Tobacco tax Story Archives - West Virginia Public Broadcasting

Tobacco Cessation Bills Fail In 2023 Legislative Session

During the 2023 West Virginia Legislative session, lawmakers considered two bills to lower the state’s smoking rates. Both bills were sent to Health and Human Resources Committees and neither moved any further.

Those bills were Senate Bill 84 and House Bill 2051.

Doug Hogan, the government relations director of the American Cancer Society Cancer Action Network (ACS CAN), worked directly with Sen. Tom Takubo, R-Kanawha, in writing Senate Bill 84.

“He’s carried that a couple of times for us,” Hogan said. “And obviously, you know, at this point, we would just like to get a hearing. Eighty-four is one that we really spent a lot of time on and we’re invested in.”

Tobacco companies spend $107.9 million per year to market their products in West Virginia, while the state allots just $445,000 to tobacco prevention and cessation programs in the operating budget.

“West Virginia has both the highest adult smoking rate and the highest high school tobacco use rate in the country,” Hogan said. “Those are two huge indicators that we’re not doing enough to provide fact-based tobacco control measures and education and programming within the state to try and break that cycle of generational tobacco usage. And so we were hoping that the legislature would increase the funding for those tobacco prevention programs here in the state, the governor’s task force recommended $16.5 million.”

According to the American Lung Association’s 2023 “State of Tobacco Report,” West Virginia lags behind when it comes to tobacco control policies. As a result, the state’s average smoking rates are 22 percent of adults and 40.6 percent of high school students.

“We’re trying to break that trend to break that generational tobacco usage,” Hogan said. “And that’s really why we were hopeful that we would see a significant increase in the amount of funding for the tobacco prevention programs in West Virginia. I mean, the evidence is clear.”

West Virginia continues to rank 50th in the nation when it comes to tobacco control and cessation programs.

Cigarette Tax Hike, Other West Virginia Laws Taking Effect

Cigarettes are getting more expensive in West Virginia.

To balance the state budget, West Virginia will raise its cigarette tax by 65 cents to $1.20 a pack starting Friday. E-cigarette and other tobacco product taxes will also increase. The hike is expected to raise $98 million annually.

The move helps fill a budget hole left by sputtering coal and low natural gas prices.

July 1 starts the budget year, and several other laws also are taking effect.

Coal and natural gas producers will get a tax break of $110 million combined. They had been paying surcharges to cover a workers’ compensation debt for years.

A right-to-work law is kicking in. New and updated collective bargaining agreements starting Friday can’t require workers to pay union dues as a condition of employment.

After Veto, Budget Session will Resume Saturday

A spokesman for the House of Delegates says lawmakers will tentatively return to Charleston Saturday to once again work on the state’s budget for the 2017 fiscal year.

On Wednesday, Gov. Tomblin vetoed the budget plan approved by lawmakers on June 2. That plan relied on more than $180 million from the state’s Rainy Day Fund to help close a $272 million budget gap for the upcoming fiscal year.

In his veto message, Tomblin called the plan “irresponsible,” saying it set the state up for even larger revenue shortfalls in 2018 and 2019.

Tomblin and members of the Senate reportedly have agreed to the passage of a 65 cent increase on the state’s cigarette tax as a way to generate new revenues.

In a press release Wednesday, Tomblin said he “strongly urged” members of the House to adopt the plan.

Lawmakers were scheduled to return to Charleston Sunday, but will comeback to town a day earlier. The Senate will hold a floor session at 11 a.m. and the House of Delegates at 2 p.m.

It would take a two-thirds vote of both chambers to override the governor’s budget veto. Neither chamber was able to approve the original budget plan with two-thirds of the vote.

W.Va. House Kills Tobacco Tax Hike

The West Virginia House of Delegates voted 44-55 Thursday to kill a bill that would have increased a tax on tobacco products. The bill was designed to help fill a $270 million budget gap for the upcoming fiscal year.

Senate Bill 1005, as amended in the House, would have increased the state’s cigarette tax by 45 cents, making it a full $1 per pack.

Of that hike, the first $1 million would have gone toward the state’s tobacco cessation program, the next $43.5 million would have been dedicated to PEIA, the state public employee health insurance program, and the remaining balance would have gone to the general revenue budget.

The bill would have also increased the tax on all other tobacco products, including smokeless tobacco and cigars. It was amended in the House to remove a new tax to be placed on e-cigarette liquids, which was in the bill as approved in the Senate.

Several Republican members of the House spoke of the health impacts the bill would bring, such as deterring pregnant mothers and teens from smoking. Others cited potential cuts to state programs if revenues aren’t increased.

“This bill has been dealt to us. One of six whole bills dealt to us. That’s what we have to work with–six bills,” said Del Tom Fast.

“I may hate the thought of increasing taxes but I can’t stand the idea of cutting worthwhile programs like PEIA and the PROMISE Scholarship.”

Many Democrats argued 45 cents is not enough to deter people from beginning or continuing to smoke, including Del. Don Perdue.

“I believe 45 cent tax must die for larger tax to live. I also submit that if we pass 45 cent tax, it will be another decade before you see another tobacco tax increase,” said Perdue. “[The tobacco lobby] will own us for another ten years.”

While many Republicans opposed the bill and stood by a pledge of no new tax increases, others cited the need for revenue in the budget.

“This bill is a critical component to balancing our fiscal year ‘17 budget that passed out of the House Finance Committee yesterday,” said House Finance Chair Eric Nelson, who closed discussion of the bill following three hours of debate.

