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Washington already has the nation's second-highest state excise tax on tobacco at 74.9 percent of the wholesale price. Only Alaska charges more, the Seattle Post-Intelligencer reported. And if voters pass statewide Initiative 773 next week, Washington's tobacco tax would jump even further.
Washington's current surcharge on cigarettes would increase from 82.5 cents per pack to $1.425. Additionally, the initiative would increase the surcharge on other tobacco products, including cigars, to 129.4 percent, more than double the wholesale price.
The new tax would boost cigarette prices to more than $5 per pack. Though another jump in cost may convince smokers to quit, as proponents hope, others doubt that any businesses are in danger of losing their entire customer base. Still, doctors, health organizations and the federal Centers for Disease Control and Prevention agree that raising tobacco prices will lead to a steady decrease in use.
Those backing the initiative -- the American Cancer Society and the American Lung and Heart associations, among others -- hope the higher price will take a pack of smokes out of the reach of young people. The legislation also designates portions of the extra revenue to fund the state's Basic Health Plan for low-income families and anti-tobacco campaigns.
Opponents say Initiative 773 misses on two points. First, that earmarking extra revenue for new programs is fiscally irresponsible, and second, that raising prices will not stop people from using. Additionally, they say raising taxes unfairly punishes smokers and could force small businesses, particularly mom-and-pop convenience stores, out of business.
"What you're doing is choosing to tax a minority in the state to benefit everybody in the state," said T.K. Bentler, a lobbyist for the Washington Association of Neighborhood Stores.
Besides critics of the initiative, such as Philip Morris -- the tobacco giant has contributed nearly $76,000 to the I-773 opposition, the report said -- plans to shift tax revenues to certain programs are not sitting well with at least two former legislative budget writers and the non-partisan Washington Research Council.
The council contends that the state likely will collect extra revenue from the higher tax for the first several years, making it possible to reserve the money for new health programs. But later on, if sales drop so much that the extra money would stop coming in, the Legislature will be trapped into continuing the new programs, said Kriss Sjoblom, economist and vice president of research for the council.
Bentler, who is also a lobbyist for RJ Reynolds Tobacco Co., is on the Board of Trustees of the Washington Research Council. The organization, however, has a consistent record of analyzing budgetary issues and coming out against initiatives to set public policy, and against reserving funds for specific programs. He maintains that cigarette makers will still move their products -- that if people do not buy from Washington stores, they will buy in other states, from Native American smoke shops or over the Internet.