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Hindsight, MN 2020: Cigarette Tax Increase Succeeds in Reducing Tobacco Usage

By Jeff Van Wychen, Fellow and Director of Tax Policy & Analysis
From Hindsight, Minnesota 2020 Blog

One of the reasons for increasing Minnesota’s cigarette tax was to incentivize current smokers to “kick the habit.” It appears that the cigarette tax increase is already having the desired effect. According to information from ClearWay Minnesota, “Quit attempts by Minnesotans have increased dramatically since the cigarette tax increased by $1.60 per pack on July 1, 2013. During the first two weeks of July 2013, QUITPLAN® Services received 256 percent more calls than in the first two weeks in July 2012, and saw a 289 percent increase in visits to quitplan.com.”

Long term, ClearWay projects that the tobacco tax increase enacted in 2013 will lead to a 47,800 reduction in the number of children who become addicted, a 16 percent reduction in youth smoking rates, incentivize 36,600 Minnesotans to quit smoking, and a 25,700 reduction in premature smoking related deaths.

A reduction in tobacco usage was incorporated into projections of how much revenue the 2013 tobacco tax increase would generate. As a result, the tobacco tax increase is generating about as much new revenue as it was expected to. According the most recent economic update from Minnesota Management & Budget, net tobacco tax collections are within three percent of their projected target since the tax increase took effect (through March 2014).

It is true that tobacco taxes are regressive, falling most heavily on low income households. However, the long-term health effects of the tobacco tax increase outweigh concerns over regressivity. After all, the positive health effects of the tobacco tax increase will likely be concentrated among low income smokers, since they are most sensitive to cigarette price increases and will be most incentivized to quit as a result. There are many ways we can change the tax code to help low income households; giving them access to cheap carcinogens should not be one of them.

http://www.mn2020hindsight.org/view/cigarette-tax-increase-succeeds-in-reducing-tobacco-usage

Moorhead leaders discuss licensing e-cigarette vendors, abolishing lengthy tobacco sampling

By: Erik Burgess, INFORUM

MOORHEAD – Hoping to curb sales to minors, the city could soon require e-cigarette vendors to be licensed and subjected to compliance checks like traditional tobacco sellers.

State law in Minnesota – and local ordinances in West Fargo and Fargo – prevents the sale of e-cigarettes to minors.

But because Moorhead doesn’t license e-cigarette vendors, there’s no registry of businesses that sell them and no one doing compliance checks to make sure e-cigarettes aren’t being sold to minors, Keely Ihry, of Clay County Public Health, told City Council members Monday.

New state e-cigarette laws give statutory authority to cities to license and regulate e-cigarettes, which Ihry argued are being targeted to and becoming more popular among teens.

Ihry passed around e-cigarette, or “vape pen,” samples to council members Monday, noting the colorful packaging and the myriad flavors like Skittles, bacon and strawberry banana.

“To subject any of our youth to an addictive substance such as nicotine, with the additional pleasures of scent to draw them in, it’s just unbelievable,” said Councilwoman Nancy Otto, who was the most vocal on wanting to license e-cigarette vendors.

“Otherwise, it’s basically a free-for-all,” Otto said. “We’ve got nobody that is going in to check these facilities.”

Council members Mike Hulett and Brenda Elmer said they would support licensing e-cigarette vendors in Moorhead. City Manager Michael Redlinger said the council could vote on it at the end of the month or in June.

Police Chief David Ebinger also urged the council on Monday to consider abolishing what he called a “deceptive sampling practice” in the tobacco industry.

Some tobacco vendors are taking advantage of a broadly worded state law that allows “sampling” of cigars, tobacco or hookah indoors, he said. Instead of offering a taste or two, some shops are allowing lengthy, hour-long smokes.

That’s not the spirit of the sampling provision, Ebinger said,

“You don’t sit down … and smoke an entire cigar or two of them in a bar, and call it ‘sampling,’ ” he said.

The chief proposed that Moorhead set up an ordinance that would prevent lengthy tobacco sampling and only allow limited sampling if a customer was looking to make a “bona fide purchase” of a product, like a hookah.

Hookahs On Main, 815 Main Ave., is the only hookah shop in Moorhead that allows such lengthy sampling, said City Clerk Michelle French, but she and Ebinger said others have inquired about setting up similar businesses.

If the council decides to pass a more restrictive sampling law, Hookahs on Main would be grandfathered in, Ebinger said. Still, the law would prevent more of these shops from setting up in Moorhead, he said.

“It’s a public health issue,” Ebinger said, arguing that hookah tobacco can be just as dangerous as standard cigarettes.

