Pending West Virginia legislation looks at raising tax on tobacco

BLUEFIELD — Legislation pending in the House and Senate would increase West Virginia’s excise tax on cigarettes by $1 per pack, creating a new revenue source for the Mountain State but also causing potential problems for retailers living in border communities such as Bluefield.

“I just think, and again I relate it as such to the gasoline tax, I think it would just encourage folks who are going to use those products to purchase them certainly where it is less expensive,” Marc Meachum, president and chief executive officer of the Greater Bluefield Chamber of Commerce, said of Senate Bill 362 and House Bill 2973. “I don’t know specifically about tobacco products, but I know a lot of people who purchase gas in Bluefield, Va., or Wytheville if they are traveling.”

tobacco tax increase

Meachum said it is easy for residents of Bluefield to cross the state line to purchase cheaper gas or cigarettes in Bluefield, Va., thus hurting retailers on the West Virginia side.

While some in Princeton also may opt to travel to Bluefield, Va., or Glen Lynn, Va., for cheaper cigarettes, the added tax may also encourage a few more people to kick the bad habit, Robert Farley, president of the Princeton-Mercer County Chamber of Commerce, said.

“I think the health issues would have to be a priority,” Farley said. “And if putting a tax on cigarettes decreased the use of cigarettes, I would think most — even businesses — would be for it.”

If passed by the Legislature, the excise tax would produce $133 million in additional revenue, half of which would go into the state’s general fund. The other half would go into a special fund for health care and health promotion programs specifically giving $27 million for tobacco prevention and cessation activities, which would bring West Virginia up to recommended federal funding levels, according to Donald Reed, director of the Southern Coalfield Tobacco Prevention Network.

“The $27 million is actually what the CDC (Centers for Disease Control) recommends for our state to spend on tobacco prevention and cessation activities,” Reed said. “We presently get $6 million. It’s a huge increase. It is estimated that if this tobacco tax does pass almost 13,000 current residents will quit smoking and almost 19,000 kids will never start. We read these numbers all of the time. A lot of people say is that really true? But I can attest in April 2009 when the federal tax increased, the state quit line, or the calls to the state’s tobacco quit line, went off the roof. It does promote health, it does prevent kids from starting and it does help adults quit.”

Reed said the Senate version of the bill was sponsored by Acting Senate President Jeff Kessler, D-Marshall. Reed said both bills are currently in the House and Senate Health and Human Resources Committee.

“Well of course the tobacco industry and the retail industry are heavily watching this bill,” Reed said. “However, to avoid a huge budget shortfall within three years, I expect this bill to pass.”

source: www.bdtonline.com

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