Lawmakers look at more tobacco taxes

Published On: Feb 24 2013 06:31:00 PM HST

There are an estimated 153,000 smokers in Hawaii. Their habit creates millions of dollars for the state.

Instead of preventing more residents from smoking, there is a current effort to cash in on their addiction.

At Honolulu Bowls smoke shop, loose tobacco products are hot sellers. They allow smokers to cut their costs in half, by rolling their own cigarettes.

"They save a lot of money. It can be a big savings, and that is important because everything is tight these days," said Kumu Kapule, with Honolulu Bowls.

Honolulu Bowls and other tobacco businesses could take a big hit though if some state lawmakers get their way. Senator Rosalyn Baker introduced a bill that would boost taxes on loose tobacco and other tobacco products, which would make them just as expensive as cigarettes.

"Because our tax on cigarettes got real high people were looking for alternatives. Those alternative are just as deadly as cigarettes," said Baker.

The measure is advancing through the State Capitol, but not all lawmakers are convinced the state should raise taxes because of health concerns.

"It has nothing to do with health. It has everything to do with the money. The state wants to keep smokers alive so they can keep pumping money into their coffers," said Senator Sam Slom.

The amount of money the state gets from smokers and tobacco is substantial, and those numbers are growing every year.

In the year 2000, the tax on each pack of cigarettes was $1, that revenue added up to $40 million for the state.

The tax grew to $3.20 a pack by 2011, when the state received $136 million in revenue.

With all the tobacco money the state is taking in, some residents assume part of it would go to preventing people from smoking in the first place, but that is not the case.

"Currently tobacco prevention doesn't get any of the tax money or other money from tobacco taxes,"said Jessica Yamauchi, with the Coalition for a Tobacco-Free Hawaii.

Additional money, raised by the new tax, wouldn't go to prevention either. It would be spent on the University of Hawaii Cancer Center. Although it would include some projects to develop programs to help smokers kick their habit.

For the past 12 years, Hawaii also been receiving millions of dollars from the nationwide tobacco settlement.

Hawaii lawmakers originally set aside 25 percent of the funds for smoking prevention and control.

Just two years later in 2001 that distribution was cut in half to 12.5 percent which was then reduced to 6.5 percent in 2009. Finally, in 2012 that amount dropped to zero.

Now, the majority of the money goes into the state's general fund to be used for other purposes.

Research has shown higher costs of tobacco can impact smoking levels.

"The idea is a deterrent; that when you raise the price of cigarettes and other tobacco products then use goes down," said Baker.

In the last 10 years, as taxes have increased Hawaii's smoking rates have dropped 26 percent for adults, and double that number for teens, adding up to 43,000 fewer smokers.

But the Department of Health's own report warned "any cuts to current spending and activities could result in backsliding on smoking reductions" -- a report that came out before prevention funding dropped to zero and forced some non-profit organizations to scramble.

"We don't currently fund at CDC levels, so we're always trying to make sure there is adequate funding for tobacco prevention," said Yamauchi.

Stopping people from lighting up would prevent a cycle of addiction for smokers, but Slom said Hawaii also needs to kick its addiction to tobacco money.

"Absolutely, but also to liquor money, hotel money -- the state is addicted to money, but it doesn't know how to reign in spending like the rest of us do," said Slom.

Smokers could see even more increases in the future. Senator Baker said once other tobacco products become just as costly as cigarettes, it may be time to look at raising the tax rate again.


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