With tobacco use on the rise, a state lawmaker and the American Cancer Society want to ask voters to sharply increase the taxes paid by smokers on the cigarettes and similar products they buy.
And the money raised would help put Arizonans through college.
Current law puts a $2-a-pack tax on cigarettes. SCR 1026 would add another $1.50 on top of that.
The proposal by Sen. Heather Carter, R-Cave Creek, if approved by voters, also would hike similar existing taxes on cigars, chewing tobacco and similar products. And it would, for the first time ever, impose a levy on vaping products, both the device and the refills, equal to 73 percent of the wholesale price.
Brian Hummell, lobbyist for the Cancer Society, acknowledged that putting the issue on the 2020 ballot effectively gives the power to the approximately 85 percent of Arizonans who do not smoke and who would not be affected financially. But he said the move makes sense from a public health perspective.
Hummell said higher taxes, especially when combined with anti-tobacco and cessation programs, are the most effective at both getting existing smokers to quit as well as keeping people, particularly teens, from starting in the first place.
It was the last voter-approved tax increase a dozen years ago that brought the levy to $2 a pack. And Hummell said that worked – at least for awhile.
“We were at 14 percent,’’ he said of the number of adults who smoked, a figure he said remained flat for years. “Now we’re at 15.7 percent over the last two years.’’
Hummell acknowledged that increase in admitted tobacco use may not be specifically due to people deciding to buy a pack of cigarettes, saying it also may include adults who use vaping products.
But whatever the method of using tobacco, Hummell said, the goal remains the same: reduce the use. And that goes to the question of price.
He contends that a $1.50-a-pack increase will prevent nearly 27,000 teens who turn 18 from starting to smoke in the first place. And that doesn’t count teens who, faced with a price hike, will give up the habit.
“So we’re basically pricing these people out of the market,’’ Hummell said.
He said Arizona’s $2 tax rate already is higher than all but 15 other states. Hummell figures the increase to $3.50, if approved, would put Arizona somewhere in the Top 10.
That, however, deals with just half of the issue. Then there’s the question of taxing tobacco smokers to make college more affordable.
Carter essentially said it’s a marriage of convenience.
She said that, at one time, the Arizona Board of Regents gave out scholarships to any student who graduated in the top quarter of his or her class. That was later curbed to the top 10 percent.
Then, when the state started to use the AIMS test as a graduation requirement, students whose scores were at or near the top were given partial scholarships. The test, Arizona’s Instrument to Measure Standards, is no longer linked to graduation, and Carter said those funds, too, have dried up.
Put simply, Carter said she was looking for a dedicated source of dollars to devote to scholarships at the state’s three universities. And this levy would raise an extra $85 million a year.
“What I’m trying to do is put two ideas that have merit together,’’ she said. “When you put something to the ballot, such as funding student scholarships, there needs to be a funding source.’’
And Carter said that as the former chair of the House Health Committee, she was aware of prior public votes to boost tobacco taxes and earmark the funds for various needs, ranging from the Department of Corrections to the Arizona Health Care Cost Containment System, which is the state’s Medicaid program.
“So I thought we could solve two problems with one resolution,’’ she said.
As crafted, her measure would earmark the cash for the Board of Regents to award a scholarship to Arizona residents who have obtained grades of A or B in each academic course required for graduation.
Carter conceded that still leaves the question of whether it is fair to tax smokers – and only smokers – to help put students through college as opposed to a broader tax.
She said if that’s the desire of colleagues, she’s OK with that. In fact, Carter has separately introduced SB 1523 which actually would require the state to use existing tax revenues, rather than a higher tobacco tax, to fund the same scholarships for the top students.
Hummell, for his part, said he and his organization have no qualms about taxing tobacco smokers to make college more affordable. Like Carter, he cited the fact that the revenues from the existing $2-a-pack levy also go to fund other priorities in state government.
He also said that there are costs that smokers and their health risks put on the general public.