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Assembly debates tobacco, liquor tax hikes despite veto threat
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Updated: Apr. 8, 2011 | 12:34 a.m.
CARSON CITY -- Despite Gov. Brian Sandoval's vow to veto all tax increases, legislators launched debates Tuesday on bills to raise taxes on tobacco and liquor.
The higher "sin taxes" would add at least $125 million a year to state coffers, they contend.
"I believe this state will be devastated if we do not raise revenue," said Assemblywoman Peggy Pierce, D-Las Vegas. "The paramount issue to me is (that) we save this state."
In a morning hearing before the Assembly Taxation Committee, Pierce urged approval of Assembly Bill 333, which would more than double the cigarette tax to $1.70 a pack and raise taxes on cigars, beer, wine and liquor by 25 percent or more.
Nevada's current tax of 80 cents per pack ranks 35th in the nation, compared with a $1.45 average for all states. The tax is $2 in Arizona, $1.70 in Utah and 87 cents in California.
Pierce said Golden State legislators probably will increase the tax by $1 this year.
In the afternoon, the Senate Revenue Committee members heard Senate Bill 386, which would put a $2 per pack tax on cigarettes and double the tax on cigars.
The first hearings on tax increases came on the 58th day of the scheduled 120-day legislative session.
"The governor has been clear; no new taxes," said Sandoval's press secretary, Mary-Sarah Kinner.
And Republican legislators remain united against tax increases.
Without at least some Republican support, Democrats remain a few votes short of the two-thirds majority needed to increase taxes and override a governor's veto.
No action was taken on either bill Tuesday.
Democrats are not likely to challenge Sandoval until near the end of the session, when they have finished closing the state budget and have decided how much more revenue is needed.
Sandoval's proposed $5.8 billion budget is $400 million less than current spending, but the Democrats have contended his budget is as much as $2.5 billion short of the real needs of education, social services and other programs.
Kinner reiterated that Sandoval will not support cigarette tax increases, no matter what they are called.
Another "no new taxes" advocate, former Minnesota Gov. Tim Pawlenty, helped balance his state's budget by imposing a "health impact fee" on cigarettes.
The idea that Nevadans' health would be improved if cigarette taxes were increased was the overriding theme of the testimony in the Tuesday tax hearings.
Beverly May, lobbyist for the Campaign for Tobacco Free Kids, called on senators to approve a higher "health impact fee." May said the higher fee would prevent 21,800 Nevada children from smoking.
"The only reason to oppose it is to keep kids addicted," she said.
Each 10 percent increase in cigarette prices would lead to a 4 percent decrease in smoking, said Jennifer Hadayia, program manager for the Washoe County Health District.
She also noted that 22.2 percent of Nevada adults smoke, ninth highest in the nation, and 10.2 percent of children ages 12 to 17.
"It is a win for health and a beneficial win for the state's deficit," added Tim McCoy, an American Cancer Society representative.
But Assemblyman Ed Goedhart, R-Amargosa Valley, said that if the goal of the legislation is to deter people from unhealthy habits through tax increases, then supporters also should "charge more for hamburgers."
Obesity is the No. 1 health problem, he said.
Cigar store owner Michael Frey testified that he will close four of his six cigar stores in Las Vegas and lay off 30 workers if the tax increases of $1.50 to $3 per premium cigar are approved.
The Assembly bill would raise the tax on cigars from 30 percent to 55 percent of their wholesale price.
That will drive cigar smokers to purchase untaxed cigars over the Internet, Frey said.
Goedhart added that "with a few clicks of my mouse," he found several websites selling cut-rate cigars and cigarettes. He said the plan to collect more money in tobacco taxes might backfire.
Keith Lee, lobbyist for the Distilled Spirits Council, argued that the higher liquor taxes would be paid by consumers, a third of whom earn less than $50,000 a year.
He also contended that the tax would cost 400 Nevadans their jobs.
But Assemblywoman Dina Neal, D-North Las Vegas, said that the "flip side" is that alcohol consumption has a negative effect on families and that distributors try to market to poorer people.
Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3900.
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Just bought 2 cartons at the Indian Smoke Shop on Paiute & Main right in the middle of Las Vegas. They have to comply with federal but not state. I'm done with you blood sucking obese donut eating legislators. You want to make a minority grouping suffer because you don't want to pay taxes yourself. Now, its time to start shopping online for other products. Stuff it.
If raising taxes is tied to health when will these cry babies tax SUGAR at even 1/3 of alcohol which is taxed at over 100% , same with tobacco, IT IS NOW PROVEN the fat lazy disgusting slobs cost as much in health care, lost work etc.
Wanna know how bad sugar really is; the slave trade in America came from sugar. That’s right the slave trade had an excess of slaves available from the sugar industries and looked for new markets; wholla the new America needed cheap reliable labore=slaves
Nevalifornians:
Time to either look for a cash-based business to operate or move to a right-leaning, right-to-work state like Florida. We have the lowest # of state government workers per capita in the nation, little union parasite activity, no state income tax, and our governor is chopping government spending like crazy. This is called responsible government. I'm a small business owner who is grateful that I live in a state run by conservatives. Nevada would have been a nice state 20-30 years ago, but there are too many illegals, unions, and Californian lefties in NEV now. I'll still visit, but Nevada is doomed to repeat the mistakes of California (rampant illegal immigration, unions, unsustainable government payrolls, etc.). I hope that Nevada can return to its conservative roots in governing, but I'm not optimistic.
I would support a 50% tax increase on Assembly member's gross income.
Subjects have no need of tobacco, strong spirits and other notions. Good subjects should find ample worldly pleasure in their work work and the privilege to serve.
Democrats vow this. Republicans vow that. Nothing gets done. This session could last forever. Who gets the shaft? The citizens of Nevada.
It is politicians/government/big business vs. citizens. We pay for their lifestyle. Our government would rather produce soldiers to fight their oil wars then to spend money to educate our children. $663 BILLION spent last year on Defense, 4 times more then any other country.
Thank you T.O. - The common man has no chance. Dem or Rep.
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Oh there's a new tax. It's taking money away from state workers to balance the budget. That's the new tax. So much for the shared sacrifice. Anybody who thinks either side cares about them is an idiot.
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