5/17/2016

May 17, 2016
Committee approves tobacco tax increase
The Senate Finance Committee approved a 45-cent increase in
tobacco products this afternoon, after defeating 9-to-8 a motion
to increase the tax by $1.00.  The Governor requested a 45-cent
increase, which is expected to generate $79 million in revenues.
The current cigarette tax in WV is 55-cents, while the taxes in
neighboring states are: 30-cents in VA; 60-cents in KY; $1.25
in OH; $1.60 in PA; and $2.00 in MD.  The tax will be $1.00 in
WV if the Senate and House agree on the increase.
The Committee also approved a 12% tax on e-cigarettes by a
unanimous voice vote, a measure also called for by the chief
executive.
The Committee went on to approve $43 million of the $79 million
to be dedicated to PEIA, which faces a $129 million deficit.  The
balance of the PEIA deficit will be made up with addition taxes,
in part, also called for by the Governor.  The vote was 17-0 to
put the money in PEIA.
Lawmakers are striving to keep PEIA deductibles and copays
paid by insureds at a minimum by imposing tax increases.  It
was noted by the Senate Finance Committee today that PEIA’s
reserve fund was depleted over the past three years by keeping
insureds’ copays and deductibles at their current level.  Current
law requires insureds to pay 20% of the program’s cost while
the state pays the 80% balance.