Cigarette Taxes Rise Again, President Obama Signs Bill Banning Flavored Cigarettes
As of tomorrow, smokers will pay an extra dollar a pack to get their nicotine fix. Coming after a new 62 cent per pack tax levied by the federal government last year, the latest tax was recently passed by the 2009 Florida Legislature and the money raised will go to offset the rising costs of Medicare and Medicaid. Cigars will not be affected by the bill, and for other tobacco products - such as pipe or chewing tobacco - the surcharge will be 60 percent of the wholesale price.
“The idea is that since smokers cost more, that they would have to pay for themselves, healthwise,” said Randy Miller, Executive Vice President of the Florida Retail Federation. “They expect to raise about a billion dollars, but, since this will probably make a lot of people finally quit, I don't think they're going to be able to count on that money in the future.”
The cost of smokers' health problems was cited as a reason by Senator Ted Deutch, D-Boca Raton, who introduced the legislation.
"This legislation has always been a public health initiative. All of the research shows the best way to prevent kids from taking up smoking is to make cigarettes cost more," said Deutch.
For the last two years, Deutch and some of his colleagues not only worked on drafting the legislation, but also on convincing other legislators that it was to improve public health. He said that $1.3 billion is spent annually in Florida's Medicaid program to treat patients with health problems resulting from tobacco use - although the smoking population only contributes $400 million into Medicaid.
A portion of the tobacco money will also be used for cancer research.
"Of that money, $50 million annually will be invested in cancer research here in Florida so we have the opportunity to come up with new treatments and possibly a cure," said Deutch.
However, most of that yet-to-be-collected money has already been earmarked to patch holes in the state budget. At last week's Lee County Commission meeting, the Board listened to state lobbyist Keith Arnolds as he gave a presentation about on what had occurred during the recent session.
“The cigarette tax money – one billion – is supposed to go right into the health and human services budget, but the legislature has taken all of it, along with money from other places like the Department of Transportation, and used it to balance their budget,” explained Arnolds. He went on to say that the money would be replaced by stimulus funds.
“Only the government would spend money that it doesn't even have yet,” said Miller, when we asked him about what Arnolds said.
The Department of Business and Professional Regulation (DBPR), Division of Alcoholic Beverages & Tobacco, has issued guidelines for implementation of the new tobacco taxes. The new $1/pack cigarette/tobacco tax goes into effect on July 1, 2009. The DBPR is required to collect this tax from all retailers that sell cigarettes and other tobacco products. Cigarette/tobacco retailers are compelled to perform an inventory and then pay a floor tax based on that inventory.To ensure compliance, Florida statutes require that a stamp be placed on all cigarettes sold in Florida to show that the tax has been paid.
The Division of Alcoholic Beverages and Tobacco has a toll-free number for reporting violations of this part. Upon a determination that a violation has occurred, the informant who provided the information that led to the determination shall be paid a reward of up to 50 percent of the fine levied and paid. Each retail dealer must conspicuously display a notice in every location where cigarettes are sold.
On the federal level, on Monday, June 22nd, President Obama signed into law historic anti-smoking legislation that gives the government sweeping authority to regulate tobacco products.
"For over a decade, leaders of both parties have fought to prevent tobacco companies from marketing their products to children and provide the public with the information they need to understand what a dangerous habit this is," said President Obama, who has struggled for years to kick his own nicotine habit.
Among the provisions of the new law is the banning of cigarettes sweetened by candy flavors or any herb or spices such as strawberry, grape, orange, clove, cinnamon or vanilla. Cigarettes advertised as "light" or "mild," giving the impression that they aren't as harmful to health, will also no longer be found on store shelves.
Cigarette packages will have warning labels that cover 50 percent of the front and rear. The word "warning" must be included in capital letters.
Any remaining tobacco-related sponsorships of sports and entertainment events will be banned, as will giveaways of non-tobacco items with the purchase of a tobacco product. A federal ban will be imposed on all outdoor tobacco advertising within 1,000 feet of schools and playgrounds.
Lawmakers and the thousand or so health and consumer groups that endorsed the bill believe will help to significantly reduce the 400,000 deaths and $100 billion in health care costs attributed every year to smoking in the U.S., as well as prevent new smokers from lighting up.
Keri Hendry