Wyoming Looks at Tobacco Tax Hike

The state needs to plug a $14.6 million shortfall by July 2018.

October 08, 2015

CHEYENNE, Wyo. – Where do state legislatures nearly always turn when faced with a budget shortfall? Oftentimes, they turn to tobacco, which is why Wyoming lawmakers are thinking about increasing the tax on tobacco products next year, the Casper Star Tribune reports. By July 2018, the state will likely face a $14.6 million deficit from the Tobacco Settlement Trust Income Account.

“The tobacco trust fund cannot support the programs without program elimination or revenue enhancement,” said state Rep. Steve Harshman, co-chair of the Joint Appropriations Committee. Currently, Wyoming taxes cigarettes at 3 cents per cigarette or 60 cents a pack. It ranks as the eighth lowest cigarette tax rate in the nation, tied with Kentucky.

The legislature pointed out that even a modest proposal of 2 additional cents per cigarette pack would garner around $600,000 annually. “It’s particularly effective at discouraging young people who are a little more price-sensitive from starting to smoke,” said state Sen. Charlie Scott. “It’s also effective in encouraging adults to quit, gives people an extra push. That’s the primary reason to raise the tobacco tax.”

Next month, the Joint Revenue Committee will discuss sponsoring a tax hike bill for the 2016 session. “Maybe there is a middle road where some of these programs could be phased out and maybe there will be a slight increase in the cigarette tax,” said Rep. Mike Madden, co-chair.

Wyoming’s not the only state toying with raising tobacco taxes. Both West Virginia and Alabama are considering an increase in the state cigarette tax.

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