Health committee holds hearing on bill to increase tobacco tax, impose flavor ban

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The Maine Legislature’s Committee on Health and Human Services (HHS) convened on February 9 to hold public hearings on two similar bills that would replace the Fund for a Healthy Maine with the Trust for a Healthy Maine. Public testimony on one of those bills, LD 1693, largely focused on the ban on the sale of flavored tobacco products included in the legislation.

Both LD 1523 and LD 1693 would redirect revenue from the Fund for a Healthy Maine, which was created by the legislature in 1999 to receive money the state received from the Tobacco Master Settlement Agreement (MSA), to a newly-created trust. 

The trust would be governed by a board comprised of 15 trustees. Members would include the director of the Maine Centers for Disease Control and Prevention (CDC) and appointees with various qualifications made by the governor. The speaker of the House of Representatives and the president of the Senate, as well as minority party leaders from both legislative chambers, would also submit names for consideration for nomination by the governor.

Trustees would serve for three-year terms and could serve for no more than three consecutive terms. 

The trust would receive funds from the MSA as well as other settlement funds. Board members’ duties include administering the trust and its fund, promoting the “visibility and understanding of public health issues among children and adults,” participating in the development and promotion of state health plans developed by the Maine CDC and the Department of Health and Human Services (DHHS), and promoting “multilevel planning and coordination that includes state, district, community and municipal decision-making and advisory boards.”

The board would be required to develop and approve a funding and disbursement plan for settlement funds by December 31, 2022 and every year thereafter. It would have to hold at least one public hearing and solicit input from interested parties involved in public health before developing a funding plan. 

LD 1523 also includes various requirements for the level of disbursements that must be included in the spending plan. Beginning in fiscal year 2022-2023, the fund must disburse at least 0.7 of the level recommended by the US CDC to the Maine CDC. Funds must also be disbursed to the Department of the Attorney General and to several other funds created by the bill, including a health equity and health improvement account, internal stabilization account and internal flexible account.

LD 1693 contains an identical provision as LD 1523 and would also create the Trust for a Healthy Maine. Additionally, the bill would create the Office of Health Equity. The office would advise the DHHS commissioner, the Governor’s Office of Policy Innovation and the Future, other agencies, as well as the governor and the legislature on health systems, policies and practices.

The office would also create a state health equity plan designed to “create systems, policies and practices to achieve health equity” and “establish policies to ensure all state contractors and vendors have a health equity plan in place as a criteria for funding.”

The bill would require the office to produce an annual report card for health programs and services, as well as “outcomes and social determinants of health equity.”

Another provision within LD 1693 would ban the sale and distribution of flavored tobacco products. Violations of the ban would result in a fine of $1,000 for a first offense. Subsequent violations would result in a $5,000 fine. 

The bill would also double the tax on cigarettes, from a rate of 100 mills to 200 mills per cigarette, and would allot half the revenue from the tax to the Fund for a Healthy Maine.

During the public hearing on LD 1523, the HHS committee heard testimony in favor of the bill from nearly two dozen individuals.

Rep. Rebecca Millett (D-Cape Elizabeth), the bill’s sponsor, provided an overview of the bill and intentions behind the legislation.

Millett said she felt “sadness and anger” about the “epidemic proportions” of vaping she said youth in Maine schools and communities have “fallen prey to.”

“The reality is, the tobacco industry has been stacking the deck against Maine kids for decades with predatory marketing campaigns, product promotions, and the promise of fitting in, being cool, and feeling a relief from stress and anxiety,” Millett said in her testimony submitted to the committee.

Millett also said falling revenues from the MSA are threatening the solvency of the Fund for a Healthy Maine. According to Millett, LD 1523 and the Trust for a Healthy Maine would address this problem.

“By restructuring the tobacco settlement in this biennium, there is no immediate threat to programs, nothing to bargain away, and no fiscal impact. With a simple transfer of funds and the creation of a long-term public health trust, we can stabilize MaineCare, HeadStart, child care, and Drugs for the Elderly programs in the General Fund; automate the full funding of Maine’s tobacco prevention and treatment program; create an ongoing revenue stream to address health disparities and support community-based infrastructure; and allow for longer-range planning and investing of settlement dollars in alignment with the highest priorities of our state health plan,” Millett said. 

Millett’s testimony also offered a sponsor’s amendment to the bill that would resolve the Fund for A Healthy Maine’s structural deficit. The amendment was not made available to the public before publication. 

A number of medical and public health professionals also spoke in favor of the bill. 

Rebecca Boulos of the Maine Public Health Association testified her organization, the state’s largest association of public health professionals, supports the bill because it would provide consistent funding for public health programs, invests annually in health equity and aligns funding with a state health plan.

