Opponents of a ballot measure to increase taxes on nicotine products to pay for such things as preschool programs question the fairness of taxing a small portion of Coloradans to pay for something for everyone else.
Supporters of Proposition EE, however, say it doesn’t matter that there’s no clear nexus between tobacco and vaping to preschool, adding that it’s a worthwhile program to fund regardless of from where the money comes.
Other than adding a first- ever tax on vaping products, the tax increase on this year’s ballot is substantially identical to one voters rejected in 2016. The only difference is in how that additional revenue would be used.
“One of the big concerns is we are asking approximately 14% of Colorado’s population to shoulder the entire cost of providing universal preschool,” said Michelle Lyng, a Denver consultant hired by the No on EE campaign opposing the measure.
“With there not being a tax on vaping right now, it was an opportunity to get that tax there and close that loophole,” said Jessica Giles, council coordinator for Partnership for Children and Families, who’s working to get the measure passed. “The benefits and the savings of preschool will be actualized in the future as people can see that by investing $1, later those benefits are returned. There are savings that happen when you provide all kids in Colorado a strong start and a good foundation.”
In 2016, tax revenue from Amendment 72 would have gone toward health-related programs and tobacco cessation. It failed 53% to 47%.
This year’s measure earmarks money to rural schools, K-12 education, eviction legal aid and housing programs in its first three years, and predominantly to preschool programs after that, with a small portion going to tobacco education and general state spending.
The measure calls for increasing the per-pack tax on cigarettes from 84 cents to $2.64 by 2027, and rising to 62% the current 40% tax on the manufacturer’s suggested retail price on all other tobacco products, such as cigars and chewing tobacco.
It also assesses a new tax on vaping products that contain nicotine to 62% of its retail cost. Proponents say that new tax is needed to help curb teen use of vaping products.
“Tobacco use is actually down among teens by 6.5% from 2011 to 2016,” said Steve ErkenBrack, former head of Rocky Mountain Health Plans who’s helping pass the amendment.
“Vaping is up 16%. That is perhaps the most significant advantage here is in trying to find a way to help parents keep their kids nicotine free at least until they are adults.”
When fully implemented, the measure is expected to generate about $276 million in tax revenue each year.
Currently, the average price of a pack of cigarettes in Colorado is $5.82, making it the 14th cheapest in the nation, according to the Campaign for Tobacco Free Kids. Increasing that per-pack tax by $1.80 would put the state 36th in the nation, proponents say.
The measure also sets a minimum price for all cigarettes, eventually to as much as $7.50 a pack.
That includes discount cigarettes, which currently cost about half that amount.
That provision got added onto House Bill 1427 approved by the Colorado Legislature during the final hours of this year’s session that placed the measure onto the ballot by Altria, one of the nation’s largest tobacco manufacturers.
That company spent more than $17 million in 2016 to defeat Amendment 72, but is listed on the Colorado Secretary of State’s lobbyist database as being neutral on the bill.
To date, it has not donated any money to the campaigns for or against the measure.
“This is like the government saying that Kia has to charge the same price as Mercedes,” Lyng said. “If that’s the case, who on Earth would buy a Kia? That’s what this does, it sets premium brands at the same price as discount brands. It’s an anti-competitive move by big tobacco to wipe out its competition here in Colorado.”