Indiana cigarette tax proposal raises questions on spending
MUNSTER, Ind. (AP) — Indiana legislative leaders are willing to increase the state’s cigarette tax but say any measure must include specifics on how the new revenue will be used to improve public health.
Indiana’s 21.8% adult smoking rate is one of the highest in the nation, The (Northwest Indiana) Times reported. The Indiana Chamber of Commerce has recommended raising the cigarette tax by $2 per pack to $3.
“The pandemic has taught us that poor quality of health, unfortunately, has dire consequences, and we need to figure out ways to improve Hoosier health,” said House Speaker Todd Huston, a Republican of Fishers.
However, Huston said his experience as the former chairman of the budget-writing House Ways and Means Committee has taught him that while increasing the cigarette tax is likely to decrease smoking rates, it also will make the additional state revenue less reliable.
“The whole genesis of increasing the cigarette tax is it’s the one thing, more than cessation programs and other things, that’s been shown to reduce smoking,” Huston said. “So literally the day you implement a new tax rate is the most amount of money you’re going to collect if the policy is successful.”
House Democratic Leader Phil GiaQuinta, of Fort Wayne, said the money raised by a higher cigarette tax eventually will decline, but it’s probably still worthwhile.
“I just don’t want it to go back into the General Fund or something like that. I’d like to really see some concrete programs that we’re going to use the money for to improve the health of Hoosiers,” GiaQuinta said. “There’s a lot of needs out there.”
State Senate Democratic Leader Greg Taylor, of Indianapolis, said if lawmakers want to tax smoking to raise revenue, the best course would be to legalize and tax recreational marijuana as most of Indiana’s neighboring states already have done.
“We’re going to be on an island out here by ourselves,” Taylor said. “The implementation of medical or recreational marijuana in Indiana would raise more money than any cigarette tax that we could ever think about.”
However, Republican Gov. Eric Holcomb has said he opposes legalization as long as marijuana is classified as a prohibited controlled substance by the federal government.