Tobacco tax money could be shuffled to fill deficit | SummitDaily.com
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Tobacco tax money could be shuffled to fill deficit

JANE STEBBINSsummit daily news

SUMMIT COUNTY – Unless the courts or the Democrat-led legislature decide otherwise, the $175 million the new tobacco tax is supposed to generate in 2005 won’t be going where voters intended.Amendment 35, approved by voters Nov. 2, places an additional 64-cent tax on cigarettes and a 20 percent tax on other tobacco products. It went into effect Saturday.But some smoking opponents are angry that, in the last two days of the legislative session this year, politicians approved House Bill 1455 that will allow funds generated from the tax to be shuffled around to the general fund.State Rep. Gary Lindstrom, D-Breckenridge, said he expects the next Legislature to nullify the bill “immediately” after the session convenes Jan. 12.The original plan allocated $80 million of the $175 million in revenue to Medicaid and the Children’s Basic Health Plan (CHP).Another $33.25 million is slated for community care clinics and $28 million a piece is budgeted for tobacco cessation and prevention and the detection and treatment of cancer, cardiovascular and pulmonary diseases.Another $5.25 million is going to the general fund, old age pension fund and municipal and county governments to compensate for tax revenue reductions due to lower tobacco consumption rates once the new tax is in place.The citizens’ initiative was placed on the ballot to enable the state to continue full funding of tobacco cessation and prevention programs, community health care clinics, Medicaid and the CHP that provides health insurance for poor children.In recent years, legislators have been diverting funds from these accounts to cover other holes in the hard-pressed state budget.HB 1455 changes that.”They didn’t think the people of the state of Colorado should determine how the state budget should be spent,” Lindstrom said. “They felt all Amendment 35 did was take spending power away from the state Legislature. The whole thing is smoke and mirrors. It’s a shell game.”Tobacco cessation and prevention programs have historically been funded by the Master Settlement Agreement 1998, in which the tobacco industry agreed to pay 46 states, including Colorado, $206 billion over 25 years to pay for smoking-related health costs and cessation programs. Colorado’s share is $2.7 billion.But many states, pinched by the economic slump of the past two years, have used some of those monies to fund other state programs.Others, like Colorado, have debated securitizing their share of the funds, which would involve selling the state’s future funds for one lump sum now.Lindstrom anticipates the securitization issue will rear its head again in the next session and believes any bill addressing it will be approved. If the Legislature agrees to securitize the funds, it will garner between $800 and $900 million – about a third of the amount it would get over the 25 years.Tobacco programs get $25 million a year, but last year, $22 million was diverted to the general fund, leaving tobacco programs with $3 million. Locally, that resulted in the closure a program this summer.”It was the intent of the voters to add new money to those programs,” said Don Parsons, who supported the amendment and was instrumental in getting smoke-free legislation passed in Summit County.”The number of uninsured children is said to be 250,000, and it’s getting worse all the time,” Parsons said. “Employers are dropping insurance and people aren’t able to afford the high cost of insurance on the open market. It’s a shame to lose this opportunity to generate more federal money into those programs.””The whole thing will go down in the annals of politics in Colorado as a huge black eye,” Lindstrom said. “It’s flying in the face of the will of the people.”Jane Stebbins can be reached at (970) 668-3998, ext. 228, or at jstebbins@summitdaily.com.


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