Every year of my legislative career I have brought forward bills that relate to our health care system. The bills have ranged from attempting to change our primary care system to the dispensing of medications in nursing homes to improving the process of sharing medical information across the state. However, the bill that has drawn the most attention has been my bill of several years ago that attempted to raise the tax on cigarettes and tobacco products. I have introduced a similar bill this year.
The first time I addressed the cigarette and tobacco products tax issue, the state was at the height of our nationwide financial crisis and Nebraska was looking at an historical budget shortfall. The revenue raised, if that bill had passed, would have gone a long way toward addressing our state’s budgetary needs. However, I did not suggest raising the tax as simply a way to raise revenue for the State. I brought the bill forward then, and now, in an effort to recover from smokers some of the millions of taxpayer dollars in health care expenditures directly related to the effects of this addictive product.
There is an even more important reason to raise the tobacco tax. This tax is one of the few taxes that a person can choose not to pay. If you don’t want to pay the tax, don’t use tobacco products. That, of course, is the point. The increased price will reduce the number of tobacco users and, over time, reduce the expense to Nebraska’s taxpayers. Although much attention has been drawn to the revenue generated by a tobacco tax increase, the far more significant dollars that tax payers should be concerned about are the hundreds of millions in long term future savings to be realized through the corresponding reduction in Nebraskans suffering from smoking related illness.
The greatest savings, and decrease in smokers, would be in the youth of our state. Price increases in tobacco products in other states across our nation have resulted in documented decreases of 20 percent in the category of young smokers.
With all these facts and realities in mind I have re-introduced a bill, LB 439, to raise the cigarette tax 72 cents to a total of $1.36 per pack. This is equal to the current tax in Iowa. This year, rather than using the added tax revenue for general use in our budget I am targeting specific health needs across the State. The estimated $ 66.6 million a year in additional revenue from cigarette tax is designated to go to:
$ 28.0 M Health Care and Human Service Provider Rate Stabilization Fund
$ 5.0 M Tobacco Prevention and Control Cash Fund
$ 23.5 M Health Care Cash Fund
$ 5.0 M Emergency Responder tax credit
$ 2.8 M Cancer Research Funds
$ 2.3 M General Fund
I will talk about the specifics of these programs in a future column.
Another $1.1 M would be raised by the increase in tobacco products and go into the Tobacco Administration Cash Fund. Any excess revenue from this fund, after paying for administration costs, can be returned to the General Fund by the Legislature.
The legislation passed two years ago that resulted in a smoke free Nebraska was a hard fought battle but has proven to be overwhelmingly popular. That support for being smoke free is felt to be one of the reasons the American Cancer Society’s recent survey found that 73 percent of Nebraskans are in favor of a tobacco tax increase. It might surprise you to learn that almost 50 percent of the smokers interviewed in that survey are also in support of the increase. Why? As a member of the media who smokes told me during an interview, “I want to stop but need an incentive. This will do it for me.”
Getting passage of this bill will be extremely difficult. The tobacco lobby is one of the strongest and best financed in the nation. Just getting the bill advanced from Committee for debate will be a challenge.
My motivation for this bill comes from a lifetime of working around patients suffering the effects of tobacco use. From a public health stand point, I feel there is no other health issue as devastating to the health of Nebraskans as the direct and indirect effects of tobacco use. An increased price will be the motivation for some tobacco users to kick the habit. I recognize that a majority of tobacco users will continue to use the product but the increase in tax revenue will help offset the subsidization of this habit by the 80 percent of Nebraskans who are not consumers of tobacco products.
I came to the legislative body hoping that my experience and knowledge in health care could be put to use in ways that make a positive difference. Reducing the use of tobacco in this state fits that criterion.