Oregon counties desperate for additional revenues support a bill in the Legislature that would allow them to collect a tax on cigarettes.
While we’re sympathetic with their financial troubles — especially those suffering from a loss of timber revenue — we think a hodgepodge of different tobacco taxes across the state could cause more problems than it solves.
The state already collects $1.18 on each pack of cigarettes, and current law prohibits local governments from imposing additional taxes. House Bill 2870 would allow counties to impose additional levies on cigarettes and other tobacco products. The bill would require that 20 percent of the proceeds be spent on health programs, but it sets no cap on the amount of the tax. (HB 2481 and 2514 would extend the taxing power to other local governments, but those bills have not advanced to hearings before the House Committee on Revenue.)
Josephine, Lane and Benton counties have submitted testimony in support of HB 2870, citing their need for funds, the advantages of local control, the benefit to their health departments and the likelihood that a higher price would reduce tobacco consumption and thus improve health.
The hoped-for reduced consumption has also drawn support for the bill from several health organizations, including the Oregon Nurses Association and the Oregon Primary Care Association.
Such arguments ignore the fact that if neighboring counties have different taxes, smokers will seek the lower price. Businesses that are near county borders can be hurt or helped as consumers travel to evade added taxes. And if a county near a state border raises the tax above the neighboring state’s level, shoppers will cross state boundaries to shop. That could cut state tax revenue as well as local businesses’ profits.
If legislators are convinced that higher tobacco taxes would benefit the finances and health of the state, better to raise the rate statewide and pass the added proceeds to the counties.
Better yet, consider that the current level is already providing the desired deterrent effect, and increases would hurt the lower-income citizens most affected because of their higher smoking rates.
As Rep. Jason Conger, R-Bend, said in opposing a statewide tobacco-tax increase proposed in another House bill, such taxes can cause addicted people to do without other products that could make them healthier.