Representatives of the American Heart Association, Maine Children’s Alliance, Maine Oral Health Coalition, Partnership for Children’s Oral Health and the Maine Osteopathic Association also spoke in favor of the bill.

Jeff Austin, of the Maine Hospital Association, and Sarah Calder, of Maine Health, were neither for nor against the bill but expressed concerns about the legislation in their testimony.

Austin noted the bill would prohibit the Trust for a Healthy Maine’s board from using funds for medical care. According to Austin’s testimony, around $30 million per year is spent by the Fund for a Healthy Maine on Medicaid programs. The Trust For a Healthy Maine’s ban on using funds for medical care would result in a $30 million hole in the Medicaid budget and $90 million when accounting for federal matching funds, according to Austin.

Calder also expressed similar concerns in her testimony and noted that other states that have put settlement dollars into external trust funds have since defunded them entirely.

The committee’s public hearing on LD 1693 focused primarily on the provision within the bill that would ban the sale and distribution of flavored tobacco products.

Rep. Rachel Talbot Ross (D-Portland), the sponsor of LD 1693, was not present at the hearing, but Sen. Ben Chipman (D-Cumberland) read testimony on her behalf.

Chipman, speaking for Talbot Ross, said “the tobacco industry has a long history of creating and feeding disparities through their targeting of youth and young adults in marginalized communities.” The goal of LD 1693, said Chipman, is to go “beyond tobacco to build a more comprehensive policy framework for achieving health equity.”

Chipman said the bill accomplishes this through its five major components. These include restructuring the tobacco settlement, building a best practice policy framework for tobacco prevention and treatment, beginning to rebuild Maine’s obesity program, adding definitions to state statute that name the components of the equity system and building “scaffolding” for achieving health equity in Maine.

Talbot Ross offered a sponsor’s amendment to the bill that would create an Obesity Advisory Council. The amendment also renamed the Office of Health Equity to the Office of Population Health Equity and made several changes to funding allocations and appropriations.

Additionally, approximately a dozen other people testified in favor of LD 1693. Representatives of the American Heart Association and Maine Public Health Association spoke in favor of the bill.

The committee also heard testimony from several members of the public who documented their personal experiences with tobacco addiction and flavored vaping products and who supported banning their sale.

Over two dozen people testified against LD 1693, including owners of tobacco and vape shops concerned about how passage of the bill would affect their businesses.

“People will not stop smoking and/or chewing flavored tobacco products, they will find them elsewhere. Since the ban in Massachusetts, sales of flavored tobacco have increased in adjacent states such as New Hampshire and Rhode Island,” wrote Sarah Boutilier of The Island Employee Cooperative, Inc.

Representatives of several think tanks and tobacco harm reduction groups also testified against LD 1693.

“Because menthol cigarettes are overwhelmingly the choice of Black smokers, prohibition will necessarily lead to a concentration of the illicit tobacco market in Black communities. The American Civil Liberties Union and other civil rights groups warn prohibition could disproportionately impact people of color, trigger criminal penalties, and prioritize criminalization over public health and harm reduction,” wrote Guy Bentley of the Reason Foundation.

Nick Murray, policy analyst for the Maine Policy Institute, noted that Maine-targeted advertising campaigns which lobby for the passage of bills that would ban flavored tobacco products are funded by out-of-state dollars.

“In November 1988, California voters passed Proposition 99, which added a 25-cent tax to each pack of cigarettes sold in the state. A portion of the tax funds the California Tobacco Control Program (CTCP) within the California Department of Health. One of the projects of the program is ‘Flavors Hook Kids,’ the main buyer of advertising campaigns targeted to Maine and other states to lobby for policies just like those proposed in LD 1693,” Murray said. 

“Many Mainers do not know this, so I hope the committee is aware. I wonder if some Mainers would think differently about this idea if they knew that it was planted by a California state agency, funded by California tax dollars,” he added.

LD 1693 is not the only bill currently before the legislature looking to ban the sale of flavored tobacco and increase the state tobacco tax.

LD 1423, a bill that would raise the tobacco tax, was carried over into the second session of the 130th Legislature from the first session. The bill would double the cigarette tax, from $2 per pack of 20 cigarettes to $4 per pack of 20 cigarettes, and would provide funding for tobacco use prevention programs to Maine DHHS and CDC. It would also require funding for the DHHS’ Tobacco Prevention and Control Program to match, at minimum, the revenue collected by the sale of all tobacco products in the state plus the available funds in the Fund for a Healthy Maine.

The bill is currently before the Committee on Taxation, which voted it “ought to pass as amended” on January 27. The amendment adopted by the committee would prevent the discount licensed tobacco distributors receive from cigarette stamp purchases from being increased by an increase in the amount of the cigarette tax.

LD 1550, a bill that would ban the sale of flavored tobacco products in the state, currently sits in unfinished business in the House of Representatives.

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