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About The daily Astorian. (Astoria, Or.) 1961-current | View Entire Issue (Oct. 30, 2018)
3A THE DAILY ASTORIAN • TUESDAY, OCTOBER 30, 2018 State seeks tax increase on alcohol, cigarettes A drive against smoking and binge drinking By CLAIRE WITHYCOMBE Capital Bureau SALEM — State health officials say they want a sub- stantial tax to drive down smoking and binge drinking. About 20 percent of Ore- gonians smoke, exceeding the national average and increas- ing their risk for strokes, lung cancer and heart disease. It’s the state’s highest cause of preventable death. And in a state renowned for hoppy IPAs and fruit-forward pinot noirs, alcohol-related deaths have climbed about 38 percent since 2001, accord- ing to the Oregon Health Authority. Nearly 2,000 people died from alcohol overuse in the state in 2016, making it Ore- gon’s third most common cause of preventable death. State officials think they can use tax policy to improve public health and reduce health care costs. “The purpose of this was to use this as a lever to cut down consumption,” said Pat Allen, Oregon Health Author- ity director. But the success of such policies, or “sin taxes,” may depend on whether price increases are significant enough to deter consumers, and whether smokers or drink- ers can find products else- where at lower prices. Nationally, alcohol taxes haven’t increased much since the 1990s, which makes it more challenging to under- stand drinkers’ sensitivity to price increases, said Benjamin Hansen, a professor of eco- nomics at the University of Oregon. The efficacy of tobacco taxes may also be changing with the growing popular- ity of largely untaxed alterna- tives like e-cigarettes and vape Oregon Liquor Control Commission State health officials say they want a substantial tax to drive down smoking and binge drinking, two leading causes of preventable death for Oregonians. pens, which typically have less nicotine and are marketed as less harmful. Those products aren’t cur- rently taxed in Oregon, accord- ing to the Public Health Law Center, but the health author- ity is proposing to tax them. Hansen said policymakers should also consider whether tobacco consumers could get a similar product more cheaply on the black market, online or in another state. Not a long-term strategy A successful “sin tax” doesn’t work as a long-term strategy for the state budget. “The better these taxes are for health, the worse they are for revenue,” Hansen said. The health authority wants to increase taxes on beer, wine and cider by 10 percent, which officials estimate could raise $491 million over two years. The agency also wants to raise $293 million through a $2 per pack tax on cigarettes, a tax on “inhalant delivery sys- tems” like e-cigarettes, and removing the 50-cent limit on taxes per cigar. Oregon’s cigarette taxes rank about 30th among states, according to the Tax Foun- dation, a Washington, D.C., think tank. Idaho is the only neighboring state with lower cigarette taxes. Advocates maintain tax increases dissuade people from smoking. “A substantial body of research, which has accumu- lated over many decades and from many countries, shows that significantly increasing the excise tax and price of tobacco products is the sin- gle most consistently effective tool for reducing tobacco use,” according to a 2017 study by the World Health Organization and the National Cancer Insti- tute. “Significant increases in tobacco taxes and prices reduce tobacco use by leading some current users to quit, pre- venting potential users from initiating use, and reducing consumption among current users.” The health authority’s pro- posal would tax vape pens and e-cigarettes that are seen as a lower-nicotine alternative to cigarettes or cigars. The health authority is bud- geting about $29 million of the taxes for tobacco and chronic disease prevention. The Leg- islature would decide how to distribute the rest. The state also has some of the lowest alcohol taxes in the country, according to the health authority. Beer taxes remain at the same level they were in 1977 and the rate for wines was last changed in in 1983. Blind Repair and installation at your front door THE HOLIDAYS ARE COMING! Have you thought about what to get your wife? How about the hubby for his man cave? Do you like to sleep in but can’t? Watch movies in complete darkness? We can help you pick out a classy, beautiful gift or a simple update to your home for that special someone. Wood • Faux Wood • Shades • Shutters Sales and Repair Services Lanny & Kacey Hatt Schedule your appointment at 503-440-2206 kacey.hatt@bloominblinds.com bloominblinds.com CCB# 221700 “In real terms, beer and wine taxes fall every year because they do not keep up with inflation,” the health authority’s budget proposal states. The proposal includes automatic tax increases to account for inflation. The agency said a 10 per- cent increase in the price of alcohol would reduce exces- sive drinking by 5 percent. They said such alcohol abuse costs the state’s economy about $3.5 billion every year. The agency said the tax increase would reduce by $287 million a year costs “related to lost productivity and absen- teeism, premature death, health care, crime, motor vehi- cle crashes and fetal alcohol syndrome.” The agency proposes spending $49 million more on alcohol and drug treatment. The rest would be distrib- uted under an existing for- mula to the state general fund, which pays for general state operations, and cities and counties. As proposed, the tax increases on alcohol and tobacco would be one of the largest state tax hikes in recent times. Some prior tax bills have been comparable in scale. In 2009, lawmakers raised income taxes by about $801 million for the biennium. And last year’s transporta- tion package, which included several tax increases, was designed to raise more than $5 billion over 10 years. In the next two-year budget, it’s expected to raise $910 million. Big lift It’s not easy to raise taxes in Oregon, because those mea- sures require approval from 60 percent of the lawmakers in the state House and Senate. Taxes on tobacco and alcohol are an especially big lift. In 2016, Gov. Kate Brown proposed raising cigarette taxes by 85 cents per pack, but that did not come to fruition, and taxes remain at $1.33 per pack. Brown’s office didn’t respond to written questions about whether the gover- nor supported the proposed tax increases on alcohol and tobacco. “Agencies drive the con- tent of their proposals, and our office is not in the habit of striking ideas down or esca- lating them until the appropri- ate point, which takes place when the governor finalizes her budget from a wide list of options that agencies bring to the table,” spokeswoman Kate Kondayen wrote in an email. Allen said he and his staff have discussed the proposal with her staff but got no direc- tion on it from the governor or her office. The Capital Bureau is a collaboration between EO Media Group, Pamplin Media Group and Salem Reporter. RE-ELECT EFFECTIVE. Betsy makes it happen. From highway improvements, to the Oregon Manufacturing Innovation Center, to rebuilding Vernonia schools, to supporting local jobs, Betsy delivers. INDEPENDENT. Betsy is a no-nonsense leader who rejects narrow partisan labels. 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