Biennial Budget

Appropriations Committee removes flavored tobacco ban from final budget agreement

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A measure that would have compensated for the expected loss in revenue from banning flavored tobacco was not included in the budget bill recently approved by the Appropriations and Financial Affairs Committee.

The legislature has not yet voted on L.D. 1550, which, as originally proposed, would ban the sale of flavored tobacco products in Maine. Tobacco sellers who violate the law would face a civil penalty of $1,000 for a first time offense and a fine of $5,000 for subsequent offenses. 

An amendment proposed by the minority of the Committee on Health and Human Services would strike the bill and ban only the sale of flavored vaping liquids. First time violators of the law would be fined $100 and would face a fine of $1,500 for subsequent offenses.

According to the fiscal note attached to the bill, it would reduce revenue to the General Fund by $15,234,363 in fiscal year 2021-2022 and $22,886,878 in fiscal year 2022-2023 should it become law. Additionally, it would reduce Local Government Fund revenue by $100,027 in fiscal year 2021-22 and $150,697 in fiscal year 2022-23.

However, the failure to include a measure to replace revenue lost by banning the sale of flavored tobacco products in the budget may mean L.D. 1550 is carried over and does not receive a vote this legislative session.

L.D. 1550 is not the only bill regulating tobacco currently being considered by the legislature. L.D. 1423 was referred back to the Committee on Taxation on June 17.

The bill’s aim is to reduce smoking by raising the tax on tobacco products and directing funding to anti-smoking programs run by the state.

If passed, L.D. 1423 would double the state tax on a packet of cigarettes. Currently, a 20 pack of cigarettes is taxed $2.00. This would increase to $4.00 on November 1 if L.D. 1423 becomes law. Because the amount of tax collected on other tobacco products is determined by the tax on cigarettes, the bill would effectively raise taxes on other tobacco products by the same percent.

It would set the minimum level of future funding for the Department of Health and Human Services’ Tobacco Prevention and Control Program at either the amount of revenue the state collects from the sale of tobacco products, plus available funds in the Fund for a Healthy Maine, or the amount of funding the federal Centers for Disease Control and Prevention (CDC) recommends for Maine, whichever is less.

L.D. 1423 also provides $7 million annually for fiscal years 2021-2022 and 2022-2023 to the Maine CDC to attain the level of funding recommended by the federal CDC. That money is to be put towards tobacco use, prevention and cessation.

The bill provides an additional $10 million annually for the 2022-2023 biennium for the CDC to research, identify and reduce disparities in healthcare outcomes based on race, ethnicity, sexual orientation, gender identification, income, educational attainment or geographic location.

The Taxation Committee last held a work session on L.D. 1423 on May 26.

About Katherine Revello

Katherine Revello is a reporter for The Maine Wire. She has degrees in journalism and political science from the University of Maine. Her writing has appeared in Reason, The Washington Examiner, and various other publications. Got news tips? Contact Katherine at krevello@mainepolicy.org.

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