Testify Against Tobacco Tax Increase

AFP-Oregon generally opposes tax and fee increases unless they enjoy broad popular support (preferably demonstrated by having been put to a vote) and are tied directly to programs they are intended to fund. One example of a proposal that fails on both these tests are efforts to increase Oregon's tobacco taxes. While AFP does not endorse smoking per se, we do believe that doing so is a personal choice and a matter of personal freedom for adults.

On Wednesday, February 25, the House Revenue Committee will consider HB 2122. The hearing will begin at 3:00 pm. HB 2122 would impose an additional cigarette tax of up to 75 cents per pack and an additional 50 cents per cigar. The first draft of the bill does not indicate what percent of the new revenues raised will be spent on the various items tobacco taxes fund, but items such as senior and disabled transportation programs - which have no direct connection with smoking - are included.

A little over a year ago, voters overwhelmingly defeated a similar proposal (Measure 50) referred to the ballot by the Legislature. Measure 50 was rejected by voters in 35 of Oregon's 36 Counties. There is no reason to believe that voters have changed their minds in only 15 months.

* There are many reasons to oppose HB 2122.

* Sales taxes - such as tobacco taxes - are "regressive" - that is, they hit the poor hard.

* Tobacco taxes are also an unreliable source of revenue - in the past 10 years, tobacco tax revenue has declined 27 percent. Each time the tax has been raised in the past, the actual amount of revenue collected has been less than expected.

* If Oregon chooses to rely on HB 2122's projected revenues for program funding, it will create a long-term funding shortfall in programs it is intended to fund.

* Evidence proves that smokers, especially those in border areas such as Portland, Ontario and Medford, are willing to cross state lines to find less expensive smokes, which is one reason expected revenues do not materialize.

* This bill is intended to grow the size and scope of government in Oregon.

* It will make our economy worse at a time when many

Oregonians are struggling to make ends meet, and place an even larger burden on small business retailers who will be expected to collect and remit the new taxes.

For all these reasons and more, AFP-Oregon would like you to attend the hearing this Wednesday and testify against HB 2122. If you are willing to do so, or if you would like more information, please email mevans@afphq.org. Thank you in advance for your help in promoting appropriate tax policy in Oregon.

Sincerely, Jeff Kropf, State Director, AFP-Oregon

P.S. - We understand that some of you object to smoking on moral grounds. As noted above, AFP does not condone smoking, and does not oppose this tax increase because we want more people to be able to smoke. Should you agree to testify, you are certainly free to state your opposition to smoking as well as to the tax increase. These are not inconsistent positions.