Dollar-a-pack cigarette tax appears doable in 2018

WYOMING – State lawmakers tasked with juggling numbers this upcoming budget session and, while few dyed-in-the-wool Republicans in Cheyenne are ever ready to talk about taxes, one place to start might be with a so-called “sin tax” on cigarettes or alcohol.

When budget cuts have been fully explored and government programs slashed to the bone, revenue-raising ideas are targeted next. It’s unlikely legislators will ever serious entertain a state income tax, raising property taxes, or even something a little more selective like a real estate transfer fee to be proposed by Rep. Andy Schwartz (D-Jackson).

Vice taxes like those targeting sales of cigs and swigs could find easier traction this session, especially in light of a recent University of Wyoming survey suggesting a majority of state residents would be willing to pay higher taxes (63%). Regarding specific taxes they would accept, 81 of respondents said they would favor raising beer or alcohol taxes and 78 percent favored raising taxes on cigarettes.

Of the two, a cigarette tax might be more doable, according to history. Tax on a pack of cigarettes was raised from 12 cents to 60 cents per pack in 2003. A measure to further hike that tax to 90 cents narrowly failed last February. At present, Wyoming still has one of the lowest cigarette taxes in the nation.

A beer tax could be a little tougher. Despite numerous efforts over the years, that hasn’t been raised since it was set at two cents a gallon in 1935.

Nationwide cigarette sales tax map. (University of Wyoming)

The Legislature’s revenue committee is currently considering a jump to a dollar-a-pack tax on cigarettes. That would put tax on a pack of butts closer to the national average and raise an estimated $26 million.

A $1 tax appears to be the sweet spot for legislators. At $10 a carton, the jump is seen as both a decent revenue raiser and a barrier to entry for teen smokers considering picking up the habit. It may even cause more than a few adults to quit.

Impact of the 2003 Cigarette Excise Tax Increase on Consumption and Revenue in the State of Wyoming.

Some lawmakers, including Sen. Affie Ellis, R-Cheyenne, are concerned with how a tax might adversely affect Eastern Shoshone and Northern Arapaho tribes, or how it may target reservations as the “black market” place to go for cheaper smokes. It is illegal, however for a non-tribal member to purchase cigarettes on the reservation.

The strongest opposition to a tax increase on cigarettes is expected to come from the tobacco industry and its lobbyists. On the other side of the fence are organizations like Better Wyoming.

Amid several compelling arguments, Better Wyoming zeroes in on a tax’s ability to decrease state healthcare costs and curb and teen smoking.

“Wyoming has a high school smoking problem,” Better Wyoming points out. And it’s already expensive to all taxpayers. Wyoming spends roughly $258 million a year on healthcare directly related to smoking. Wyoming smokes more than the rest of the country and its minors even more so. Nationwide, just 10.8 percent of high school students smoke. In Wyoming, nearly 16 percent of our high school students smoke, according to Better Wyoming.

With a $250 million budget shortfall to close, lawmakers can’t afford to leave any tax off the table, especially one that appears to be palatable to most Wyomingites…even many smokers.

 

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