Groups seek to reinstate cigarette tax that voters rejected

SALEM, Ore. – Health care industry and anti-smoking groups plan to seek reinstatement of a 10-cent-a-pack cigarette tax that was snuffed out when voters rejected an $800 million tax hike earlier this year.

The groups say raising the cigarette tax would discourage smoking among young people by making cigarettes more expensive and provide more money for health clinics for low-income people.

But the move is likely to encounter strong resistance from House Republicans who say Oregonians have made it clear they don’t want higher taxes.

The 10-cent cigarette tax was enacted by the 1993 Legislature to help pay for the Oregon Health Plan, and lawmakers had renewed the increase every two years since then with little controversy.

However, the cigarette tax died because lawmakers included it in their $800 million tax hike plan – most of which would have come from an income tax surcharge – that was trounced by voters in February.

The result of the February vote was that Oregon’s cigarette tax dropped from $1.28 a pack to $1.18 per package.

With the 2005 Legislature set to begin on Jan. 10, the groups seeking reinstatement of the 10-cent tax say they are prepared to make the case that voters didn’t really mean to kill the tax.

“The 10-cent tax was mistakenly taken away by voters,” said Tabithia Engle of the Tobacco-Free Coalition of Oregon.

Ken Rutledge, president of the Oregon Association of Hospitals and Health Systems, said reinstating the cigarette tax would generate $28 million in the next two-year budget cycle.

That money could be used to help pay for health clinics throughout the state to serve the growing number of Oregonians who lack health insurance, Rutledge said.

Besides, he said, “this is not a new tax. It would replace a tax that was inadvertently repealed.”

House Speaker Karen Minnis and other House Republicans have a different view and say they have no intention of considering tax hikes in the 2005 session.

“The people have spoken very clearly that they are not interested in higher taxes,” said Chuck Deister, spokesman for Minnis. “The House is done with taxes.”

The group that led the effort to force the February referendum on the Legislature’s $800 million tax package also said that lawmakers who vote to reinstate the 10-cent tax are voting for a tax increase.

“They do that at great risk to their own political futures,” said Russ Walker of Citizens for a Sound Economy. “We will remind their constituents in the next election that their representative loves to raise taxes.”

Still, Rutledge and Engle said they believe they might be able to win approval of the 10-cent tax because separate cigarette tax increases have always found favor with Oregon voters.

“We believe there continues to be really strong support for higher cigarette taxes in Oregon,” Engle said.