Oregon voters to consider tax on tobacco, e-cigarettes

To bridge shortfall in state's Medicaid program

SALEM, Ore. (AP) — Oregon voters will decide next year whether the state should increase its tobacco tax.

The Senate voted 18-8 Sunday to approve House Bill 2270 and put the question to the voters for next year's general election. The measure will increase the cigarette tax by $2 a pack and impose the state's first tax on e-cigarettes and other vaping products.

The move is central to the governor's plan to bridge a shortfall in the state's Medicaid program. The state is facing a $346 million hole in its Medicaid budget for the next biennium because of decreases in federal funding.

The cigarette tax would be raised from $1.33 per pack to $3.33. E-cigarettes and cigars will be taxed at 65% of wholesale price.

State Sen. Tim Knopp, R-Bend, was among those who voted against the measure.


News release from Oregon Senate Democrats:

Tobacco, e-cigarette tax to increase Oregon Health Plan funding

HB 2270: Increases taxes on tobacco products, sends issue to voters

SALEM – An additional, sustainable funding mechanism for the Oregon Health Plan will be created by increasing taxes on tobacco products and creating taxes on e-cigarettes and vaping products, under a bill that passed in the Oregon Senate.

House Bill 2270 – which passed on the Senate floor today – refers the new taxes, as well as the tobacco tax increase, to voters in the November 2020 election. If it passes, the measure becomes law on Jan. 1, 2021.

Officials estimate the tax would raise $340 million for the 2021-23 biennium, if it is implemented. Revenue from the bill would be distributed on a 90/10 split, with 90 percent of the revenue going to Oregon's Medicaid program – the Oregon Health Plan – and 10 percent going to fund tobacco cessation and prevention programs.

"We are asking voters for funding, through an increased tobacco tax and a new tax on vaping products, in order to fund health care for underserved populations, as well as tobacco cessation services," said Sen. Kathleen Taylor (D-Milwaukie), who carried the bill on the Senate floor. "This tax will make tobacco and vaping products less desirable and affordable for people – especially young people – in order to improve public health outcomes. It also fills a gap in our Oregon Health Plan budget so that we can continue ensuring thousands of everyday Oregonians continue having access to health insurance."

House Bill 2270 increases the tax rate on cigarette distribution by $2 per pack, setting the tax at $3.33 per pack. This increase keeps Oregon's tax rate below California and Washington, ensuring retailers don't lose out on business along transportation corridors. Oregon currently has a $1.33 tax per pack of cigarettes, which ranks well below the national average among states.

The bill also defines "inhalant delivery systems" – also known as e-cigarettes and vape products – and imposes a new tax on those products at 65 percent of wholesale price. Currently, those items are not taxed in Oregon. Additionally, it prohibits the sale of individual cigars unless the individual price of the cigar exceeds $3 or the cost of a pack exceeds $12, keeping skinny, flavored cigars away from children.

The Oregon Health Authority estimates tobacco contributes to 8,000 deaths per year in Oregon and costs the state $1.5 billion in medical care. The Oregon Health Authority also has found that increasing the price of tobacco is the single most effective tool to reduce tobacco use, including youth consumption.


News release from supporting coalition:

Oregon Legislature Sends Bi-Partisan Tobacco Tax to the Voters

$2 per pack cigarette tax increase and wholesale e-cigarette tax​​​​​​ ​crosses the finish line with board coalition support

Salem, Ore.- A coalition comprised of more than 60 leading patient advocacy organizations, hospitals and health systems, labor unions, coordinated care organizations, tribes, public health and health equity groups, and local governments across Oregon want to thank the State Legislature for their passage of House Bill 2270.

House Bill 2270 will refer a measure to Oregon voters that will place a $2 per pack increase on the tax of cigarettes and establish a new wholesale tax on electronic cigarettes. A poll commissioned by supporters shows that 64 percent of Oregon voters support such an effort with generated revenue dedicated to funding health care, in addition to tobacco cessation and prevention programs.

According to the Oregon Health Authority, the proliferation of e-cigarette use among Oregon teens has undone approximately four years of progress in reducing tobacco addiction. Last February, the Centers for Disease Control and Prevention (CDC) released new data showing overall tobacco use among teens has risen 36 percent since 2017, driven largely by soaring use of e-cigarettes. The study shows e-cigarette use among high schoolers jumped 78 percent in the last year.

Nine out of 10 adults who smoke start before age 18. Oregon Health Authority data reveals a $2 cigarette tax increase is projected to keep 19,200 kids in Oregon from becoming new lifetime smokers, help nearly 31,300 adults to quit and prevent 13,700 premature deaths. The proposed $2 per pack cigarette tax would raise approximately $346 million per biennia, while also reducing Oregon's long-term health care expenditures by roughly $1.02 billion. Oregon's current cigarette tax ranks 32nd in the nation. When passed, the new tax will help reestablish the state as a leader in the fight against the influence of big tobacco.

The coalition thanks Governor Kate Brown and Oregon's 80th Legislative Assembly for recognizing this important piece of legislation, and for their leadership in the fight against big tobacco. The coalition looks forward to sharing more with voters in the months to come.

Below is a list of coalition partners.


HB 2270 Coalition Partners:
Advanced Health
AllCare Health
American Cancer Society Caner Action Network
American College of Emergency Physicians, Oregon Chapter
American Heart Association
American Lung Association
Asian Pacific American Network of Oregon
Association of Oregon Counties
Cambia Health Solutions
Cascade Aids Project
Cascade Health Alliance, LLC
CHI Saint Anthony Hospital
CHI Mercy Medical Center
Children First for Oregon
Children's Health Alliance
Clackamas County
Coalition for a Healthy Oregon
Coalition of Local Health Officials
Confederated Tribes of Warm Springs
Confederation of Oregon School Administrators
Cow Creek Band of Umpqua Tribes of Indians
Douglas County Independent  Physicians
Eastern Oregon CCO
Good Shepherd Health Care System
Health Share of Oregon
InterCommunity Health Network
Kaiser Permanente
Legacy Health
McKenzie Willamette Medical Center
Morrow County Health District
Multnomah County
NARAL Pro-Choice Oregon
Native American Rehabilitation Health Association of the Northwest, Inc.
NAYA Family Center
Oregon & Health Science University
Oregon Academy of Family Physicians
Oregon AFSCME Council 75
Oregon Alliance of Children's Programs
Oregon Association of Hospitals and Health Systems
Oregon Council for Behavioral Health
Oregon Dental Association
Oregon Federation of Nurses and Health Professionals, AFT Local 5017
Oregon Latino Health Coalition
Oregon Medical Association
Oregon Nurses Association
Oregon Primary Care Association
Oregon Psychiatric Physicians Assoc.
Oregon School-Based Health Alliance
Osteopathic Physicians & Surgeons of Oregon
Peace Health
Planned Parenthood Advocates of Oregon
Prism Health
Providence Health and Services
Rebels For a Cause
St. Charles Health System
Salem Health
Samaritan Health Services
Sky Lakes Medical Center
Tax Fairness Oregon
The Alliance 4Kids
The Main Street Alliance of Oregon
The Oregon Pediatric Society
Trillium Community Health Plan
Tuality Healthcare
Umpqua Health Alliance
Washington County
Willamette Valley Medical Center
Willamette Valley Physicians Health Authority

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