W.Va. tobacco tax hike wins Senate panel approval

West Virginia would nearly triple its cigarette tax and hike its other levy on tobacco to fund health care needs under a measure that cleared a Senate committee hurdle Thursday.

The Senate Finance Committee must now review the legislation amended and advanced by the chamber's Health and Human Resources Committee on a non-unanimous voice vote.

The bill would raise the per-pack tax on cigarettes from 55 cents to $1.55. The tax rate for other tobacco products would climb from 7 percent to 50 percent of their wholesale price.

Officials estimate $128.8 million in annual revenues. As amended, the bill would commit $50 million of that toward public retiree health costs for 10 years. Another $40 million annually would benefit Medicaid, while $6 million would fund anti-tobacco efforts and $1 million would aid a proposed school of public health.

Of the remaining annual revenues, 30 percent each would go to oral health and substance abuse programs. Nearly a quarter would fund in-home senior care, and the rest would help early childhood development efforts.

West Virginia's cigarette tax rate ranks 44th among states, according to 2010 figures from the Campaign for Tobacco-Free Kids. That's still higher than neighboring Virginia, which sports the lowest tax at 30 cents per pack.

Hiking West Virginia's tax to $1.55 would give it the 22nd-highest rate, barring changes by other states. That would be higher than neighboring Kentucky's 30-cent tax and Ohio's $1.25 tax, but still lower than the $1.60 charged by Pennsylvania and the $2 by Maryland.

Bill critics warn that higher taxes will cost retailers in border counties revenues and jobs. Sen. Truman Chafin, D-Mingo, warned that businesses in his district would suffer at the hands of competitors in neighboring Kentucky and Virginia.

"We don't have any supermarkets left in our town now," said Chafin, of Williamson. "You're just sending a signal to get out of this state and do all your shopping on the other side from West Virginia."

Council on Indian Affairs Takes Up Debate on Cigarette Tax

The debate over the possibility of a significant bump in the cigarette tax moves to the front burner today. The Idaho Council on Indian Affairs is expected to take up the discussion, which includes a plan to increase the tax on a pack of smokes from 57 cents to $1.25. Such an increase would be expected to generate nearly $50 million, the proposed shortfall for Health and Welfare's Medicaid programs.

Idaho's Native American reservations are not required to uphold the tax but lawmakers are eager to get the tribes on board, because a bump in price could cause a dramatic disparity between the price of cigarettes sold on and off reservations.

According to the American Lung Association, Idaho's current cigarette tax generates approximately $47 million in revenue. So why wouldn't a 73-cent bump raise more than $50 million? Because the increase is also expected to cut down the amount of cigarettes sold in Idaho.

Cigarette Smuggling Big Business At Costa Rica's Border With Panama

The anti-tobacco legislation applied in Panama last year, which increased the price of cigarettes, had led to an increase in smuggling of tobacco products from Costa Rica.


The president of the Cámara Costarricense de Restaurantes y Afines, Edgar Marin, says the situation has led his group to file charges with the Ministerio de Salud and the Ministerio de Seguridad.

Marin explained that the Panamanians do not come to Costa Rica just to buy oil and other products, but also cigarettes for resale in their country, where a pack of cigarettes purchases here for us$1.50 sells for us$5 in Panama.

Costa Rica and El Salvador are the only countries that have not adopted anti-tobacco laws in Central America.