Supporters, including Rep. Mitch Greenlick, D-Portland, a former health researcher, said the proposed increases are less about raising more money for the state than getting people to quit the habit, or not start. R.J. Reynolds lobbyist Mark Nelson and the head of Plaid Pantry attacked the idea as hurting poor people and small grocers.
Lawmakers took no action at a committee hearing on the proposals. But the exchange flagged what could be an ongoing struggle at the Legislature over health, money and power.
“Tobacco is the most addictive product we deal with,” said Greenlick, sponsor of a bill to raise the $1.18 state tax on a pack of cigarettes by about a dollar. “It’s more addictive than heroin.”
Raising the price can cause people to quit or to think twice before starting, especially young people, Greenlick told members of the House Revenue Committee. A second, similar bill would raise the state tax on a pack of 20 cigarettes by $2.
Nelson, who was instrumental in killing a 2007 ballot measure to raise tobacco taxes, said the higher taxes would unfairly target a small segment of Oregonians who can least afford to pay it.
“More than half of smokers in Oregon make less than $35,000 a year,” Nelson said, citing tobacco industry profiles. “This tax is regressive and aimed at the poorest Oregonians in the state.”
Joining him in opposing the proposed tax increases was Chris Girard, president of Plaid Pantry, an Oregon-based chain of convenience stores. Raising the taxes would hurt sales, he said.
One out of three Plaid Pantry customers buys a tobacco product, Girard said. Profits from the sales help pay wages and health benefits for 750 employees, in addition to supporting store suppliers, and paying property taxes and income taxes.
“Now is not the time to raise taxes on anything,” he said. “It’s an especially bad time to raise them on such a small group of Oregonians” already hurting from the affects of the recession.
The comments prompted some pointed questions by Democrats on the Revenue Committee.
Rep. Sarah Gelser, D-Corvallis, noted that the cost of a pack of cigarettes is nearly as much as a quart of milk and a carton of eggs. She then asked Nelson what his client is doing to reduce the “pervasive” advertising to low-income people if they bear the brunt of the taxes.
“You assume I agree with your statement that there is pervasive advertising in low income neighborhoods, which I don’t,” Nelson shot back. Tobacco companies don’t pay the taxes, and they don’t make money off them, he said.
“The state of Oregon is the one truly profiting from the sale of a pack of cigarettes,” he said.
Gelser didn’t let up. She asked Nelson if marketing isn’t the reason, then why are so many smokers low income.
“I don’t know,” Nelson said. “That’s the demographic in Oregon as it is in other states.”
Earlier, Gelser had made her position clear.
“Anything we can do to eliminate smoking altogether is a good thing,” she said. “Tobacco is the only product when used exactly as directed will kill you.”
Other Western states have begun raising their tobacco taxes, while Oregon has the distinction as the only one to see its cigarette taxes decline, said Brett Hamilton, executive director of Tobacco Free Coalition of Oregon. He provided rough estimates that the increases could raise between $250 million and $358 million for the 2011-13 state budget. Official revenue estimates have not been compiled.
The revenue committee also heard testimony on a related bill that would allow counties to set their own separate tobacco tax. Oregon law prevents counties and cities from raising money through cigarette taxes.
Multnomah County Commissioner Deborah Kafoury said counties are hurting financially and could use the additional revenue from a cigarette tax.
Rep. Vicki Berger, R-Salem, who co-chairs the revenue committee, said she expects to take more testimony on the bills, but isn’t sure what will happen to them next.
“I’m not feeling terribly cozy about them,” Berger said. “But I think it’s a conversation we need to have.”
By Harry Esteve, The Oregonian The Oregonian