Municipalities in Summit County continue discussions about how to use nicotine taxes

Vaportoke in Breckenridge is pictured Wednesday, Dec. 1, 2021. The shop sells nicotine products, and towns in Summit County are working to decide how to use taxes from nicotine products, such as cigarettes and vapes.
Lindsey Toomer/Summit Daily News

As budgeting processes begin across the county, discussions around how to distribute nicotine funds in Summit County have also begun — including in Breckenridge.

Funding from nicotine tax is divided into two parts. Part One funds have been directed to programs offered by Building Hope Summit County, Summit Community Care Clinic, Summit School District and Summit County Youth and Family Services. Part Two funding provides additional support intended to be used more broadly toward community health and wellness. Of Part Two funding, $1 million has been divided, with $250,000 going to Building Hope, another $250,000 going to Summit Community Care Clinic and $500,000 going to the Family & Intercultural Resource Center. 

“On July 28, representatives from Summit County Public Health/Youth & Family Services presented a 2023 Part I budget to the town (and) county managers,” said a memo from assistant town manager Shannon Haynes. “The managers support funding the full request for Part I programming. If approved, (Breckenridge’s) portion would be approximately $450,000.”

For Part Two funding, Breckenridge’s share is about $350,000. Managers in the county support dividing the $1 million “with the understanding that this amount of funding may not be sustainable into the future,” according to the memo. 

Summit Community Care Clinic reported that Part Two funds will be used for general operating expenses to support the clinic. Last year it served over 8,000 patients. For Building Hope, funding will go to support ongoing staffing and programming support for community events, enhancing access to outpatient behavioral health treatment through scholarships and implementing media campaigns to reduce the stigma around behavioral health challenges. The resource center’s funding from Part Two dollars will cover operating and program costs that are not covered by grants or donations.

In 2019, Summit County voters decided to prioritize community health by passing a nicotine tax that effectively raised the sales tax on cigarettes to $4 per pack. The tax came along with a 40% increase in sales tax for all other nicotine and tobacco products — including e-cigarettes and vaping devices — which will increase 10% annually for four years through 2024. The measure — called Measure 1A — passed with about 73% of the vote, with 6,321 voters coming out in favor of the new tax compared with 2,292 opposing it. Before the measure passed, Dillon, Frisco, Breckenridge and Silverthorne entered into an intergovernmental agreement with the county that gives each individual jurisdiction control over the tax revenue collected there and each agreeing to use the money to fund broad health initiatives.

Each municipality receives nicotine tax based on where nicotine is bought, which means that cigarettes bought in Breckenridge will have its taxes added to the Breckenridge budget, even though nicotine is a county tax. The amount each entity pays is determined as a percentage of the total revenue collected in the previous year. The town of Breckenridge’s percentage of total revenue has been between 27% to 34%. Special tax revenue is expected to be around $800,000 in 2023.

“I just don’t want to lose sight of how this was based on youth and really making sure that we were disconnecting youth from tobacco. I just don’t want to water it down,” council member Kelly Owens said. “I agree with everything here, but I think anything moving forward where we can really make sure that we’re funneling some of these funds into youth programming, I would really be supportive.”

Earlier in the summer, the Town Council of Silverthorne briefly discussed its revenue from nicotine taxes, which greatly surpassed initial estimates during the budgeting process. For this year, revenue from tobacco is expected to be about $1 million and has grown over the past couple of years. Original budgeting had the revenue stream topping at about $70,000. 

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