Oregon Reignites Tobacco Tax Debate

The Oregon House Revenue Committee will be holding a second hearing on raising taxes on tobacco products, including cigarettes, tomorrow, the Statesman Journal reports. Supporters are hopeful that such a measure will gain approval at this stage because a fall 2010 survey found that 71 percent of respondents were in favor of increasing cigarette taxes by $1 per pack.

“Everything is on the table this session, but taxes are controversial,” said state Rep. Vicki Berger, who co-chairs the committee. “We've heard arguments about this tax before, but the public may not have — and I think it's appropriate to bring it forward for a discussion.”

To increase taxes, both chambers must have a 60 percent majority in favor of the measures. This session sees the House evenly split among Republicans and Democrats and the Senate holding a slim majority of Democrats.

Currently, Oregon taxes cigarettes at $1.18 a pack, ranking the state in 27th place. One of the bills to be considered would hike the tax $1. One of those proposals also contains tax increase on other tobacco products. An additional bill would allow the imposition of additional taxes by county governments. Currently there exists a preemption precluding local jurisdictions from imposing taxes beyond those of the state.

Some supporters of a cigarette tax increase say they are more interested in curbing smoking than raising additional funds. “The main purpose of the cigarette tax is to reduce the use of the product,” said Rep. Mitch Greenlick, who is sponsoring the $1 hike. “Tobacco is the most addictive product of any kind we deal with.”

Those opposed to any jump in the cigarette tax say that such increases would impact low-income residents more than other residents. “I think it’s important that you look at who is paying and how much they are paying,” said Mark Nelson, a lobbyist for R.J. Reynolds and 7-Eleven.

John Calder said the 2002 increase of 60 cents per pack contributed significantly to the closure of his stores. “Within a year after the last tax increase, I had to close my second store and lay off six employees,” he said.