Redlinger said law enforcement also sometimes has disturbance and neighborhood issues with hookah shops.

The City Council denied a tobacco license renewal in February for the former owner of Hookahs on Main, then called Pyromaniacs, after learning that police regularly received complaints of loud noise and parties at the business.

http://www.inforum.com/event/article/id/435266/

Partial indoor e-cigarette "vaping" ban heads to Dayton for signature

Posted by: Abby Simons, Star Tribune

A retooled measure that would ban the use of electronic cigarettes—commonly known as “vaping”– in some public places head to Gov. Mark Dayton’s desk for signature into law.

The measure re-passed the House 93-35 and the Senate 52-13 Thursday as part of the Health and Human Services Policy omnibus bill, which also includes a ban on the use of indoor tanning beds by children under 18.

The final version of the bill prohibits vaping in most government-owned buildings including correctional facilities, daycare facilities including home daycares, hospitals and any buildings owned by the University of Minnesota or Minnesota State Colleges and Universities, including dorm rooms. The bill does not ban use in city-owned buildings, but they have the option of adopting by equal or more strict bans.

The bill also require4s child-proof packaging for all e-cigarette liquids p[prohibits e-cigarette use in public schools, bans retail sales from mall kiosks and allows local governments to pass stronger restrictions and ensure penalties for sale of e-cigarettes to minors.

The final result was a compromise between a stricter Senate versions authored by Sen. Kathy Sheran, DFL-Mankato, which placed e-cigarettes under the Clean Indoor Air Act, banning their use in all public places. A House version narrowed the ban to state buildings and public schools. The bill’s House author, Rep. Laurie Halverson, DFL-Eagan, removed the Clean Indoor Air Act provision in hopes of garnering enough votes to pass the bill.

In the past year, 80 percent of Minnesota’s 200 e-cigarette retailers have set up shop in kiosks and brick-and-mortar stores, garnering gratitude from users who say the devices are a safe alternative for those trying to quit smoking. But the devices, which can contain nicotine laced with various flavors that emit a vapor rather than smoke, concern some who say little is known about what chemicals secondhand vapors contain, and whether they’re harmful. However, opponents of an indoor use ban say there’s no proof that the vapor emitted from the products is harmful or dangerous.

Despite earlier reservations about a ban, Gov. Mark Dayton said he intends to sign the bill.

E-cig boom leads to taxation, regulation questions

WOODBURY, Minn. (AP) — Stores that sell increasingly popular e-cigarettes are popping up around the Twin Cities, highlighting the lack of regulation or taxation of the tobacco alternative.
E-cigarettes are battery powered and produce a nicotine vapor. Owners of stores that sell the devices told the St. Paul Pioneer Press that demand skyrocketed in July when a state tax increase sent cigarette prices up to about $7.50 a pack.
“Sales were insane,” said Angie Griffith, who owns several Smokeless Smoking stores and kiosks.
The surging sales have left regulators scrambling to react. The federal Food and Drug Administration is expected to release regulations on e-cigarettes soon, but for now there are very few state or federal rules applying to the devices.
That’s raised concern that some varieties could serve as an introduction to nicotine for youths. Some come in flavors including root beer, and cookies and cream.
But some former traditional smokers said e-cigarettes helped them kick a tobacco habit. A new Smokeless Smoking store in Woodbury, which opened Nov. 18, has already become a social hub for e-puffers, with its dimly lit lounge with sofas, TVs, games and books.
Griffith said the ability to form friendships and impromptu support groups with fellow e-cigarette smokers is important in helping customers kick tobacco.
“Smoking” an e-cigarette involves pushing a button on the small metal cylinder, examining its tiny computer screen, applying drops of flavoring and keeping an eye on the battery, then inhaling and exhaling the vapor. The vaporized liquids come in standard varieties but can be custom-made. Flavors mimic brands of cigarettes including Marlboro and Camel.
Gus Menth, a White Bear Lake truck driver, smoked cigarettes for 15 years. He tried to quit with nicotine patches but got so frustrated he once popped one in his mouth and chewed it. He can still remember the exact date he successfully switched to e-cigs: Jan. 15, 2011.
“I was tired of smelling bad,” Menth said. “And the cost savings is incredible.”
The metal e-cigarette costs from $30 to about $200, but is reusable. Menth and his wife, who also smokes e-cigs, estimate they are saving about $170 a month since their switch.
Menth said his breathing has improved. “I can run and play with my kid now,” he said.
___
Information from: St. Paul Pioneer Press
http://minnesota.publicradio.org/display/web/2013/11/30/health/ecigarettes-twin-cities

