SANTA FE – Hiking taxes on tobacco products – including e-cigarettes – would provide a fix not only for the health of New Mexicans but for the state’s revenues, a lawmaker and health groups said Wednesday as they promoted a “buck-a-pack” tax increase ahead of the coming session.
They said a bill sponsored by Sen. Howie Morales, D-Silver City, would bring in an estimated $33 million more a year even as it discouraged kids from buying tobacco products and prodded adult users to quit.
The tax “is going to save lives, it’s going to save health care costs, and it’s going to generate needed money for the state of New Mexico,” Morales said at a news conference.
He’s on the budget-writing Senate Finance Committee, which along with its House counterpart is grappling with an uncertain revenue picture for next year because of dropping oil prices.
Under Senate Bill 77, the tax on a pack of cigarettes would increase from $1.66 to $2.66, taking the cost of a pack to about $7 and yielding an additional $25 million a year, according to the American Cancer Society Cancer Action Network.
The tax on other tobacco products – little cigars, chewing tobacco and snuff, for example – would be raised from 25 percent of their value to 66 percent, and electronic cigarettes and related devices, such as hookahs, would be included in that category for the first time. That would bring in another $8 million, according to proponents including the American Heart Association and the American Lung Association.
The cigarette tax was last raised in 2010; the tax on other tobacco products hasn’t been increased since its inception 30 years ago.
The additional revenue raised under the legislation would go to the state Children, Youth and Families Department for early childhood education programs, under the bill.
Opponents have long argued that higher taxes would simply drive buyers elsewhere – to Indian lands, for example. And Republican Gov. Susana Martinez, who would have to sign a bill for it to become law, says she opposes tax increases.
“I know it’s a long shot, but it’s also the best shot … of making a difference in the state of New Mexico, with declining revenues,” Morales said.
The most poignant testimony for the legislation came from Albuquerque resident Kim Rutley, who wept as she recounted the death of her 61-year-old sister, Jill, just 11 days earlier from COPD, chronic obstructive pulmonary disease.
Her sister started smoking at 20 – with “no idea the impact this addiction would have on her life” – and was unable to quit when she wanted to, Kim Rutley said. She suffered for seven years with the disease and the side effects of the medication to treat it.
“We need to do whatever we can to prevent this kind of addiction,” said Rutley, who works for the state Department of Health as a health educator in tobacco prevention programs.
“If Jill had it to do over again, she would not have chosen tobacco. She would have chosen life,” Rutley said.
According to the Taxation and Revenue Department, the state is projected to collect $82.4 million from tobacco taxes in the current budget year, with more than 90 percent of that coming from the cigarette tax.
Another bill that was filed in advance of the session by Sen. Cisco McSorley, D-Albuquerque, would tax e-cigarettes.