LEARNING ABOUT MEASURE 108: VAPE TAXES

On Nov. 3, Oregon residents will have the opportunity to vote on a measure that would increase taxes on nicotine products, including those for vaping. Tax revenue from this measure would be directed toward funding medical assistance programs in the state.

Measure 108, the Tobacco and E-Cigarette Tax Increase for Health Programs Measure, proposes a dime tax increase on individual cigarettes, from 6.65 cents to 16.65 cents, equating to a raise from $1.33 to $3.33 per pack. The measure would also impose a tax of 65% of the wholesale price on the sale of inhalant delivery systems (e-cigarettes) and cigars, with an increase to the maximum tax per cigar from $0.50 to $1.00.

The increase in revenue created by this measure is forecast to be approximately $160 million a year, according to a fiscal impact statement released by the Oregon Legislative Revenue Office (https://olis.leg.state.or.us/liz/2019R1/Downloads/MeasureAnalysisDocument/51935). This revenue would first be applied to enforcing the tax. Of the remainder, 90% would be allocated to the Oregon Health Plan and “other medical assistance programs,” and 10% would be dedicated to tobacco use prevention and cessation programs, especially among tribal health providers and programs targeting children.

Proponents of the measure – approved by the Oregon Legislature in 2019 and referred to voters – claim that the funding is necessary for the expansion of Medicaid coverage in the state and suggest that it will greatly act to encourage smoking cessation.

Opponents suggest that the measure is self-defeating: If smokers quit purchasing tobacco products, then the funding for Medicaid goes away. They also warn that smokers may turn to the black market for their purchases to avoid increasing prices, thus generating no tax revenue at all.

Oregon currently has the lowest tax on cigarettes on the West Coast, at $1.33 per pack, and ranks 32nd in the nation overall. California’s tax is $2.87 per pack while Washington’s is $3.03.