Rollback Of Tobacco Taxes Urged Gop, Meanwhile, Seeks Cut In Beer Taxes

Senate Democrats are leading the charge to roll back tobacco taxes by five cents and cancel a one-cent increase scheduled to take effect in July.

Meanwhile, House Republicans are pushing a cut in beer taxes, which are scheduled to increase to triple the rate of Oregon’s tax and double Idaho’s by July 1, 1997.

Sen. Valoria Loveland, D-Pasco, chairman of the Senate Democratic Caucus, said the tobacco tax rollback is a matter of fairness.

The tax was increased in 1993 to pay for expansion of the Washington Basic Health Plan, a state-subsidized medical insurance program.

Money raised by the tax is dumped into the Health Services Account, and has been used for purposes other than just the Basic Health Plan, Loveland said.

Plans are afoot this session to use $5 million of the account to build a trauma center. There’s also talk of using it to backfill expected cuts in the federal Medicaid insurance program. The health services account also pays for public health programs.

“It seems like every time we want to do something health-related, that’s where we go,” Loveland said. “That’s not what this money is supposed to be for.”

As of Jan. 1, 88,612 subscribers have signed up for coverage under the health plan, according to the state Health Care Authority. But there is enough money raised by the taxes to pay for 200,000 enrollees by 1997.

Rather than collect all the taxes authorized in 1993 to support that many slots and have them go begging, Loveland thinks the tax should be reduced.

Her bill would roll back five cents worth of the tax if enrollment in the plan remains at 170,000 or fewer for three months at a time. If enrollment goes above that level for more than three months, the tax would go back up.

The one-penny increase would be permanently canceled.

Store owners are clamoring for the tax cut. Washington’s tobacco tax is the highest in the country, at 81.5 cents a pack, which sends customers across the border to buy their smokes.

“People aren’t buying less. They are just buying them somewhere else,” Loveland said.

A carton of Marlboro cigarettes goes for $24.29 at a 7-Eleven on Pines Road in the Spokane Valley. Smokers can take a 15-minute drive to Post Falls and buy the same carton for $17.20.

Meanwhile, the tax on a six-pack of beer is scheduled to go up from 13 cents to 17 cents July 1, 1997. Beer wholesalers say that’s too high.

The tax is 5 cents per six-pack in Oregon; 9 cents in Idaho.

“Our beer tax is putting distributors out of business,” said Rep. John Pennington, R-Carrolls, near the Oregon border.

A variety of beer-tax reduction bills are in circulation in both houses. “I couldn’t really say what will happen with it this session,” said Rep. Brian Thomas, R-Renton, chairman of the House Finance Committee.

Sen. John Moyer, R-Spokane, said sin taxes shouldn’t be rolled back. If anything, demand for the Basic Health Plan is only going to increase, Moyer predicted.

Moyer, a physician, crusaded for the tax increases in 1993, particularly on tobacco, which he says costs taxpayers money because it makes people sick.

“I can think of no good reason why these taxes should be reduced. What are we supposed to do? Raise the business and occupation tax? Put more people on Medicaid?

“We’ve got a good system now and we should not be taking money away from the health services account,” he said.

Anti-tobacco activists argue when tobacco prices drop, more kids start smoking. They say taxes should remain where they are if only for health reasons.

, DataTimes