Advocates make renewed call for $1 tobacco tax increase

By Lydia Nuzum, Staff Writer, Charleston Gazette-Mail
Thursday, April 28, 2016

Proponents of a $1 increase in West Virginia’s tobacco tax said Thursday that the struggling proposal is a “no-brainer” for the state with some of the highest rates of smoking among both teens and adults and an existing tax lower than that of 45 other states.

On Thursday, a coalition representing members of the state’s health care and education systems, faith-based groups, public health agencies and citizens renewed the call for a $1 tax on cigarettes and other tobacco products sold in West Virginia.

The state’s adult smoking rate is the highest in the nation — 26.7 percent of West Virginians smoke, according to 2014 Behavioral Risk Factor Surveillance System data. Its adult smoking rate has not declined significantly in nearly two decades, despite a marked decline in surrounding states and across the nation.

Between 1995 and 2010, the daily smoking rates of adults in Kentucky, Ohio and Tennessee dropped to below 20 percent of the population and below 15 percent of the population in Virginia and Pennsylvania. West Virginia’s rate never fell below 20 percent during that period, and it even increased between 2005 and 2010 to nearly the level recorded in 1995.

Its current taxation rate for tobacco is one of the lowest in the country at 55 cents per pack — lower than the tax rate for every state that borders it except Virginia, which, because it allows municipalities to impose a tax on top of the 30-cent state tax, has several cities with higher tax rates than West Virginia.

Ted Boettner, executive director of the West Virginia Center on Budget and Policy, said the tax increase could help make up for the state’s revenue shortfall and continued budget cuts in the short term and discourage people from smoking in the long term. The state’s current deficit for this year is an estimated $270 million. Combined with roughly $100 million in budget cuts and other proposed cuts and losses, it could mean a total shortfall of nearly half a billion dollars, Boettner said.

“I think raising the tobacco tax to $1.55 from 55 cents, while it’s not going to solve all of our problems, will help us deal with our shortfalls today and improve our long term physical health,” he said. “The whole goal is that it will be a declining source of revenue over the long term, because that means people are quitting smoking.”

Opponents of the increase have argued it would hurt the state economically by discouraging out-of-state residents from crossing into West Virginia to buy cheaper tobacco products, but Boettner said that concern should take a backseat to the economic stimulation that would likely come from increased worker productivity.

“Why does West Virginia need to be known as the cheap place to buy tobacco? That’s not a very good economic development strategy,” he said. “We’re trying to make sure West Virginia has more long-term customers, and that means increasing productivity by improving people’s health.”

In January, Gov. Earl Ray Tomblin proposed a $71.5 million tobacco tax hike, or an additional 45 cents to every cigarette pack purchase, raising the total tax to $1 per pack. Tomblin said the increase would “strike a balance, protecting retailers in West Virginia counties that border other states, while discouraging people from smoking.”

Dr. Paula Taylor, president of the West Virginia State Medical Association, said that strategy, which ultimately failed to gain support from the Legislature, would prove ineffective because the tobacco industry is prepared to absorb small tax increases to keep tobacco products affordable.

“We get into these arguments: ‘You can’t have your dollar, but you can have 20 or 30 cents.’ Studies have shown that these small increases are diluted by manufacturers and companies who can offset them by special promotions and couponing,” Taylor said.

Nearly a quarter of pregnant women in West Virginia reported smoking during their pregnancy in 2014, and that rate jumps to 42.4 percent among women covered by Medicaid, according to the West Virginia Department of Health and Human Resources.

The coalition believes an increase to the tobacco tax would help curb those rates and could help stabilize the state’s expanded Medicaid program. Earlier this week, the state sent letters to health care providers warning Medicaid payments would be delayed as a result of the continued uncertainty surrounding the budget.

Program cuts, including cuts to the state’s PROMISE scholarship program and the elimination of thousands of positions across several state-level departments, have been floated as solutions to the problem.

Patricia Rouse Pope, executive director of the West Virginia Association of Free and Charitable Clinics, said the state’s 10 free clinics are in danger of funding cuts, despite serving more than 40,000 uninsured and under-insured residents every year.

“All told, the $2.75 million [we receive] yields about $68 million in health care for needy West Virginians,” she said. “The tobacco tax could serve as one of the solutions to the state’s budget crisis, which we all know how devastating those could turn out to be … the free clinic line item has taken almost a 50 percent hit over the last three years, and the clinics have continued to tighten their belts.”

Reach Lydia Nuzum at,
304-348-5189 or follow @lydianuzum on Twitter.

See the original article at the Charleston Gazette-Mail