Raise the tax. Save the kids?

The 66th Legislative Assembly will have their work cut out for them with the primary focus resting on the budget and how the state will be able to meet its funding requirements in order for the government to run. Taxation has never been a popular topic amongst residents, but this session, just like in the last several, will bring the issue of the tobacco tax, which has not been raised in over 25 years,  up to the forefront of discussion.

Posted 1/3/19

By Melissa Anderson

Reports from leading public health groups show North Dakota ranks 3rd nationwide in funding programs that prevent kids from using tobacco and helping smokers quit. On the flip side of that is the fact North Dakota ranks 48th in the nation for tobacco tax, with only $0.44 being charged per pack of cigarettes sold. In 2016, 19.8 percent of adults in North Dakota smoked.

For comparison, Missouri, which has a tax rate of just $0.17 per pack, showed that 22.1 percent of adults smoked in a survey conducted in 2016. Nationally that same year, the rate was approximately 17 percent. Meanwhile in New York state, which is tied for the highest taxation rate of tobacco at $4.25 per pack, the adult smoking rate is just over 14 percent as of 2016, a significant drop from just five years prior when surveys showed that over 30 percent of the population smoked. In that same time frame, the residents of New York City saw a decrease in smoking going from about 16 percent of residents to only 11.5 percent.

“Tobacco issue is the number one preventable cause of disease and death in our state and nation. It carries a high burden, both in detrimental effects to health but also in costs to society,” Steph Welsh, a registered nurse with the Cavalier County Public Health District, stated. “Increasing the price of tobacco products has been shown to be an effective public health policy in both increasing the number of current tobacco users who quit tobacco use and also reducing the number of tobacco users who ever start.”

There are several organizations against the use of tobacco and vaping products in North Dakota and for raising the taxation rate on said products. From Tobacco Free North Dakota to the national American Lung Association in North Dakota, these organizations all put forth tremendous efforts to help the North Dakota Department of Public Health reduce the number of smokers and work to limit the number of children in the state who try tobacco and nicotine products.

The statistics relating to the toll tobacco products have in North Dakota tell a stark story: number of adults who die in North Dakota as a result of their own smoking- approximately 1,000; kids under 18 who become a new daily smoker each year- 200; costs in annual health care caused by smoking- $326 million; annual  amount the tobacco industry spends on marketing in North Dakota- $38.2 million; and yearly tax burden per household from smoking-caused government expenditures- $717.

District 10 Representative Dave Monson had previously tried to address this issue during the last legislative session in 2017. Monson acknowledges that taxes on nicotine products, in general, are very low in this state.  However, raising the tax on products is the sticking point he found too hard to overcome with his fellow legislators.

“It is time to do so, I believe, but I also believe the reason we have not raised the taxes in years past is that the promoters have asked for too large an increase at one time. $2 per pack of cigarettes is too much for most people to accept,” Monson explained. “I wish the promoters of this tax increase would ask for a more reasonable amount and do it more often. Not that a $2 increase isn’t warranted, but I have a hard time multiplying any tax by over 4 times what it is now all in one bite.”

Monson notes that putting such a large increase on a product that bases its sales on consumer addiction could have an undesirable effect. Those that are already addicted will struggle to quit. As a result, families of smokers may struggle as smokers buy cigarettes regardless of the price and cause more kids to not get new shoes, clothes, or meals because the family is short of money.

“I fear we may solve some problems and make others worse when people choose to buy cigarettes despite the price at the cost of their family’s welfare. This is a tough problem, I think,” Monson said.

Another part of the issue is a new trend called “vaping”. Vaping is the act of inhaling and exhaling the aerosol, often referred to as vapor, which is produced by an e-cigarette or similar device. The term is used because e-cigarettes do not produce tobacco smoke but rather an aerosol, often mistaken for water vapor, that actually consists of fine particles.

Vaping, which first hit the market around 2007, was promoted as a means of beating addiction to tobacco. However, evidence is mounting that this claim is not true and, in fact, vaping is just as, if not more, dangerous than traditional tobacco products, especially to America’s youth.

The newest and most popular vaping product is the JUUL, which is a small, sleek device that resembles a computer USB flash drive. Its subtle design  and high potency makes it easy to see why it has become so popular among middle and high school students. Every JUUL product contains a high dose of nicotine, with one pod or flavor cartridge containing about the same amount of nicotine as a whole pack of cigarettes. Add the several enticing flavors  it comes in like crème brûlée, mango and fruit medley and the fact this product accounts for 72 percent of the vaping industry is not surprising.

The Cavalier County Public Health District  has had vaping on its radar for a few years now. Welsh explained that vaping is of concern as the best prevention in tobacco use is to prevent users from ever starting. Vaping devices or Electronic Nicotine Delivery Devices  (ENDS) appeal to youth in their designs and flavoring.

Once youth start using these products they open themselves up to the very same addictive effects of nicotine as traditional tobacco users. The United States Surgeon General lists the addictive effects of nicotine in younger people as being particularly concerning as brain development is still occurring well into an individual’s 20s, and nicotine impacts this development.

“Despite the claims of not being intended for youth, youth are using these products in ever increasing numbers.  In our region 35.8 percent of high schoolers report having tried ENDS, and the numbers are even higher in other parts of our state,” Welsh said.

District 10 Senator Janne Myrdal is very concerned about the increase of vaping among the area’s youth. She, too, has noticed the attractive ads, prices, flavors and creative packaging that would attract young people to the product.

“The nicotine level is extremely high in these products, of course, in order the get young ones hooked on the product.  Follow the money! It is easily and readily available online and elsewhere,” Myrdal said.

Mydal met with numerous health officials leading up to the session and is glad to see them active across District 10 by speaking in schools and making teachers and students aware of the potential health risks. One concern Myrdal shared is the fact that these “tobacco” products are treated as non-tobacco and therefore not taxed equally.

“I am not at all for raising taxes, generally, but would like a debate on this particular issue and at the end of the day cannot see how we can allow the tobacco industry to circumvent the issue here,” Myrdal said. “Are we willing to allow our young people to be the laboratory of experiment now, and then, let’s say, 20 years down the road find that we have lung disease and 100s of millions of dollars in health care needs due to this deceptive product? What do we do now to inform and protect without taking liberty and free choice away? Will we honestly look at the cost long-term for health care but most importantly quality of life?”

District 10 Representative Chuck Damschen, much like Myrdal and Monson, does not believe that raising the tobacco tax by nearly $2 is the right way to combat tobacco and nicotine addiction and curb its use in the state.

“It seems disingenuous to say we allow people to choose to use tobacco but then attempt to tax it so heavily that no one can afford it. People dislike taxes enough without using them as penalty/ punishment,” Damschen said. “Having said that, I do believe vaping falls into the classification of tobacco and should be taxed and regulated as such. It is not a safe alternative to smoking as it is used to deliver nicotine, which is an addictive tobacco product. I would certainly support legislation that would bring that about.”

Vaping is something  Monson also tried to address in the 2017 legislative session. It went no where, Monson explained, mainly because many of his fellow legislators saw it as a tax increase, and many had signed a pledge to not raise taxes.  In his opinion, these products and their usage rate have only gotten worse since he last tried to address the issue in 2017.

“I believe we need to address this again in 2019 and change the classification to a nicotine product, which it is. At the very least, that would tax this like other nicotine products,” Monson stated. “These products need to have the loopholes closed besides taxing them like tobacco.”

While discussion on the topic will bring the issue out into the open, health organizations from every level are all in agreement. From the local to the international, tobacco tax increases are the single most effective policy to reduce tobacco use.