SALEM – Despite the governor’s opposition to raising cigarette taxes, health-care and anti-smoking groups are still hoping to reinstate 10 cents of that tax.
That portion of Oregon’s cigarette tax, which had been $1.28 a pack, was part of an array of revenue raisers that the Legislature approved, Gov. Ted Kulongoski signed, but voters defeated in February as Measure 30.
By itself, supporters say, the cigarette tax element of Measure 30 was the least controversial. And given Oregon voters’ track record of approval for tobacco taxes, they said they expected broad political support for an effort to reinstate that tax when the Legislature meets next month.
“We know that cigarette tax increases are wildly popular in Oregon,” said Tabithia Engle, spokeswoman for the Tobacco-Free Coalition of Oregon, noting that voters in 2002 approved a 60-cent increase in the per-pack tax.
She said Oregon is the only state to lower its cigarette tax in the past decade. Her group supports restoring the tax from $1.18 to $1.28 a pack in part because driving up the cost of cigarettes tends to reduce youth smoking.
In his presentation of a proposed spending plan for 2005-07, Kulongoski said last week that he would oppose any effort by the Legislature to raise taxes. And he named the cigarette tax as an example.
“Whether it’s the corporate minimum or the cigarette tax, I’m not going there,” the Democratic governor said.
Associations representing hospitals, doctors, and medical clinics are forming a coalition to lobby for reinstating the tax, which would raise $28 million. If the Legislature allocates the money to safety-net clinics for uninsured, low-income Oregonians, the money could qualify for roughly $50 million in matching federal dollars, said Ken Rutledge, president of the Oregon Association of Hospitals and Health Systems.
Rutledge said Kulongoski’s stated opposition could be an obstacle, but not formidable enough for his coalition to abandon the proposal before at least testing it out in the Legislature.
“The last thing I want to do is critique the governor,” he said. “But quite frankly, these are dollars that were inadvertently a part of that repeal.”
In the past, the Legislature has routinely voted to keep in place the portion of Oregon’s cigarette tax that must be renewed every few years. Advocates of higher tobacco taxes concede that the political climate is different going into next year’s session. That’s because voters have twice rejected legislative tax increases, in the forms of 2003’s Measure 28 and this year’s Measure 30.
Republican House Speaker Karen Minnis of Wood Village said she and other House Republicans had no intention of considering higher taxes, particularly increases that the voters shot down as part of Measure 30, such as the cigarette tax.
“Those were components that were involved in Measure 30, and they turned that away,” she said. “I think it’s proper that we respond to that and craft a budget within existing resources.”
Russ Walker, the lobbyist who pushed to refer Measure 30 to the ballot and defeat it, said his group was letting lawmakers know they would pay a political price for considering an increase in the cigarette tax.
“The message we’re telling people is, ‘You do this at your own peril,’ especially after the taxpayers told them not once but twice, don’t raise taxes,” said Walker, executive director of the Oregon chapter of FreedomWorks.
Rutledge said he hoped lawmakers and the governor would agree that “politically, it makes sense,” to raise the cigarette tax, in part because the alternative would be to let Oregon’s growing population of uninsured people continue, resulting in treatment at hospital emergency rooms, with those treatment costs ultimately being passed to consumers and businesses through higher insurance rates. “You can either have the direct tax burden in a way we’ve historically had it, or you can do it through the back door, but Oregonians are going to be paying for these people one way or the other,” he said.