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Measure 4 would hit smokers with higher tax

By Staff | Nov 4, 2016

The North Dakota Tobacco Tax Increase Initiative, also known as Initiated Statutory Measure 4, will be included on the November 8 ballot.

Measure 4 was designed to increase the tax on cigarettes from 44 cents per pack to $2.20 per pack and to increase the tax on all other tobacco products from 28 percent of the wholesale purchase price to 56 percent of the wholesale price. The definition of “tobacco products” would expand to include liquid nicotine and electronic inhalation devices.

Measure 4 would create a veterans’ tobacco trust fund, which would be funded by half of the new revenues. The remaining revenues would be dedicated to a community health trust fund for a comprehensive behavioral health plan, county-level health services, and chronic illness prevention and control programs. No revenue from the increase would be allocated to tobacco prevention or cessation programs.

As of July 2016, only three states had lower tobacco tax rates than North Dakota’s 44 cents per pack. Georgia’s current tobacco tax rate is 37 cents, Virginia’s is 30 cents and Missouri’s is 17 cents.

“North Dakota has one of the lowest tax rates on tobacco. The argument is that other states are [raising tax rates], but that’s not the argument I want to hear,” said Steve Dockter, CEO of Envision. “From 44 cents to $2.20 is a huge step to take at one time.”

Envision, a locally owned cooperative, has locations in Rugby, Towner, Wolford and Leeds. Envision offers services in agronomy, grain handling, energy and feed. Envision is a retail marketer of cigarettes and tobacco products in all of its Cenex fuel stations and is against raising tax rates on tobacco through Measure 4.

“This wasn’t solely a personal decision,” Dockter said. “It was a unanimous decision amongst all of our board members. I want to make it clear that we are not promoting smoking or tobacco usage, to either minors or adults. We are promoting fair taxation and clearer language on how the revenue is used.”

Dockter said that his main problem with Measure 4 is in its language. The measure proposes that 50 percent of revenues would be dedicated to a veterans’ trust fund and the remaining funds will go towards other health services, but Dockter does not find a clear explanation as to exactly how those revenues will be used.

“If they’re going to propose taxation, they need to be precise with language,” Dockter said. “There are too many open spaces in how it is written currently, making it unclear where the money is supposed to go. It says revenues will be going to veterans, but it doesn’t say how.”

Dockter also finds concern with who the measure effects. “It’s targeting too few people and is placing a financial burden on those people. Taxation should never be designed as a way to beat people into a decision that other people want them to make. In this case, it’s quitting smoking. That’s a personal choice. The government has overstepped in many ways, and this is just another way.”

With North Dakota being one of the leading states in allocating funding towards tobacco prevention programs, Dockter sees no reason for the new taxation.

Allen McKay, Lake Region District Health Unit Administrator, is in favor of Measure 4’s increased taxation on tobacco products. To him, it’s about the health concerns that come with using tobacco and the rising usage among young adults.

“One of the major reasons we look at increasing the tax on cigarettes is that you reduce kids’ use of cigarettes,” McKay said. “We don’t want kids getting started. If they can’t afford them, they don’t get started. If they don’t get started, they don’t get hooked. It also reduces current usage because people don’t want to pay and end up quitting.”

A total of 6,600 current adult smokers are projected to quit smoking as a result of the tobacco tax increase, and the measure is estimated to decrease youth initiation rates by 20 percent. As for long-term health care costs, the state of North Dakota is projected to save nearly $246.57 million from reductions in adult and youth tobacco use, according to Measure 4 advocates.

“People tend to forget that Measure 4 was pushed by North Dakotans, overwhelmingly. Now, people are saying that nobody knows where funding is going,” McKay said. ” It’s going towards veterans funding, chronic disease, local public health initiatives including immunizations and Women’s Way, and behavioral and comprehensive health.”

McKay explained that in the state of North Dakota, there is a lack of both money and services dedicated to behavioral health programs. “We need money for programs like these, which comes from tax revenues,” he said.

McKay said voters should remember that this is not a general tax but a tax on tobacco users.

“We’re the public health unit. We’re here to help public health and improve public health along the way. That’s what Measure 4 is all about,” McKay said. “We hope they vote yes.”

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