Ohio Gov. Kasich’s tobacco tax plan praised, scorned

Organizations speak out

3/14/2014

COLUMBUS — Reaction to Gov. John Kasich’s plan to increase the tax on cigarettes and other tobacco products has divided even those who generally like the idea.

A coalition of hospitals and doctors on Thursday held a news conference to praise the plan, predicting the price hike would prompt many current smokers to quit and prevent potential future smokers from starting.

But other anti-tobacco organizations, such as the American Cancer Society and American Lung Association, argue that the increase doesn’t go far enough and won’t have the effect on smoking rates that advocates predict.

Meanwhile, tobacco manufacturer Altria Inc., parent of Philip Morris USA, sought out reporters to fight the plan, and tobacco product sellers decried its impact on their bottom lines — particularly in border counties where smokers could drive into Kentucky, West Virginia, and Indiana, where taxes would be significantly lower.

Micah Berman, assistant professor at Ohio State University’s College of Public Health and Moritz College of Law, said the coalition of hospitals, doctors, and community action agencies that held the news conference Thursday believes the higher tax will benefit the health of Ohioans.

“You can see that in other states that have adopted similar-sized increases,” he said. “Nationally, when there was a 60-cent increase adopted in 2009, it had a demonstrable impact on smoking rates, in particular on youth smoking rates.”

The state expects to raise about $848 million more a year by raising and expanding Ohio’s cigarette tax to $1.85 a pack — an increase of 30 cents per year for two years. It would give Ohio the second-highest rate in the region behind only Michigan’s $2-a-pack tax.

This, along with $742 million more proposed in a business gross receipts tax and $874 million from higher taxes on oil and natural gas drilling, would help to pay for most of the $2.6 billion worth of income tax cuts Mr. Kasich proposed.

The cigarette tax would be extended to other products like cigars, electronic cigarettes, chewing tobacco, and pipe tobacco that are currently subject to lesser tax rates. Ecigarettes are now subject only to the sales tax.

“In our view, Ohio and all states should refrain on taxing new nicotine-containing products altogether until we have a better understanding of where consumers will land with this emerging new category and allow regulators, particularly the [Federal Food and Drug Administration], to assess the proper scope of regulation for these products,” said Altria spokesman David Sutton.

Altria joined the criticism from wholesalers and retailers that the tax will disproportionately affect lower-income Ohioans who are statistically more likely to smoke in order to help pay for an income tax cut for all Ohioans.

“This increase puts Ohio retailers and the entire state at a competitive disadvantage,” said Nate Filler, a member of the Ohio Council for Reasonable Business Policy and president of the Ohio Grocers Association.

“We already operate on razor-thin margins, and we are fighting to survive, dealing with an uncertain economy, rising health-care costs, and other mandates.”

Beyond the tax issues, Mr. Kasich’s proposals renew the state’s effort to provide help for current smokers to quit and prevent others from taking up the habit.

Mr. Kasich proposes using about $27 million recently released from settlement arbitration with cigarette manufacturers to restart the flow on such programs that had been all but turned off in recent years.

Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.