Republican legislators propose taxing electronic cigarettes, as a health measure and a revenue measure; died in Senate in 2018

By Al Cross

“This is the classic win-win scenario,” Rep. Jerry T. Miller, a Louisville Republican and State Government Committee chair, said at a Frankfort news conference.

An e-cigarette tax was included in a bill that raised the tax on traditional cigarettes last year, but was removed in the Senate, just before final passage and after lobbying by Altria Group, the largest tobacco company and 35 percent owner of Juul Labs, the largest e-cig company.

Senate leaders declined to explain the move then, and Senate President Robert Stivers said Tuesday he couldn’t recall what happened. Sen. Chris McDaniel, chair of the Senate Appropriations and Revenue Committee, said he wasn’t sure what happened, but thought that a staff member may have raised “a definitional problem” that couldn’t be resolved at the last minute.

In this year’s 30-day session, Miller unsuccessfully sponsored an e-cigarette tax bill that would have dedicated the estimated revenue of $35 million a year to Kentucky’s unfunded pension liability. He said this one does not, on the advice of House Speaker David Osborne, who said the lack of earmarking would get the bill more support.

“We’ve got a lot of support for this bill,” said Ben Chandler, president of the Foundation for a Healthy Kentucky, adding that it would be “one of our priority focuses” in the 60-day session that begins Jan. 7. “It has the potential to go a long way toward cutting youth e-cigarettes use in this state. . . . We will keep a whole lot of young people from getting addicted.”

Dr. Jeffrey Howard, the state health commissioner, said the bill “really has the opportunity to make a true impact on health,” by discouraging e-cig use by young people, whose brains don’t fully develop until they are 25. “It’s incumbent on us to make sure they’re aware of what these electronic cigarettes can do,” he said.

“This is a time when adult habits are developing,” said Rep. Kim Moser, R-Taylor Mill, chair of the House Health and Family Services Committee, and Miller’s co-sponsor. “This is really a critical time to stop the use.”

Miller said the Senate sponsor of the bill will be Louisville Republican Julie Raque Adams of Louisville, chair of the chamber’s majority caucus.

The bill would raise the excise tax on tobacco products other than cigarettes to 27.5 percent from the current 15 percent, making the same percentage increase that was applied to the cigarette tax, Miller said.

The resulting price increase would discourage teenagers from using e-cigarettes, said Yulie Spade, 18, a recent graduate of Louisville’s Mercy Academy. A classmate, Jenna Ebel, said, “It’s causing an epidemic of nicotine-addicted teens.”

Miller acknowledged opposition from e-cigarette dealers, who argue that teens can order the products online. He said he thought his bill “will hit most of the youth.”

Howard noted that Kentucky’s recent declines in traditional cigarette use have not been as large as those of most other states, and he worries that today’s youth e-cig users will become tomorrow’s cigarette smokers, reversing recent progress and incurring greater health costs, much of which would be paid by taxpayers through the Medicaid program. “There’s certainly a return on investment,” he said.

Asked if his presence at the news conference indicated that Gov. Matt Bevin’s administration supports the bill, Howard said “I vetted this through our secretary” of the Cabinet for Health and Family Services, Adam Meier, whose previous job was Bevin’s deputy chief of staff.