In Colorado, the Nov. 8 ballot will include a measure to substantially increase the state sales tax on cigarettes.
If passed, Amendment 72 to the Colorado Constitution will add $1.75 in state sales tax to the price of each pack of cigarettes — in addition to the current excise tax of 84 cents per pack — effective Jan. 1, 2017.
The average tax rate for a pack of cigarettes in Colorado is $1.65 (the 14th lowest in the country) and the current federal tax on cigarettes is currently $1.01.
According to research by supporters of the amendment, the proposal would result in an annual tax revenue increase of $315.7 million.
Per the amendment, the excess tax revenue produced would fund health-related programs including Medicaid, children’s health care programs, disease prevention and treatment, as well as cancer research and tobacco cessation and education programs.
As of Oct. 18, supporters of the amendment had raised $2 million, while the opponents of the measure had raised around $17 million. The “Yes on 72” campaign has a variety of donors in health care and education, including University of Colorado Health and University Physicians Inc.
The only donor for the “No on Amendment 72” campaign is Altria Client Services LLC (renamed from Phillip Morris Companies Inc. in 2003), one of the world’s largest tobacco and cigarette corporations.
Altria, the only company or organization to publicly oppose the measure, argues via its “No Blank Checks in the Constitution” campaign that there is little oversight or accountability for how the additional tax revenues will be disbursed.
“Altria Client Services has provided cash and in-kind contributions to the No Blank Checks in the Constitution committee to educate voters about the many problems with Amendment 72,” said Altria spokesperson David Sutton. “The opposition coalition has serious concerns that this measure will place a $315 million-per-year blank check in the Colorado Constitution with little accountability to taxpayers. The opposition committee is conducting a vigorous campaign to educate voters on the facts about the constitutional amendment and why it deserves their “no” vote.”
Colorado Gov. John Hickenlooper is a supporter of the amendment. Like many of the organizations supporting the tax, he believes it’s all about prevention.
“Just in Colorado, this tax increase may help save the lives of more than 20,000 people and stop more than 30,000 young people from starting to smoke,” he said.
More than 100 Colorado companies and organizations currently support the amendment, including Centura Health, Children’s Hospital Colorado, Delta Dental of Colorado, Peak Vista Community Health Centers, the American Heart Association and several local veterans groups.
“The American Heart Association is aligning itself with Amendment 72 because we want to protect lives and we want to increase the quality of life here in Colorado,” said Robert Wright, board chairman of the American Heart Association in Colorado Springs. “It lines up directly with our goal to reduce cardiovascular disease and death, while promoting health and life.
“Higher priced cigarettes means younger kids will delay starting smoking — or not start at all. It means some people will stop smoking altogether, and it means that more money will go to support those smokers who suffer from illness. There’s a huge benefit to the local community of Colorado Springs, not just to the State of Colorado.”
Historically, Colorado voters have voted on two tobacco-related ballot measures, including one in 1994 that would have raised the tobacco tax by 2.5 cents per cigarette but was voted down, and another in 2004 that successfully increased tax on packs of cigarettes from 20 to 84 cents per pack (and other tobacco products from 20 to 40 percent of manufacturer’s list price).
ARGUMENTS IN FAVOR
“Raising the cigarette tax is the most effective way to reduce smoking and to stop tobacco companies from getting more children and adults addicted to cigarettes for the rest of their lives. Smoking is the No. 1 cause of preventable death in Colorado, killing more than 5,000 Coloradans a year. Colorado’s current tax (38th in the nation) is too small and we have fallen behind most states in efforts to stop smoking. In 2015, Colorado saw the first increase in cigarette sales in over a decade. We still have more than 650,000 adults and nearly 24,000 high school students who smoke and Colorado kids smoke 7.1 million packs of cigarettes a year. Increasing the cigarette tax will keep kids from starting this deadly habit and raise money for medical research, tobacco cessation programs and support for Coloradans most affected by smoking.” (Source: Yes on 72)
“Amendment 72 is a $315.7 million tax increase. The measure creates a constitutional requirement that revenue from the new taxes be spent on specific programs, even if these programs are ineffective at reducing the cost of tobacco use. Unless voters approve another constitutional change, the spending priorities in the measure will receive taxpayer funding indefinitely. As tobacco use declines, Amendment 72 will lock in state spending on unnecessary programs even when new needs are identified in the state budget. … Tripling the tax on cigarettes impacts low-income tobacco users the most. Recent studies have shown that people with lower incomes are more likely to use tobacco products and less able to afford a tax increase. Nationally, more than a quarter of people in poverty smoke cigarettes, and tobacco users with low incomes spend about 14 percent of their household income on tobacco products. Because these products are addictive, tobacco users may continue using tobacco even after taxes are increased. Low-income tobacco users who are unable to quit will subsidize programs that benefit non-tobacco users, taking money out of already tight household budgets.” (Source: No on Amendment 72)