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Wyoming Looking at Increasing Tobacco Taxes

BUFFALO, Wyo. — A legislative panel in Wyoming has recommended a tobacco tax increase to curb the state smoking rate, although it did not weigh in on what that rate should be, reported The Casper Star Tribune.

Members of the Joint Labor, Health & 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 the 1998 Master Settlement Agreement (MSA).

The account is projected to have a $14.6 million shortfall by 2018, the report said.

Wyoming’s 60-cent a pack cigarette tax falls well below the national average of $1.58. The state’s smoking rate of 20.6% is higher than the national average of 17.8%.

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, he said.

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 four 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 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, said the report.

Committee co-chairwoman State Representative Elaine Harvey (R) wants to raise the tax to cover the entire MSA 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 State Senator Ray Peterson (R) 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) 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.


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