Indiana Cigarette Tax Hike, Legal Marijuana Bids Stalling

(INDIANAPOLIS) – Renewed attempts in Indiana to increase the taxes paid by cigarette smokers and legalize at least some marijuana use face cloudy futures with state lawmakers.

Tom Davies with the Associated Press reports, anti-smoking groups and business leaders are pushing to triple the state’s cigarette tax to nearly $3 a pack, arguing the hike would reduce Indiana’s high smoking rate and discourage youths from starting to smoke. Proposals for similar increases have failed in recent years and Republican legislative leaders say they don’t sense much appetite for it during this year’s legislative session.
Bills are pending to allow medical or recreational marijuana use in Indiana. But it doesn’t seem the GOP-dominated Legislature will challenge Republican Gov. Eric Holcomb’s opposition even as neighboring Michigan, Illinois and Ohio have taken legalization steps.
Here’s a look at some of the issues involved:
Cigarette Tax Push
The drive for adding $2 to the state’s 99.5 cents-per-pack cigarette tax has the backing of the influential Indiana Chamber of Commerce, which sees it as a way of cutting health care costs. Federal figures show Indiana’s nearly 22 percent smoking rate among adults is the seventh highest in the country.
Indiana’s cigarette tax hasn’t been raised since 2007 and is the country’s 38th highest, falling below all neighboring states. The Indiana House backed a $1 per-pack increase as recently as 2016 and 2017, only to see the move fail as the state Senate, then-Gov. Mike Pence and Holcomb all opposed it.
A $2 cigarette tax increase could add $500 million a year to state revenue, according to an analysis of the bill by the nonpartisan Legislative Services Agency. Tax hike advocates maintain it is a step needed to make Indiana a healthier state.
“We know it drives down smoking rates, we know it keeps kids away from tobacco, and we know it raises significant new revenue that we can dedicate to other urgent public health programs like addiction and infant mortality,” said Bryan Hannon, chairman of the Raise It For Health Coalition.
But obstacles remain.
Republican Sen. Travis Holdman of Markle, chairman of the Senate Tax and Fiscal Policy Committee, said he hasn’t sensed any change in the opposition among senators.
GOP Rep. Cindy Kirchhofer of Beech Grove, who is sponsoring the tax-hike bill, said she isn’t sure the House Public Health Committee that she leads will act on it this year.
“We’ve gone on record voting for that a couple times now, so just going to hold off and see what direction we get from the Senate as well,” she said.
Vaping Tax Viable
A separate proposal would add a new state tax for the liquid solutions used in e-cigarettes for vaping.
House Ways and Means Committee Chairman Tim Brown of Crawfordsville, a retired physician who’s sponsoring the proposal, said he believed those liquids should be treated similar to cigarettes because both contain nicotine.
A state report estimates about 300,000 Indiana adults, or 6 percent of the population, use e-cigarettes at least occasionally and projects the tax on vaping liquid could raise at least $4 million a year.
Republican House Speaker Brian Bosma said he believed the e-cigarette tax had the best prospects of winning approval this year.
Marijuana Prospects
Several bills aimed at legalizing small amounts of marijuana or permitting medical marijuana use have been filed by lawmakers ranging from liberal Democratic Sen. Karen Tallian of Portage to libertarian-leaning Republican Rep. Jim Lucas of Seymour.
Both have been outspoken legalization advocates for several years, but Holcomb, Republican legislative leaders and major business groups remain firm against such steps. Holcomb says he’ll remain opposed as long as the federal government classifies marijuana as a Schedule 1 controlled substance, which means it’s not accepted for medical use and has a high potential for abuse.
That’s even though Michigan voters in November approved a ballot initiative legalizing marijuana for recreational use and Illinois’ new governor backs recreational marijuana. Both states already allow medical marijuana and Ohio’s first medical marijuana sales began Wednesday. About two-thirds of states have legalized some form of medical marijuana.
Lucas said Holcomb’s opposition is a “huge obstacle,” but points to the backing of military veterans groups for medical marijuana as a sign of growing public support.
“Even if we don’t do anything, we’re going to be forced to deal with literally thousands of Hoosiers that every intellectually honest person knows are going to go to Michigan or Illinois and buy this,” he said.
Sen. Ed Charbonneau of Valparaiso, chairman of Senate health committee, said he’s uncomfortable with looking at allowing marijuana use while it remains illegal under federal law. He said the prospects of a marijuana legalization bill clearing the General Assembly are thin.
“I would say there are still a significant number of minds that would need to be changed before that could happen,” Charbonneau said.