A proposed $1-per-pack increase in the state cigarette tax is now in play at the Legislature, making it the latest in a string of proposed tax increases floated by Gov. David Ige and lawmakers to raise money for the state or get people to adopt healthier lifestyles.
On Monday, the Senate Health Committee chimed in by advancing a proposal to increase the state cigarette tax by an unspecified amount.
The original draft of Senate Bill 138 would have increased the state tax from 16 cents per cigarette to 21 cents per cigarette, which would add $1 to the cost of a pack. However, Health Committee Chairman Jarrett Keohokalole amended the measure to leave the specific amount of the tax increase blank.
Leaving amounts blank in bills is a common practice at the Legislature, and lawmakers will specify the exact size of the tax increase later if the measure continues to advance.
The state now collects about $110 million in cigarette taxes per year, with most of that money deposited into the state general treasury. The state Tax Department estimates SB 138 as originally written would raise an extra $32 million per year.
The state Department of Health supported the tax increase plan, describing it as “a strategic measure to protect the health of Hawaii’s citizens, particularly youth, from the harmful effects of tobacco initiation, use, and addiction.”
Tobacco use is responsible for the deaths of 1,400 people per year in Hawaii, according to the department.
Also backing the measure were the Hawaii Public Health Institute, the American Heart Association of Hawaii, Hawaii Medical Association and the Hawaii Pacific American Cancer Society Cancer Action Network.
Opposing the bill was Tina Yamaki, president of the Retail Merchants of Hawaii, who warned that retailers are already struggling to survive in the pandemic.
“We see almost daily stores closing around our neighborhoods due to the affects this pandemic is having on our economy,” Yamaki said in written testimony. “Raising the tobacco tax and permit fee will truly hurt locally owned businesses, especially the small locally owned businesses and may potentially force some of them to close.”
The measure now goes to the Senate Ways and Means Committee for further consideration.
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