By Katie Wildes
Virginia has the second lowest cigarette tax in the nation, and while Sen. Creigh Deeds of the 25th district says Virginia is changing, that tax doesn’t look like it will be changing very soon. The last bill that raised the tax was passed in 2005, increasing the cigarette tax from 20 cents to 30 cents a pack.
Since 2005, legislators have introduced several other bills to raise the tax. None have survived.
Del. Rob Krupicka of Alexandria and Del. Patrick Hope of Arlington County each have sponsored bills to increase the cigarette tax, and each stipulated what the additional revenue would fund.
Before 2004, the cigarette tax revenue was deposited into the General Fund, according to Virginia’s annual report for fiscal year 2015. After the increased tax, the money was put towards the Virginia Health Care Fund. Del. Krupicka’s and Del. Hope’s proposed bills had different plans.
The proposed bills had the revenue funding several different organizations. Del. Krupicka’s bill proposed a 566 percent increase, raising the tax to $2. The estimated $500 million generated from this bill would fund K-12 education.
Del. Hope’s bill proposed a 383 percent increase, raising the tax to $1.45 per pack. The expected $288 million would have funded car tax relief, Medicaid and tobacco cessation programs, to help people quit smoking. It was referred to the House Finance Committee, but like Krupicka’s bill, it died.
Sen. Deeds said that a balance needs to be found because although these bills would promote a lower smoking rate, the increase in cigarette taxes could decrease the amount of tax revenue. Fewer smokers would be a positive, but he stressed the importance that tobacco continues to play in Virginia’s economy today.
Deeds said it is not just cigarette sales that infuse money into Virginia’s economy. The amount of jobs Philip Morris USA creates and the amount of money its employees have to spend in Virginia has increased.
Altria, the parent company of Philip Morris USA, cut 200 to 250 of its 3,900 employees in the Richmond area this past March, according to the Richmond Times-Dispatch. These cuts, along with about 250 others across the nation were made to save the company $300 million a year by the end of 2017.
Del. Kathleen Murphy of Fairfax, a vocal supporter of raising the cigarette tax does not feel these jobs created by tobacco corporations are essential to the state’s economy.
“Let’s find different jobs,” she said. “I don’t want to put anybody out on the street but let’s face it, you can’t keep killing people just so people can stay employed. Let’s build a new industry.”
Murphy plans to propose a bill in the 2017 General Assembly to raise the tax again. She would like to change the law to enable all counties to establish their own cigarette tax; currently, only Arlington and Fairfax counties can do so, although all municipalities may.
Deeds says Virginia shifted from an agricultural economy to an economy dependent on technology and government jobs. This move will prompt more changes in the future, according to Deeds. “I think we will get to the point at some time where we raise the cigarette tax again.”
Deeds would like to see that happen soon for the sake of Virginians’ health.
Local Virginia Cigarette Taxes
In Virginia, cities and towns are free to impose a higher cigarette tax but counties cannot, without the state’s blessing.
Only Arlington County and Fairfax County are authorized to impose a local cigarette tax. They can make it any rate, as long as it does not exceed the state rate of 30 cents. Both counties impose the tax at the rate of 30 cents per pack, which means that the effective rate on a pack of cigarettes is 60 cents.
Lexington does not have a local cigarette tax, but cities in close proximity to Lexington do. Charlottesville has a local tax of 55 cents, making the state and local tax combination of 85 cents and Roanoke has a local tax of 54 cents, bringing the state and local tax combination to 84 cents.
Del. Ben Cline, who represents Rockbridge County, could not be reached for comment despite several attempts.
Noah Simon, city manager of Lexington and a native of Kentucky, is familiar with the economy of tobacco. He said Lexington does not see a large amount of revenue from cigarette sales, and therefore a local cigarette tax would not work here.
Simon said Lexington does not generate enough revenue from cigarettes or have the population to entertain an increased cigarette tax. Other counties and cities have more people and as a result, more places to sell cigarettes. In Lexington, with a population of 7,170, Simon predicts this tax would merely anger the sellers and local stores.
Only a year and a half into the job, Simon has been asked by the Lexington city council to address smoking issues in playgrounds, but so far, that has been the extent of his experience on the topic. No one has approached him or the council about in increase in cigarette taxes. If someone did, he said he would carefully consider the impacts of the tax, both positive and negative.