Earlier today, the Utah House Health and Human Services Committee passed a $1.00 per pack hike on cigarettes. If HB 196 continues moving through the legislature and gets a signature from Gov. Herbert, it will bring a price tag of $45.5 million to the taxpayers of the state over the next two years. This tax increase passed out of committee 5 to 2, Rep. Sandstrom (R-HD58), a Taxpayer Protection Pledge signer voted against it.
Rep. Paul Ray (R-HD13) who is pushing the bill is using the rationale that it will help pay for medical costs that the state incurs from smokers and that it will reduce smoking. How much of the revenue from cigarettes from cigarette taxes actually goes to healthcare? The assumption is that smokers cost society money. In an April 8, 2009 article in USA Today, "Do smokers cost society money?," the answer to the question seems to be "no." In the article it is mentioned that economist Kip Viscusi actually found a net cost savings of 32 cents per pack (to read his study, click here).
The Utah government has increased total spending by 41% over the past two years; this constitutes a spending problem, not a lack of revenue. If you are a Utah taxpayer and would like to express your disapproval of tax increases, click here.