State tobacco tax increase comes Monday
WORTHINGTON -- Starting Monday, users of tobacco products will fork out more dough for their addiction.
That's the day implementation of Minnesota's newest tax -- aimed at reducing cigarette smoking, counteracting tobacco marketing campaigns and improving the overall health of its citizens -- begins. The tobacco tax increase passed by the legislature this spring boosts Minnesota's tobacco tax from 28th to the sixth-highest in the nation, according to Paula Bloemendaal, tobacco control and policy coordinator for Southwest Health and Human Services.
At $2.83 per pack, Bloemendaal said the tax includes an already-implemented health impact fee of 75 cents. In addition, smokers will still need to pay Minnesota sales tax on their tobacco products -- averaging about 35 cents per pack -- as well as the federal tobacco tax of $1.01 per pack.
All of those taxes combined now account for approximately half the price of a pack of cigarettes. Starting Monday, the cheapest brands of cigarettes in the state will cost nearly $6.50 per pack, with most name brands in the $7 to $8 range.
Still, Bloemendaal said other states garner a higher price for a pack of cigarettes. New York, for example, has the highest asking price at more than $10 per pack.
While Minnesota will have the highest tax on tobacco products of its neighbors starting Monday, Bloemendaal said the state previously had one of the lower taxes at $1.23 per pack of cigarettes. In Wisconsin, cigarettes are taxed at $2.52 per pack; Iowa garners $1.36 in tobacco tax; South Dakota charges $1.53; and North Dakota, by far the lowest in the region, collects just 44 cents in tax on cigarettes.
"We were lower than Wisconsin, Iowa and South Dakota," Bloemendaal said. "Now, we've made a really positive step for improving Minnesota health."
With the tobacco tax increase come stepped-up efforts to encourage tobacco users to quit. ClearWay Minnesota's QuitPlan, promoted through brochures already in place at local tobacco retailers, pharmacies and medical facilities, offers a 24-hour, toll-free quit line as well as products like gums, lozenges and patches to help smokers kick the habit.
"We know smoking is very expensive," Bloemendaal said. "Quitting is free."
Taking that message to tobacco users is an important step, but equally as important is encouraging youths not to begin tobacco use in the first place.
In addition to the statewide tobacco sales tax increase, legislators this year also closed the little cigar loophole (resulting in a tax on candy- and fruit-flavored cigarettes) and increased taxes for cigarillos (like Swisher Sweets), sticks, orbs, strips and chewing tobacco.
Moist snuff -- such as Grizzly, which Bloemendaal said is the most popular brand among youths ages 12 to 17 -- will also carry a new minimum tax.
"We know that the tax increase is going to save lives and save kids, and it's going to help all of our health care costs," she added. "We all pay the price for tobacco; that's $554 every year by every member of the family in increased healthcare costs due to smoking.
"We know there's no other more effective means to keep our kids from starting than raising the price."
Already, Bloemendaal has heard of people planning to quit using tobacco products because of the increased tax.
Retailers: Sales normal
Since 1999, Nobles County's number of retailers licensed to sell tobacco products has dropped by 11, to 34 licenses today. In the last 13 years, only two new businesses have requested a tobacco license in the county, including Worthington's Dollar General, which was licensed about a year ago.
Karen, the manager of Dollar General who requested that her last name not be in print, said she hasn't noticed any difference in tobacco sales in recent weeks, such as customers stockpiling product before the tax increase takes effect on Monday.
The same was noted by Hy-Vee Gas manager Dan Van Hove.
"Sales are about average," he said, adding that he hasn't heard any complaints from customers about the impending price increase for tobacco products.
"Some have stated they'll quit smoking, and some have stated they'll continue to buy cigarettes," he said.
Both Hy-Vee Gas and Dollar General said customers tend to buy individual packs of cigarettes rather than cartons.
Bloemendaal said there is a one-time floor stocks tax that will be collected from retailers based on the amount of tobacco products still on their store shelves as of Monday. The tax was implemented to prevent retailers from stockpiling tobacco products.
Of the tax money collected from the floor stocks tax, an estimated $25 million will be used to make up for financing shortfalls for the new Minnesota Vikings stadium. As for the ongoing tobacco sales tax, Bloemendaal said it would go into the state's general fund.
"While we would like to see it go toward health and prevention, we know that a tax increase is going to save lives and prevent kids from starting (tobacco use)," she said.
Bloemendaal, who was instrumental in helping Rock County develop the strongest tobacco ordinance in the state -- it also takes effect Monday -- has now shifted her focus to Nobles County and working with a local coalition to rewrite and strengthen the county's tobacco ordinance.
"We know that kids are very price-sensitive and sensitive to marketing from the industry for fruit and candy-flavored products," Bloemendaal said. "It's about putting the regulations that really need to be there on the deadliest product on earth. Ultimately, it's up to the commission ... to do what's right for Nobles County."
Cheryl Avenel-Navara, a member of the Nobles County Community Health Improvement Program and tobacco ordinance committee member, said she'd like to see the new ordinance fast-tracked and signed by Aug. 1.
"The entire state of Minnesota needs to update ordinances because of changes in language and law," Avenel-Navara said. "In Nobles County, some of the (changes) have to be done because of changes in law, and some of them have to be done because the tobacco industry is always one step ahead ... in terms of marketing."
While the new ordinance would further define tobacco products, Avenel-Navara said it would help "keep ahead of the curve in a lot of ways." She'd like to see Nobles County follow Rock County's lead and enact an ordinance that is equally as strong.
"We would like to have the identical ordinance," she said. "We want the (county) commissioners to do what is best for kids and vulnerable adults. Will it be hard for commissioners? Sure."
One of the measures Avenel-Navara will push for in the new tobacco ordinance is a limit on the number of tobacco licenses available to retailers in Nobles County.
"We would like the number of licensed retailers decreased, obviously, but we're open to compromise," she said. "If that means settling on the number that's there and not allowing additional licenses, we could accept that compromise.
"There are 18 (licensed tobacco retailers) in Worthington," she added. "If Worthington would be willing to stay at 18, that would be wonderful."
Avenel-Navara is hopeful a new tobacco ordinance would address some of the tobacco products companies try to market to kids, from flavored e-cigarettes to colorful tins of chewing tobacco and candy cigarettes.
"We want the ordinance to address all of these issues -- from keeping little kids' hands from these products," she said. "Ultimately, we want them not to start smoking."
Nobles County Administrator Tom Johnson said commissioners will not take up the tobacco ordinance at its next meeting, slated for Tuesday. Instead, because the ordinance would have the most impact on the city of Worthington, he wants to have discussions with city officials.
"Most of the burden falls there," Johnson said, adding that he's not sure if there will be a county tobacco ordinance.
Daily Globe Reporter Julie Buntjer may be reached at 376-7330.