000 jobs throughout the state. State Senator Truman Chafin (D-Mingo) warned that his county would suffer drastically due to competitors just a few miles away in Kentucky who would be able to sell tobacco at significantly lower prices. One small business owner in Virginia, Raymond Walker, who owns the Pop Shop just a few hundred yards from the WV border in Virginia claims that 90% of his business is already from West Virginia and that if the taxes go even higher in West Virginia he expects to see his business double.

Meanwhile, the public opinion gauged at a House of Delegates public hearing were varied. Nearly 30 people spoke, and the opinions were somewhat predictable. Public health advocates like Chantal Fields of the American Lung Association claimed that the state spends $690 million per year on tobacco related health costs and raising tobacco taxes would strongly curb tobacco use. On the other side, opponents like Regan Bartlet, part owner and marketing director for Smoker Friendly, a chain of tobacco stores, claims that she is simply trying to save people’s jobs by opposing the bill. She and others believe that people will cross state lines to avoid higher prices.

The bill still has a long way to go, it still needs the support of a majority of the WV Senate, House of Delegates, and that of acting Governor Earl Ray Tomblin, all of which have been historically reluctant to raise taxes.

The Senate bill being considered is SB 362 and the corresponding House is HB 2973.

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Posted on February 26, 2011, in Legislation, News and tagged , , , , , . Bookmark the permalink. Leave a comment.

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