CHEYENNE — Lawmakers killed a bill Thursday afternoon that would have increased the tax on a pack of cigarettes tax by 30 cents, slashing millions in potential revenue that had been earmarked to pay for mental health.
The Senate Revenue Committee defeated House Bill 151, 3 to 2, said Sen. Ray Peterson, the panel’s chairman.
The bill sunk after testimony from retail and public health groups in opposition to the tax, said the Cowley Republican, who voted in favor of the bill.
“I think if the American Cancer Society would have supported it, it would have helped a little bit,” he said. “Legislators were probably thinking in their minds, ‘Why should I stick my neck out and support this?’”
In conservative Wyoming, taxes are disliked. Lawmakers can face opponents in the next election season who challenge them on raising taxes.
HB151 would have made the total tax 90 cents a pack. The measure’s sponsor, Rep. Mike Madden, has said 30 cents only represented the cost of inflation since the last tax increase, in 2003. Sixty cents in today’s values would be 93 cents, added Madden, an economist.
But the American Cancer Society’s government relations arm said the tax increase needed to be higher.
“We need the tax to be considerably more in order to see reductions in tobacco use for both adults and youth, which translates to fewer people being diagnosed with cancer,” said Jason Mincer of the society’s Cancer Action Network.
Peterson said groups representing convenience stores and other retailers testified that many residents in surrounding states drive to Wyoming to pick up packs of smokes, since the Cowboy State’s prices are lower. They opposed the bill.
In the end, Peterson and Sen. Jeff Wasserburger, R-Gillette, were the only members of the committee to vote in favor of HB151.
Sens. Cale Case, R-Lander, Affie Ellis, R-Cheyenne, and Dave Kinskey, R-Sheridan, opposed the bill.
The bill was estimated to provide $9.3 million a year in new revenue to state and local government.
In a budget bill before the Wyoming Legislature, $3 million of that new revenue was directed to the Wyoming Department of Health to pay for the cost to involuntarily commit people who are a threat to themselves and others. In recent years, the cost of involuntary commitments has far exceeded the $2.2 million a year the Legislature has been providing the Health Department.
Rep. Albert Sommers, who is a member of the Joint Appropriations Committee, said that the Senate last week eliminated the earmark. However, the provision had remained intact in the House, and the two chambers were expected to negotiate the differences.
But with the bill dead, so dies the proposition of using the money to fund involuntary commitments.
Rep. Charles Pelkey, D-Laramie, said it was disappointing the tax increase was defeated. He blamed lawmakers who signed a pledge promising no new taxes by the Wyoming Liberty Group as creating a chill over the Legislature.
“That sort of binds your hands when you come into the Legislature, having promised not to impose news taxes when we’re in a fiscal crisis,” he said. “The only alternative is to cut. We’re cutting schools, we’re cutting programs that help people in Wyoming. Obviously cigarette taxes wouldn’t have solved all that. We can’t just rely on the mineral industry to carry us through.”
The Wyoming Taxpayers Association, which represents some of the state’s largest industries and taxpayers, opposed HB151 too. Executive Director Buck McVeigh said it was a regressive tax, disproportionately affecting lower-income Wyomingites.
And with the overall smoking rate on the decline, he said it wouldn’t have made a meaningful difference in the revenue picture.
“For them to tie cigarette excise taxes to budgeting is problematic in itself and couldn’t (stem) the budget shortfall,” he said.