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News
Sin state
Street Roots « February 13-19, 2015
A by-the-numbers look at how
bad habits become big revenue
fo r the state o f Oregon
BY EMILY GREEN
S T A F F W R IT E R
A s Oregon adds marijuana to its list of
taxable sins, Street Roots examines the
JLfinancial impact of the state’s excise
taxes, also known as "sin taxes.” How much
revenue do sin taxes generate for the state and
what do the taxed sins ultimately cost
residents?
While sin taxes are, in part, used to fund
programs that offer treatment and prevention of
alcohol abuse, problem gambling and tobacco
use, much of the revenue goes toward programs
that have nothing, to do with these vices —
programs that are paid for through the state’s
general fund. That means tobacco smokers,
gamblers and drinkers — and soon pot smokers
— are paying additional taxes for programs, such
as education, that benefit all Oregonians.
Sin taxes make up about 4 percent of the
state’s annual budget, landing Oregon among
the 10 states that draw the most funding per
capita from sin. Proponents argue they are a
necessary evil. Some argue the additional cost
discourages people from buying harmful
products, such as cigarettes and alcohol. But
opponents say governments shouldn’t profit
from products they are charged with regulating.
According to national Campaign for Tobacco-
Free Kids, tobacco taxes are a “win-win-win”
because they help states in fiscal crisis, reduce
smoking rates and earn public support. It says
for every 10 percent increase in cigarette
prices, youth smoking is reduced by 7 percent.
Critics argue the taxes hit poor Oregonians
disproportionately and do not act as a deterrent
to those who are addicted. They will simply find
the money to pay for price increases by cutting
down on other areas of spending.
According to the Oregon Health Authority, 1
out of every 3 Oregonians who makes less than
$15,000 a year smokes cigarettes. This is in
comparison to 1 in 10 Oregonians who make
more than $50,000 per year who smoke.
Additionally, the average household income of a
problem gambler is about $20,000 a year less
than the state’s median household income.
“If you listen to legislators in hearings down
in Salem, which I’ve done a number of times,
you hear them say ‘smoking is bad for you,
marijuana is bad for you, you shouldn’t gamble,’
but then they tax these things,” says Steve
Buckstein, founder of the Portland-based
nonpartisan public policy research group,
Cascade Policy Institute.
“But then they become addicted themselves
to the revenue that those taxes carry, so they
have created a moral hazard for themselves. On
the one hand, they don’t want you to do those
things, but on the other hand, they hope you do
them so they can get the tax revenue to spend
on whatever their projects are,” says Buckstein.
“It’s the majority picking on the minority. The
same thing will happen, I predict, with
marijuana. Legislators say they don’t want
people to smoke it, but they’re hungry for the
revenue.” I
X
$9.9 billion
Amount Oregonians
stuck into Oregon Lottery operated video slot
and poker machines in fiscal year 2013.
$846 million
Oregon Lottery’s
revenue in 2014 after prize payouts.
71 percent
$478
of Oregon Lottery’s
revenue comes from video gaming machines.
$2,193
$257.6 million
Amount
Oregon collected in tobacco taxes in 2014.
Estimated amount spent annually
on cigarette taxes by a pack-a-day smoker after
2015 tax increase.
Average annual amount spent
by Oregon video gaming player.
89 percent
^■086
lastyear.
Tobacco-related deaths in Oregon
of Oregon’s problem
a
gamblers in treatment prefer video-machine
games including video poker, video line games
and slots.
5
O
M
Amount Oregon
spent on tobacco prevention in 2014.
$23,919
Average debt of Oregon’s
problem gamblers seeking treatment.
$31,068
Average household income
of an Oregon problem gambler in treatments
$2.5 billion
Annual statewide
health and economic cost of tobacco use in
Oregon.
J
25 percent
Level to which Oregon
funds tobacco prevention and education
compared with the recommended level from the
$4.1 million
64 percent
Amount spent by t
state of Oregon on probleir
treatment and prevention,
30 percent
Estimated reduction
in pe r capita cigarette consumpion Oregon would
see withbr 1Q years if it funded tobacco
tie GDC
recommended levels.....................
prevention and education programs at
of Oregon problem
gamblers in treatment are at risk of suicide.
Sources: Oregon Lottery, Oregon Heatlh Authority and the 2614
Gambling Program Evaluation Report
I
1
Source: The Oregon Health Authority, Oregon Public Health Division