WV Tobacco tax proponents say measure will save money

By Rusty Marks
Posted: Apr 28, 2016 2:29 PM EDT
Updated: Apr 28, 2016 3:23 PM EDT

West Virginia will save tens of millions of dollars in medical costs if lawmakers increase the taxes on tobacco products, local health care providers say.

Members of the policy research group West Virginia Center on Budget & Policy and local health care providers hosted a news conference Thursday, April 28 to urge state lawmakers to increase the tax on cigarettes from 55 cents to $1.55 per pack. They said the increase will both help make up for a $270 million shortfall in the state budget and discourage state residents from smoking.

West Virginia leads the nation in the number of children who smoke and the number of women who smoke during pregnancy. Amy Tolliver, director of the West Virginia Perinatal Partnership, said 28 percent of he approximately 21,000 babies born in the state every year are born to mothers who smoke. About 40 percent of births paid for by Medicaid are to mothers who smoke.

Those in favor of the $1.55 cigarette tax say a significant hike in the tax on cigarettes and other tobacco taxes is needed to convince tobacco users to kick the habit.

Brooke Drake, who has been smoking since she was a teenager, said smokers complain about raising tobacco taxes by a few cents, but said many will not decide to stop completely unless they’re hit hard in the pocketbook.

“The only thing that will get people to actually quit is a full $1 increase,” she said.

Gov. Earl Ray Tomblin proposed raising the tobacco tax from 55 cents a pack to $1, along with raising taxes on other tobacco products. The proposal would have brought in an estimated $70 million a year.

During the regular legislative session, the state Senate voted to raise the cigarette tax to $1.55 a pack and increase taxes on other tobacco products and the liquid used in electronic cigarettes. But the proposal died in the House of Delegates.

Ted Boettner, director of the nonprofit, non-partisan research group the West Virginia Center on Budget & Policy, said raising the cigarette tax to $1.55 would bring in about $135 million a year, but will also save the state tens of millions of dollars a year in the long run  in health care costs.

Opponents to raising the tax on tobacco products say the tax hits poor people — who are statistically more likely to smoke — harder  than wealthier people, who are less likely to smoke and better able to pay more for cigarettes. Boettner agrees, but also said the hefty price increase is more likely to make poor people stop smoking.

Opponents also say a tobacco tax will bring in less and less money as more an more people quit smoking, and point out that raising the tax too much will make people who live in neighboring states with higher tobacco taxes stop coming to West Virginia to buy tobacco products.

“Why do we want to be known as the place for cheap tobacco?” Boettner asked. He said the proposed $1.55 tax is still less than in most neighboring states.

Boettner agreed that tax revenue from tobacco taxes might go down in the long run if more people stop smoking, but said the difference will be more than offset by lower health care costs. “The gains far outweigh the loss,” he said.

Members of the state Legislature left the regular session in March without being able to agree on a budget, as required under the state Constitution. Tomblin will have to call a special session to get a budget passed, but members of the House and Senate have yet to work out budget deal.

Senate leaders believe new revenue sources like an increase in the tobacco tax will be necessary to balance the budget, but a sizable group of delegates in the House remain adamantly opposed to any new taxes.

See the original story at The State Journal