BUFFALO -- A legislative panel recommended a tobacco tax increase Tuesday morning to curb the state smoking rate, although it did not weigh in on what that rate should be.
Members of the Joint Labor, Health and Social Services Interim Committee also created a funding priority list from more than 20 state programs that use payments and interest from the Tobacco Settlement Trust Income Account, which earns money from cigarette companies as a result of a 1998 lawsuit. The account is projected to have a $14.6 million shortfall by 2018.
To cut smoking rates, the state must increase the tobacco tax enough that people notice the difference when buying a pack, Jason Mincer, of the American Cancer Society, told the committee.
If the Legislature were to increase the tax by $1 a pack, the state would generate an estimated $21 million a year in new revenue. About 2,300 premature smoking-caused deaths would be prevented, 4,000 current adult smokers would quit, and $1.3 million would be saved from fewer smoking-caused heart attacks and strokes over five years, he said.
However, lawmakers on the committee never decided on a figure by which the state should increase the tobacco tax, in part because American Cancer Society figures conflicted with a rough estimate from the Wyoming Attorney General’s Office that 4 million packs of cigarettes were sold in the state each year, meaning a $1 increase in taxes would generate only $4 million -- and less when people quit.
The Labor and Health committee’s recommendation will also include a note that smoking-related diseases increase the cost of health care for everyone -- whether they are part of government insurance programs, private insurance or are uninsured.
The recommendations will be sent to the Joint Revenue Committee, which meets next month in Cheyenne. That committee will decide whether to draft a bill to increase the tax for cigarettes, smokeless tobacco and other tobacco products.
The state programs prioritized are fully or partially funded by the tobacco settlement account.
The Labor and Health committee’s top priority was the Attorney General’s efforts to ensure Wyoming is in compliance with its obligations under the Tobacco Master Settlement Agreement, which is the document that states and cigarette manufacturers signed after the lawsuit over public health costs of smoking.
Committee co-chairwoman Rep. Elaine Harvey, R-Lovell, said the program was the most important to be preserved.
“That’s where the money comes from,” she said.
The settlement money is for the indefinite future, the AG’s office told lawmakers.
The second priority was three Wyoming Health Department programs: A substance abuse prevention program for tobacco prevention and cessation and two programs to screen for breast, cervical, colorectal and other cancers for uninsured and underinsured Wyomingites.
The lowest-priority programs were a Department of Corrections program that is no longer operating and funding for the state health officer, a Health Department position, that receives 7 percent of its budget from tobacco settlement funds.
Lawmakers had different philosophical reasons for wanting to raise the tax.
Harvey, committee co-chairwoman, wanted to raise the tax to cover the entire settlement shortfall.
“I think there are programs that are good for public health, and I think the tobacco settlement funds are an appropriate revenue stream for those programs,” she said.
But Sen. Ray Peterson, R-Cowley, questioned that.
“A lot of these programs were built with tobacco trust settlement funds,” he said. “Now, there’s not enough money in the fund to continue the programs. We’re growing this monster with settlement funds. To defeat the monster we’re going to have to raise taxes. Why?”
Rep. Norine Kasperik, R-Gillette, voted against the recommendation to raise cigarette taxes. She believes programs should be cut first before taxes increase.
“It takes a considerable increase to decrease smoking,” she said.