Joint Revenue Committee Shoots Down Tobacco Tax

Director of the Wyoming Department of Revenue Dan Noble testifies in front of
the Wyoming Legislature’s Joint Revenue Committee in Buffalo, last Thursday.

By Tom Lacock
Wyoming Medical Society

On a vote of 9-4 the Wyoming Legislature’s Joint Revenue Committee decided not to draft a bill which would have increased the state’s tobacco tax from $.60 per pack of cigarettes to $.90 per pack. The vote came during the committee’s meeting at the Hampton Inn of Buffalo Thursday.

Wyoming’s current tobacco tax of 60 cents per pack ranks it as one of the 10 lowest per pack taxes in the country. Three other states who have lower per pack tobacco tax rates than Wyoming are considered tobacco growing states. Last year the state brought in $19,683,986 to its coffers thanks to the tobacco tax, and even a two cent per pack increase would have netted the state another $716,155, according to Legislative Service Office estimates. Money from the tobacco tax gets separated upon collection with 85.1 percent going into the state’s general fund and the rest going to cities, towns, and counties where the tobacco was purchased.

The original proposal for a tobacco tax hike came from Jason Mincer of the American Cancer Society’s Cancer Action Network. He asked for an increase of $1.25 per pack. Mincer said the smoking rate in Wyoming is above the national average and the smokeless tobacco rate was way above the national average. He added pregnant females in Wyoming are twice as likely to be smokers. He added that studies suggest a $1.25 per pack tax increase would have a particularly high likelihood to impact the smoking rates of children and pregnant moms.

Joining Mincer in testifying for the tobacco tax increase was the Wyoming Medical Society, as well as Wendy Ongaro, PA-C, director of the Sheridan Health Clinic. Ongaro said 50 percent of the clients to come through the Health Center’s doors smoke and cannot quit. Buffalo physician Grace Gosar, MD also lobbied for the tobacco tax increase pointing out the committee’s Co-Chair Mike Madden (R-Buffalo) had told the Buffalo Bulletin newspaper that he thought an additional $.40 per pack was a reasonable rate. She went on to point out that number would not bring the state into the national average and struggled to understand why the tax shouldn’t be increased.

“Tobacco does not do one thing to help a human being,” Gosar said. “I think it is reasonable that we at least move it up to the national average.”

Gosar was later challenged by committee member Mark Jennings (R-Sheridan) who asked why we should tax tobacco and not french fries or a large soda as each contributes to a health hazard. Gosar fired back that while fries aren’t specifically healthy, they do have a nutritional value, can do some benefit to the human body and the subject of the day’s meeting was tobacco tax as well as how it was assessed in Wyoming.

The tobacco lobby was well-represented and suggested Wyoming smokers are already highly taxed and that an increase would fight any bills drafted to raise that number.

Dave Picard, who lobbies for Altria Client Services and its affiliate Philip Morris USA, said Wyoming smokers are already paying their fair share, suggesting 54 percent of the per-pack cost in Wyoming is now tax. He added Wyoming Health Insurance Companies are allowed to charge up to 50 percent more on premiums for smokers and he said Wyoming Health Insurance companies are doing so already. Mike Moser of the Wyoming State Liquor Association pointed out a proposed tax increase of $1.25 wasn’t really a tax of $1.25 per pack as much as it was $12.50 per carton.

“Smokers don’t buy packs,” Moser said. “It makes a road trip to a retail outlet to another state worth it. Small businesses are already on the ropes. As difficult as times are now, this would not be a good thing to do.”

Mark Larson of the Colorado Wyoming Petroleum Marketers Association suggested increased taxes will lead to increased store theft of cigarettes, while crossover sales from other states, as well as smuggling cigarettes into Wyoming. He challenged a Wyoming law that does not charge tobacco tax for Native Americans on the Wind River Reservation. Buck Mcveigh of the Wyoming Taxpayers Association also opposed the tax as it requires one segment of the population to bore the burden of the tax. He added studies he had seen suggested a tax increase would not produce the level of decline in the use of cigarettes that had been suggested.

After debate the motion was made by Madden to raise the tobacco tax increase to $.60 per pack. While smokeless tobacco is taxed differently and would be exempt from an increase unless another bill were written, Madden said the Legislature’s Management Council had asked that the Revenue Committee concentrate on cigarettes this interim.