Legislators disagree on merits of 'sin tax' increase

As part of Gov. Mark Parkinson’s effort to get a statewide smoking ban passed during the 2010 legislative session, he indicated he might support raising taxes on cigarette sales.

The governor has said his decision would be based on whether the state needs more revenue to balance the budget.

It’s a proposal that makes House Majority Leader Ray Merrick, R-Stilwell, scratch his head in wonderment.

“I laugh every time I hear that,” he said. “You do that, then they wonder, ‘Gosh! Where did all the revenue go?’

“Not only will a new tax affect the revenue, but people will quit buying cigarettes.”

Rep. Owen Donohoe, R-Shawnee, who said the only statewide ban he would support would be the total elimination of cigarette sales, added that he would not support any effort to increase taxes on cigarettes.

“One reason is the revenue side of it,” he said. “I looked at the states that increased cigarette taxes and a lot of them have increased (the taxes) within the last year because of the revenue situation.

“But when you go back and you look, they lost revenue because people went elsewhere to buy their cigarettes: on the Internet, they were close to other states, or some other mechanism to buy cigarettes.”

Rep. Pat Colloton, R-Leawood, said she not only would support raising the cigarette tax, but also the tax on alcohol.

“I would support raising cigarette taxes for the purposes of implementing some of the recommendations of the health policy oversight committee: providing programs in schools relating to obesity and wellness, providing programs for seniors, providing programs for others relating to wellness.

“I’m also in favor of other consumption taxes. We have not raised the wholesale gallonage tax on wine, liquor or beer since 1977. I think it’s about 15 cents a gallon for beer and 30 cents a gallon for wine. If we were to double those, it would raise $16 million and if we were to triple them, it would raise another $32 million, which I would apply to, for example, the disability waiting list.”

She said in states that have dramatically increased cigarette taxes, sales have decreased but revenues have increased.

“The percent of purchases did go down, but the revenue went up,” she said.

Senate Vice President John Vratil, R-Leawood, said it is possible consumption taxes on tobacco and alcohol could be increased during the 2010 session.

“I think that’s a possibility, but I would have to see the detailed legislation,” he said. “But I would have no objection to a reasonable increase in the tobacco tax.

He said the gallonage tax had not been increased since 1971.

“I think that’s another possibility; I think it’s time,” Vratil said. “I think if we’re going to see any tax increases it will be at the very end of the session. I also think if someone proposes a tax increase early in the session it will be shot down.

“That’s why it’s strategic to make the proposal at the right time.”

He questioned Parkinson talking about the tobacco tax more than three months before the session begins.

“That’s early,” he said of the timing. “It depends on whether he builds it into his budget or not. If he doesn’t build it into his budget, then I don’t know why he’s putting that target out there for people to shoot at.”

Vratil also said there is a fine line in raising the tobacco tax.

“If you’re looking at that increase in taxes as a revenue producer, then definitely there is a point where the loss in sales more than compensates for the additional revenue and you end up with a net loss in revenue.

“If you’re looking at an increase in the tax in order to encourage people not to smoke and you don’t care about revenue, then you’ve got a different story.”

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