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Tobacco tax bill met with objection

February 28, 2011
By CARRA HIGGINS, Staff Writer

A Senate bill stalled in the body's finance committee could mean taxes paid by tobacco users will help the state get out of its other post employment benefits quandary. However, acting Gov. Earl Ray Tomblin has his doubts that now is the right time to increase any consumer taxes.

Senate Bill 362, sponsored by acting Senate President Jeff Kessler, D-Marshall, Dan Foster, D-Kanawha, Brooks McCabe, D-Kanawha, and Roman Prezioso, D-Marion, would increase the taxes from 55 cents to $1.55 on each package of 20 cigarettes; and any other form of tobacco product, an increase from 7 percent to 50 percent of the wholesale price.

It's estimated that each year the increase would generate $130 million, which would be divided up among several state entities. The West Virginia Retiree Health Benefit Trust Fund is set to receive $50 million each year for 10 years; West Virginia Medicaid would get $40 million, with an additional $6 million per year for tobacco control; and $1 million per year for five years going to the West Virginia University School of Public Health. If the tax generates any additional funds, 30 percent is designated for oral health improvement; another 30 percent would be given to substance abuse prevention and treatment programming; 24 percent for in-home elderly care services; and 16 percent will go toward early childhood development programming.

According to the West Virginia Budget Office, during the 2010 fiscal year taxes on cigarettes and smokeless tobacco generated revenues of a little more than $140 million.

However, tobacco companies are lobbying against the increase. An e-mail received by The Inter-Mountain titled, "Don't let Charleston stick you with the tab" from Altria Client Services on behalf of Philip Morris USA and the U.S. Smokeless Tobacco Company encourages West Virginia residents to contact lawmakers and "tell them it's just not right to single out adult tobacco consumers to help cover the tab for big government programs that benefit everyone." A link provided in the e-mail also states that "important government programs should not be funded with an unreliable and declining revenue source, such as tobacco."

The Associated Press reported that Tomblin spokeswoman Jacqueline Proctor said that the state's economy remains fragile amid signs of recovery and stable government finances.

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