Fight the Boom and Bust (Part 2): “Sin” Tax

May 9, 2017

A whopping 63 percent of Wyoming voters said they are willing to pay higher taxes, according to a UW poll, but primarily the so-called “sin taxes” of beer and alcohol (81 percent) and cigarettes (78 percent).

Still, proposals to pass these no-brainer increases in the midst of a budget crisis failed this past session. When they came up in committee, no one was there to speak on their behalf, and a long line of lobbyists was on hand to oppose them.

One might hope lawmakers would recognize that 80 percent public support should count for something. But then again, they’ve got their lobbyist buddies to take care of.

Wyomingites widely support raising taxes on "sinful" behavior

Wyomingites widely support raising taxes on “sinful” behavior

One bill to raise “sin taxes” was HB-151, which would have increased the state cigarette tax from 60 cents a pack to 90 cents. The modest hike would have generated about $9.3 million, with about one-third of the new revenues earmarked for mental health programs.

Since the state’s cigarette tax hasn’t been raised from since 2003, the proposed 30-cent-per-pack increase wouldn’t have even accounted for inflation. The 60-cent-per pack tax 14 years ago has a value today of 93 cents.

HB-151 narrowly passed the House on final reading, by a vote of 31 – 28. But the Senate Revenue Committee, perhaps not aware—or not caring—that more than three-fourths of poll respondents said go ahead and raise the cigarette tax, killed it 2-3. Since it was being considered by Senate Republicans, who almost universally abhor even the mention of a tax increase, it wasn’t a surprise.

HB-168, sponsored by Rep. Cathy Connolly (D-Laramie) attempted to generate even more money—$21 million—by raising the tax on a pack of cigarettes to $1.15. That’s still below the national average of $1.58. A noble effort, she related it was also meant to improve the health of poor people who often quit smoking when higher tobacco taxes are more than they can afford. However, the House Revenue Committee killed the bill, 4 – 5.

Another Connolly bill, HB-166, would have significantly increased taxes on beer, wine and distilled spirits to raise $6.7 million per year that would have gone directly into the School Foundation Fund. The excise tax on beer would have increased tenfold from 2 cents per gallon (the lowest in the nation) to 20 cents. The wine excise tax would have jumped from 28 cents to 72 cents per gallon, while spirits would have been hiked from 94 cents to $3.73 per gallon. The House overwhelmingly rejected the bill, 8 – 51.

If Wyoming hopes to end the boom-bust cycle in which it has historically been trapped, raising “sin” taxes isn’t going to fix the problem. But keeping up regular increases on these taxes—that basically no one will notice and, in all likelihood, will also decrease the state’s healthcare spending—would be a stark deviation into the realm of sanity and fiscal responsibility for the Legislature.

The people of Wyoming have already expressed their support for this move. But apparently they’re going to have to become vocal and demand it.

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TELL THE JOINT REVENUE COMMITTEE TO FIX WYOMING'S BROKEN TAX STRUCTURE

Wyoming’s current budget crisis is a perfect example of the harm our current tax structure inflicts. Facing a deficit of hundreds of millions of dollars, the state is axing major public services like education, healthcare, corrections, and infrastructure maintenance, while defunding programs from suicide prevention to Meals on Wheels.

The Joint Revenue Committee will meet this Thursday and Friday, May 11 – 12, to potentially make much-needed reforms. Use this quick and easy form to encourage them to save us from the boom-and-bust revenue roller coaster that defunds our public services.

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