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11/19/2018 6:55:00 PM
Indiana groups want raise in cigarette taxes

Scott L. Miley, Tribune-Star CNHI Statehouse Bureau

When Merchandise Warehouse opened a refrigerated storage facility at Pendleton in May, officials found a factor common with their other central Indiana location: about 42 percent of the workers smoke tobacco. 

“Nationally, it’s 17 percent. Indiana is at 21. We’re more than double. That’s pretty alarming,” said Tim Siddiq, president and CEO of Merchandise Warehouse.

The company initiated a three-part wellness program: smoking cessation, employee involvement and personal responsibility. Employees also receive a stipend to offset the rising cost of healthcare.

On Thursday, Siddiq joined in the latest wave urging the Indiana General Assembly to increase cigarette taxes by $2 a pack and raise the legal age to purchase tobacco from 18 to 21.

The effort to reduce smoking, now known as the 130-member Raise It for Health Coalition, has been pushed by the Indiana Chamber of Commerce in previous legislative sessions.

In Indiana, smoking-related diseases cost more than $7 billion in healthcare expenses, productivity losses and premature deaths, said Kevin Brinegar, CEO of the Indiana Chamber of Commerce.

“Unless you’re in the business of selling tobacco-related products, tobacco products in Indiana are bad for business,” Brinegar said.

A $2-a-pack tax increase could yield $350 million that could be used to invest in the workforce and reduce tobacco use, especially those under the age of 18, coalition officials said.

Opponents of the plan include tobacco manufacturers and shop owners who sell non-combustible vapor products and e-liquids who are trying to differentiate their sales from combustible tobacco products. Also, some legislators see the tax as a generally reliable source of revenue.

While previous legislative sessions have seen similar efforts to increase taxes and lower the age to buy tobacco, this year there has been more momentum, Brinegar said. This summer, the anti-smoking campaign included a 17-stop Alliance for a Healthier Indiana town hall tour that led to 17 mayors issuing proclamations.

There will also be a push to show legislators the costs of smoking for Hoosiers.

“Eleven thousand Hoosiers die every year from smoking,” said Bryan Mills, CEO of Community Health Network. “And almost every health issue in the state can be linked back to smoking.”

The cigarette tax generates $418 million a year for the state. More than half goes to the state general fund, and more than a fourth goes to the Healthy Indiana Plan Trust Fund.

As of Oct. 1, the average state cigarette tax in the U.S. was $1.78 per pack, according to the Campaign for Tobacco-Free Kids. Rates vary from 17 cents in Missouri to $4.50 in Washington, D.C.

Indiana is 38th highest, according to the campaign. Currently, every pack of 20 cigarettes is subject to a 99.5-cent excise tax in the state.

Indiana also charges sales tax of 36 cents a pack. On average, a pack costs $5.66, according to salestax

Federal taxes amount to $1.01 a pack.

Last session, retiring State Rep. Charlie Brown, D-Gary, introduced a bill that would have increased the cigarette sales tax by $2 and raised the age to purchase tobacco from 18 to 21.

On the day the bill was first heard by the House Public Health Committee, Rep. Cindy Kirchhofer, R-Beech Grove, introduced an amendment that removed the tax language. She said taxes should be discussed in a budget session, held every two years.

A discouraged Brown said, “I feel that once and for all as I leave these hallowed halls I’d like to see us say Indiana is coming into the modern age. This would be one to do that where we say we would raise the tax because we want to save lives.” The committee approved the amended bill in a 9-0 vote. The next day, Republican House Speaker Brian Bosma, R-Indianapolis, used a procedural maneuver to kill the bill in caucus. Republicans said the state would lose $14 million in cigarette tax revenue by enacting theage measure. 

Related Stories:
• Coalition seeking $2 per pack cigarette tax hike to reduce Indiana smoking rates
• COMMENTARY: Healthy kids are key to Indiana's future
• EDITORIAL: Cigarette-tax hike is an easy call

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