5/19/2016

Senate passes tobacco tax
The Senate passed SB 1005 today 17-16-1, increasing the tax on cigarettes
by 45-cents, up from the current 55-cents to $1.00.  The bill was first approved
by the upper chamber yesterday after motions to amend the bill failed during
the one and one-half debate.
Along with the increased tax on cigarettes, SB 1005 calls for increasing the tax
on smokeless tobacco from 7% to 12%, and imposing a new tax of 7.5% per
milliliter on e-cigarettes.
WVDA has advocated a $1.00 increase in the cigarette tax, and even a higher
taxes on other products.
Some of the amendments to the proposed legislation failing during the debate
included eliminating the increased tax on smokeless tobacco by Senator Ryan
Ferns, chair of the Senate Health Committee, and increasing the cigarette tax
by $1.00 which was introduced by Senator Roman Prezioso, a member of the
Senate Health Committee.
Ferns withdrew his amendment after Senator Tom Takubo, a physician and
member of the Health Committee, said he would not vote for eliminating the
tax on smokeless tobacco.  Senator Ron Stollings, a physician and another
member of the Health Committee, spoke against Fern’s amendment saying he
was embarrassed that the Senate was doing the bidding of tobacco lobbyists,
whom he said were watching from the rear of the chamber during the debate.
Senator Prezioso withdrew his amendment for a $1.00 increase after Senate
leadership said the House would not accept it.
SB 1005 dedicates $43 million of the tobacco tax revenue to PEIA, which has
a $129 million shortfall in the coming year beginning July 1, 2016.  Premiums
paid by employees will increase 12% to make up the difference.  The bill also
dedicates $1 million to tobacco education.  The balance of the estimated $79
million in new revenues is to go to general revenue.
Senator Stollings said the proposed legislation does not solve the PEIA and
Medicaid financial problems both of which are increasing because of health
care costs, which, in part, are caused by tobacco use.  He said we are only
“kicking the can down the road” with this legislation.   Medicaid officials told
the Senate Finance Committee today they did not expect cuts to providers,
but reimbursement may be delayed.