January 7, 2011 in City

Idaho cigarette tax hike proposed

Lawmaker sponsoring measure backed by health care groups
Jessie L. Bonner Associated Press
 
At a glance

If Idaho boosted its tax by $1.25, the price of cigarettes would jump to about $7 a pack.

BOISE – State lawmakers are expected to consider a bill during the upcoming session that would significantly boost the price of cigarettes in Idaho.

Rep. Dennis Lake, the Republican who heads the House Revenue and Taxation Committee, said Thursday he has agreed to sponsor a measure supported by health groups to increase the cigarette tax by $1.25 per pack.

Lake detailed the proposal at a legislative preview sponsored by the Associated Press.

Any proposals to hike taxes will face a tough fight in the 2011 session with the conservative turn of the Idaho Legislature during the November election. But Lake hopes his bill to increase Idaho’s 57-cent-per-pack cigarette tax will find favor because of the savings it could bring in health care-related costs.

“We know that all legislators have just come from spending some face-to-face time with their constituents and you heard legislative leadership say no new taxes,” Lake told reporters. “Does that mean this is a tax? I refer to it as a user fee … so, we’ll cross that bridge.”

Nearly $320 million is spent every year in Idaho on health care costs related to tobacco use, and the cost to Idaho Medicaid, the health insurance program for the poor and disabled, is $83 million, said Heidi Low, the Idaho director of government relations for the American Cancer Society’s Cancer Action Network.

“That translates to $539 for every taxpaying household here in Idaho that’s going toward the federal and state tax burden because of tobacco use,” Low said.

More than a dozen states have raised their taxes on cigarettes over two years for health reasons and to increase revenue during the economic downturn. Washington state boosted its tax by $1 to just over $3, pushing cigarettes there to about $8 a pack, while Utah increased its tax to $1.70.

If Idaho boosted its tax by $1.25, the price of cigarettes would jump to about $7 a pack.

Critics contend the tax increases hurt retailers and could push consumers to buy cigarettes illegally.

But supporters of the Idaho proposal estimate it would bring in more than $51 million in new money, which could become an incentive for lawmakers facing an estimated $340 million shortfall for the next fiscal year.

The coalition of health groups backing the cigarette tax hike want to use the potential new revenue to pay for smoking cessation programs and Medicaid. The health insurance program for the disabled and poor could also get a bump in funding from Idaho health care providers.

This already happened during the 2010 session, after a group of private hospitals agreed to kick in $25 million each of the next two years to offset cuts in the state Medicaid budget, fending off even deeper reductions in the federal matching money used to reimburse hospitals.

Lawmakers passed a bill that allowed the state to assess the 20 private hospitals, most of them nonprofits.

“I think you’ll see round two of that, and maybe round three or round four,” said Sen. Dean Cameron, who co-chairs the Joint Finance-Appropriations Committee.

© Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Get stories like this in a free daily email


Please keep it civil. Don't post comments that are obscene, defamatory, threatening, off-topic, an infringement of copyright or an invasion of privacy. Read our forum standards and community guidelines.

You must be logged in to post comments. Please log in here or click the comment box below for options.

comments powered by Disqus