“This bill is the art of compromise and balance.”

In total, Senate Bill 1005 would have resulted in $76 million of additional revenue for the state.

Both current Senate and House versions of the budget — under consideration in their respective chambers — presumed that the tobacco tax hike would pass.

With the budget still looming, Governor Tomblin expressed disappointment with the failing of the bill, stating that tax revenues were critical to achieving a balanced budget.

“You can’t build a structurally balanced budget on one-time money. Both the cuts they have identified to take out of the existing appropriations out there as well as the Rainy Day Fund,” said Tomblin.

“That’s one time money. Once they’re gone, they’re gone. It’s kicking the can down the road.”

In the initial call for the special session, Governor Tomblin had also proposed new taxes on telecommunication devices such as landlines and cell phones, as well as a sales tax increase of up to 1 percent. Neither measure has yet to move at all.

W.Va. Senate Approves Tobacco Tax Hike, Leadership Starts Talking Final Budget

By a narrow margin, state Senators have approved a tax that will generate some $70 million annual in state revenues.

Senators voted to increase taxes on tobacco products in West Virginia 17-16–with all but one Democratic member of the chamber voting against it and one Republican member, Sen. Robert Karnes, leaving the chamber minutes before the vote.

The bill increases the state’s cigarette tax by 45 cents per pack, increases taxes on smokeless tobacco products, and creates a new tax on e-cigarette liquids.

The first $1 million generated by the new tax would be dedicated to the state’s smoking cessation fund. The next $43.5 million is dedicated to funding PEIA, the state’s Public Employee Insurance Agency, although the additional revenues do not fully fund the program to avoid rate increases for state employees.

“I would hate to be the person that voted no on this bill,” Senate Majority Leader Mitch Carmichael said after the vote. “It’s indefensible; it’s just completely ridiculous to vote no on that bill.”

Senate Minority Leader Jeff Kessler said his caucus, with the exception of Kanawha County Sen. Corey Palumbo, chose to vote no because the majority has yet to share with them a comprehensive plan to balance the 2017 budget.

“We pass this, that creates $70 million, perhaps, but that still leaves a $200 million budget deficit,” he said. “How are we going to fix it?”

The Senate majority plans to present its final budget proposal to the chamber’s Finance Committee Monday. With the passage of the tobacco tax bill, Carmichael said the bill will likely include a 2 to 3 percent cut across the board for all state agencies with the exception of public education and the Department of Health and Human Resources.

That across the board cut, according to Carmichael, would account for $20-30 million. The majority leader said there is another $10 million to be found in various programs in the state Department of Education and the rest will come from Rainy Day.

Carmichael said once the bill is approved in the committee, it will be put on a fast track on the Senate floor. He expects a final vote in the upper chamber Tuesday.

PEIA Board Fights Budget Bill

With less two days left in the 2016 Legislative Session, members of the Finance Board for the Public Employee’s Insurance Agency, or PEIA, have serious concerns about the changes to the state budget with regards to the agency’s funding.

The budget bill, containing a line item to take $67 million dollars from the state’s rainy day fund and other special accounts in order to fund PEIA, was debated for several hours on the House floor Friday.

During this session, the Democratic Party has criticized the majority for ignoring the need for additional funding to PEIA, while some Republican members argue the current budget does fully fund the program.

In a press conference this morning, six people spoke in direct opposition the current budget bill, saying there is no agreement between the House and Senate leadership on how to fund PEIA, an agency that provides health care coverage for more than 230,000 West Virginians.

Joshua sword is Secretary-Treasurer for West Virginia AFL-CIO and a member of PEIA Board.

“We’re facing roughly $50 million to $60 million dollars in inflation every year, as well as adding new people to the book, so we’re roughly $100 million short for the next plan year,” Sword said. “The legislature promised us that they were going to come up with a dedicated revenue stream for 2016 and beyond and here we are at days 59 and 60 and they haven’t done that.”

PEIA has seen no additional funding for the past few years, yet an increase in membership and rising prices. In previous years, the agency was able to offset benefit reductions with reserve funds, which came from what could basically be considered a savings account the agency built up with excess revenues over the years. Sword says dipping into the one-time dollars is a temporary fix, one that will leave the program even worse off next year.

“The problem that creates is that it might make it okay or doable for the plan year 2017, but when we start talking about plan year 2018, we have to make up that $67 million plus the additional rate of inflation we’re facing for the following year,” Sword said. “It puts us right back in the same place where we were when we start this discussion a few months ago, at roughly $120 million in benefit reduction for the next year.”

House Finance Chairman, Eric Nelson, defended his committee’s budget on the floor Friday, saying they had to consider all options in the extremely tight budget year.

“I will say that our budget is in very difficult time right now,” Nelson said. “Whether it be revenue measures or other expense cuts, or additional cash sweeps, all of those are on the table and need to be on the table. A 60-day session is not sufficient time for this body to be prudent.”

Other Republicans defended the measure as well, including Delegate Michael Ihle, who is also the mayor of Ravenswood.

“We’ve heard a lot about 1 in 6 or 1 in 7 West Virginians, who get PEIA,” Ihle said. “What about the other six out of seven? Many of whom have had their insurance skyrocket by a lot more than 12 percent, if they’re even lucky enough to have insurance.”

Earlier this session, a bill was killed in the House Finance Committee that would have increased the tax on a pack of cigarettes by one dollar. The Senate had approved the tax and dedicated some of the revenues to the PEIA reserve account, allowing the program to help sustain itself into the future. Both Democrats and Republicans voted against the bill in the Committee.