[T]hough state lawmakers have not yet finished their work for 2018, it seems clear that controversial proposals to tax opioids and e-cigarettes will advance no further this year.
Both levies were in a bill, H.922, that faltered at the end of the regular 2018 session. That measure was reintroduced as H.2 for the ongoing special session, but it has not moved out of committee.
With lawmakers and Gov. Phil Scott locked in a battle over the fiscal year 2019 budget, Senate President Pro Tem Tim Ashe said there’s little chance of any further debate on the opioid assessment, the e-cigarette tax or any other initiative in H.2, which is a miscellaneous tax bill.
“It’ll probably wait until next year,” Ashe said Thursday.
When this year’s regular legislative session ended, both the House and Senate had agreed on language in H.922 that enacted a 46 percent tax on e-cigarettes – devices that can deliver nicotine via heated liquid, without the use of tobacco.
The levy would have generated an estimated $350,000 annually, money that was earmarked to expand the Down Payment Assistance program for first-time home buyers and the downtown and village center tax credit.
The state already maintains a variety of levies on tobacco products, including a $3.08-per-pack tax on cigarettes. Vermont also regulates the use of e-cigarettes via a 2016 law that prohibited using the devices in all settings where smoking is banned, with the exception of “vaping lounges.”
But taxing e-cigarettes has been a tougher proposition. A 92 percent tax failed to get through the Legislature two years ago, and the tax in H.922 this year – though it was half the rate proposed in 2016 – generated opposition from e-cigarette advocacy groups.
There is tension between those who say e-cigarettes are a safer product for those trying to quit smoking and those who worry that young people are using the devices as a gateway to start smoking.
“You’ve got the two trends that you’re trying to contend with,” Ashe said.
However, Ashe said he didn’t hear as much opposition to the tax as he had in previous years. “This time, it was a little bit more subdued,” he said.
That was not the case with the opioid tax. Introduced relatively late in the session, the idea was to collect money from manufacturers of prescription painkillers in order to generate revenues for addiction prevention, treatment and recovery programs.
Officials estimated that the levy could bring in more than $3 million.
The concept is relatively new, and it generated attention nationwide. Lawmakers heard opposition from national pharmaceutical trade groups and from the Washington-based Americans for Tax Reform, led by the famed anti-tax crusader Grover Norquist.
“I got a letter from Grover Norquist – I kid you not – asking us not to do it because it would hurt consumers,” Ashe said. “What a bunch of rubbish.”
There was opposition a lot closer to home, too. Some said the tax – later labeled an “assessment” due to the proposed collection method – was poorly researched and would expose the state to lawsuits, and the Scott administration opposed the measure.
The Senate approved H.922 on a 22-5 roll-call vote on May 11, one day before the regular legislative session ended.
But the bill didn’t come up for a vote in the House the next day. House Minority Leader Don Turner, R-Milton, said his caucus did not agree to suspend legislative rules to allow H.922 to be considered “due to the increased taxes in the bill.”
On Thursday, Ashe also acknowledged that House members did not have time to fully vet the opioid assessment. It had not been included in the version of the bill the House approved in March.
Even if the bill had passed, Scott likely would have vetoed it. And that will be the case again in 2019 if Scott is re-elected.
However, Ashe and two other key senators say they still believe the opioid tax idea has merit and could come up next year.
Sen. Jane Kitchel, D-Caledonia and chair of the Senate Appropriations Committee, said the tax “would bolster our efforts with treatment and prevention.”
“We’re spending about $100 million … as a result of addiction,” Kitchel said.
Added Sen. Ann Cummings, D-Washington and Senate Finance Committee chair: “We think the folks making billions of dollars should help pay for that.”
