House OKs 50-cent hike in cigarette tax; health advocates say $1 needed to have any health benefit; fate in Senate is uncertain

The House roll call (Photo by Tom Loftus, Courier Journal)

By Melissa Patrick
Kentucky Health News

The state House approved a bill Thursday to raise the state cigarette tax by 50 cents a pack, to $1.10. Though the bill passed 68-25, its tax increases face an uncertain future in the Senate.

The increase was sold primarily as a way to pay for pensions and education in a companion budget bill, and as a way to decrease smoking -- the leading cause of diseases that give Kentuckians some of the poorest overall health in the nation.

The coalition leading the fight for a $1-a-pack increase disagrees with the second part of the argument, saying that anything less than $1 would simply be a regressive tax, hitting the poor hardest, and would have no lasting effect on the state's smoking rates or its overall health.

The Coalition for a Smoke-Free Tomorrow said increases of less than $1 would be offset by tobacco-company coupons and discounts, followed by incremental increases in pricing to make up lost profits, leaving as many Kentuckians still smoking, but paying more for their cigarettes.

"Some legislators may believe that 50 cents is a good compromise, but the truth is that Big Tobacco only supports this small increase because they know it won't reduce smoking," said the coalition, comprised of more than 150 groups supporting efforts to decrease smoking in Kentucky. "Low income smokers and their families already suffer disproportionately from the ill health effects of smoking, and a 50-cent tax increase will do almost nothing to help them."

Other health advocates said likewise.

"We urge the legislature to increase the tobacco tax by at least $1 to be able to achieve the health goals of reducing smoking rates among youth and pregnant women," said Dr. Terry Brooks, executive director of Kentucky Youth Advocates.

Erica Palmer Smith of the American Cancer Society's Cancer Action Network, said a $1-a-pack increase would make 29,000 Kentucky adults quit smoking and 23,000 Kentucky kids never start smoking. "If we see an increase of only 50-cents, we're not going to see those benefits," she said. "We are going to see zero public health benefits," she said. "So if lawmakers choose to raise this tax by less than $1, they are doing it for the sake of raising taxes, not for the sake of anything related to public health."

Such estimates come from "some really good studies that have actually shown that if you raise the tax by less than $1, then you don't sustain or actually achieve the health benefits," Louisville allergist Douglas Lotz said at a Feb. 27 rally in Frankfort to promote raising the $1 tax.

Josephine Mei, a Louisville pulmonologist who spoke at the rally, said of the opposition, "The tobacco industry is willing to take a loss for a short-term period. They can discount, they can give coupons. But what they need are smokers. If they have smokers, there is a lifetime of purchasing. . . . If we can get them to not start, that is a loss to them."

She also noted that 70 percent of Kentuckians support raising the cigarette tax by $1. "This is what the people want and the legislators are there to do what the people want -- they are not supposed to be doing what the tobacco industry wants," she said.

Rudy (Legislative Public Information photo)

The bill's sponsor, Appropriations and Revenue Committee Chair Steven Rudy, R-Paducah, disagreed.

"We think that 50 cents is something, a dollar amount that will curb the amount of smokers in Kentucky, and we think that we will not do harm to our good retailers with those cross-border states," Rudy said.

The per-pack tax is 99.5 cents in Indiana, $1.60 in Ohio, 62 cents in Tennessee, $1.98 in Illinois, $1.20 in West Virginia, 30 cents in Virginia and 17 cents in Missouri; the last two are the nation's lowest.

The bill also includes what Rudy said would be the nation's first tax on doses of opioids prescribed in a state and the elimination of a $10 personal tax credit for Kentucky taxpayers. It would generate $250 million a year.

During the more than one-hour floor debate, several members expressed concern that Rudy did not know if the Senate would vote for the tax increases, thus making it a dangerous vote politically. All House seats are on the ballot this year.

Rep. Jim Wayne, D-Louisville, called it a "risky vote" that should be saved for comprehensive tax reform. "This tax proposed in this bill is really for many Kentuckians a tax on the poor," he said. "It is not balanced with other taxes that would lift the burden on the poor."

Sen. Steve Meredith, R-Leitchfield, said in an interview that while he supports raising the cigarette tax by $1, "50 cents is a good start" and that he thought "in the context of the whole budget, it would pass." Meredith filed a bill earlier this session to raise the cigarette tax by $1.

Asked separately if the Senate would vote for a cigarette tax, Sen. Ralph Alvarado, R-Winchester, said, "People are warming up to it." Alvarado, a physician, said 50 cents is a "big deal" but not enough to have any "true health impacts," so "I'm still advocating for a full dollar. . . . If we're going to vote for a tax and push it through, I think it should be at least $1, in my book. I think there are a lot of other members who feel the same way."

The last cigarette-tax increase, 30 cents in 2009, was accompanied by a doubling of taxes on other tobacco products. Rudy said his bill includes only cigarettes because no more revenue was needed to pass the budget. Another possible factor: Kentucky has a relatively large smokeless-tobacco industry.

The bill is House Bill 366. The budget bill is HB 200. For details go here.