Sin tax may offer salvation

7/9/2001

People who buy cigarettes and alcohol could be asked to shell out a bit more in taxes to support those who have become addicted to their vices.

But that's only if the Federation of Ohio Alcohol & Drug Addiction Services Boards can convince Columbus lawmakers to allow counties to pursue those so-called “sin taxes,” and then only if the voters in those counties approve. It's a long shot, but those in the business of providing drug and alcohol intervention services say they're in such desperate financial straits, they're willing to give it a try.

“We've been underfunded all along,” said Jay Salvage, executive director of the Alcohol & Drug Addiction Services of Lucas County and chairman of the Federation of Ohio ADAS Boards. “Now we're facing the state budget cuts too.”

The alcohol and drug addiction agencies in Ohio's larger counties, and their counterparts in smaller counties, are primarily dependant on the money they receive from the state and federal governments.

Only with limited exceptions do some of the state's addiction services boards receive money elsewhere, Mr. Salvage said.

At its monthly meeting in Columbus today, the Federation of ADAS Boards will discuss legislation it has drafted to allow counties to ask for alcohol and cigarette taxes as a funding source for addiction services, Mr. Salvage said.

Alcohol and drug addiction services officials around the state periodically have toyed with the idea of pursuing sin taxes as a funding source. In 1995, Lucas County's addiction services board helped fund a poll that asked 872 Ohio registered voters, among other things, if they'd support a proposal that would give counties the option of taxing alcohol or tobacco products to fund alcohol and drug addiction services.

Pollsters said 75 percent of voters supported taxing alcohol and 66 percent supported taxing tobacco to finance such services.

But when alcohol and drug addiction services officials have floated the idea at the state house, “We've always been told: `This isn't a good time. We're busy with school funding. We're busy with the budget,'” Mr. Salvage said.

Now, he said, a funding squeeze in Columbus - juxtaposed against an swelling need for addiction services - has forced local boards to look elsewhere for money. At least three times, local boards, including Lucas County's, have gone to their voters for property taxes. Three times, they've been turned down.

“It's a perception issue,” said Stacey Frohnapfel, spokeswoman at the Ohio Department of Alcohol and Drug Addiction Services. “Mental health is seen and accepted as a health issue, but addiction to a lot of people is still seen as a behavioral issue.”

Denied a property tax levy last year, the Lucas County addiction services board again plans to ask for property tax funding in November, requesting a 0.5-mill levy.

Should the sin tax option be approved in Columbus - and that could take a year or more - the local property tax might be abandoned, Mr. Salvage said.

But allowing counties to go after such taxes puts them in a precarious position, said Suzanne Alexander, a policy analyst with the County Commissioners' Association of Ohio. She said counties need to be flexible in raising taxes, but they don't want to carry too much of the funding burden that should otherwise come from Columbus. “It's a constant struggle to keep that balance,” she said.

Local lawmakers are lukewarm to the idea of a local sin tax, with many saying it would be unfair to those who light up or who tip a cool one now and then.

In Ohio, residents pay 24 cents in sales tax per 20-pack of cigarettes; other tobacco users pay 17 percent above wholesale cost in sales tax for items such as cigars, snuff, and chewing tobacco.

Beer consumers pay about 1.68 cents for a 12-ounce can of beer; and what comes out to be about $1.20 for a gallon of mixed drinks and 32 cents to $1 for a gallon of wine, depending on its alcohol content.

Other alcohol is taxed at varying degrees, according to the Ohio Department of Taxation.

It quickly adds up.

In 2000, those taxes poured more than $371 million into the state's general fund.

“If we have to tax, it should be shared by everyone,” said State Rep. John Willamowski (R., Lima), who said he opposes sin taxes. “The larger the pool, the smaller the burden.”

And there's another problem with tobacco and alcohol taxes: “There's a problem with the dependability of the revenue stream,” said State Rep. Jeanine Perry (D., Toledo.)

She and others note that the state is trying to curb its residents' appetite for tobacco, so those taxes may dwindle over time.

State Sen. Linda Furney (D., Toledo) agreed that other funding options for addiction services boards should be explored first.

“I would be much more interested in having people look at the existing [tax] profits and where they go,” she said. “Maybe it's time for some discussion on that.”

Still others said they're not opposed to the idea of giving local communities the option of asking for such taxes.

“If my choice is to levy [a tobacco or alcohol tax] in Columbus and then divide it up by some sort of formula, or to let counties assess their own needs and then ask for the money, then my choice is definitely the latter,” said Stephen Buehrer (R, Delta).

“At least local citizens would be making decisions on their own needs,” he said.