Representative Phyllis Kahn proposes ban on indoor e-cigarettes

By Allison Kronberg
Minnesota could start treating e-cigarettes just like regular cigarettes.
Rep. Phyllis Kahn, DFL-Minneapolis, proposed a bill Friday to include e-cigarettes in the Minnesota Clean Indoor Air Act, which she authored in 1975, that would ban their use indoors.
She said she’s proposing the bill because the health effects of e-cigarettes are unclear, the smokeless alternative can appeal to young people and it would make the law consistent.
“The same controls that apply to smoking regular cigarettes would apply to smoking e-cigarettes,” Kahn said.
This summer’s new tobacco tax raised the price for a pack of cigarettes by $1.60. Since then, e-cigarettes have gained even more popularity with smokers in Minnesota.
Kahn said she’s heard many people support the bill.
“The negatives all come from people who are users of the e-cigarettes and maybe one from a manufacturer,” she said.
Bad for business
In its print ads, e-cigarette company FIN has encouraged its customers to “rewrite the rules.” Its website encourages users to “smoke when you want, where you want.”
University of Minnesota biology, society and environment sophomore Josh Meidl said he’s never smoked regular cigarettes and doesn’t plan to, but he carries his e-cigarette with him every day because he likes the taste.
“I feel like [the bill] just totally defeats the purpose of the e-cig, because one of its main purposes was to bring smokers back indoors,” he said.
While the move inside is a draw for some, businesses and agencies around the state are enforcing their own rules on the product.
Metro Transit spokesman John Siqveland said the public transportation network banned e-cigarettes from its buses, trains and facilities this summer. Hennepin County banned e-cigarettes on county property in July, a move that county administrator David Hough called proactive at the time.
Joe Berg, general manager of the Library Bar and Grill in Dinkytown, said statewide regulation would be beneficial. Now, the Library asks people not to smoke e-cigarettes on the property, and they generally comply, he said.
Kahn said opponents of the bill argue e-cigarettes are beneficial for smokers who are trying to quit.
“And the answer is no, we’re not going to take it away from you,” she said. “You use it exactly where you’d use a regular cigarette.”
Nasario Sepeda, manager at Smokedale Tobacco in Stadium Village, said the store relies “heavily” on e-cigarette sales and doesn’t agree with the ban.
“The only way to see if it has any effect on us is if it passes,” he said.
Health effects unknown
The U.S. Food and Drug Administration doesn’t regulate e-cigarettes, and experts say they’ve been researched little.
A 2009 FDA study found potentially harmful substances in a majority of the e-cigarettes sampled. E-cigarettes often have nicotine and can be addictive.
“One thing is that the FDA is still struggling over the safety,” Kahn said. “We’re looking at if it’s a safe thing for individuals to use.”
Kahn said e-cigarettes could be a gateway to their more dangerous counterparts, especially for young people. University research found young people would experiment with e-cigarettes because they’re often flavored and because the students view them positively.
Ferdinand Schlapper, director and chief health officer at Boynton Health Service, said the smokeless alternative just prolongs addiction, although many use e-cigarettes to help them quit smoking.
“Proven ways to stop smoking are nicotine replacement therapy and the patch, along with a supportive environment,” Boynton senior health advocate Timothy Bell said.
School of Public Health associate professor Deborah Hennrikus said she would support a ban on indoor e-cigarette use because there is still so little known about them.
“There isn’t enough known to the extent to which e-cigarettes can help people stop smoking, or to the extent to which they appeal to adolescents as a gateway to using other tobacco products,” she said.
“They’re new enough that the research hasn’t been done.”
http://www.mndaily.com/news/campus/2013/11/06/representative-phyllis-kahn-proposes-ban-indoor-e-cigarettes

Legislation would add e-cigarettes to Minn. smoking ban

State Rep. Phyllis Kahn, DFL-Minneapolis, wants to clear up confusion about the use of electronic cigarettes by adding the so-called vaping devices to the statewide cigarette ban.
She plans to introduce legislation in the 2014 session that would add e-cigarettes to the Minnesota Clean Indoor Air Act.
“Right now, we’ve got a patchwork system where local governments and even individual businesses make their own rules,” Kahn said in a press release. “It’s creating a lot of confusion. My bill removes any doubt as to where e-cigarettes can be used by applying the same regulations we have for traditional tobacco products.”
Kahn joins The Daily Circuit to discuss the issue.
http://minnesota.publicradio.org/display/web/2013/11/04/daily-circuit-e-cigarette-ban-kahn

Flavored cigarette use increasing

MINNEAPOLIS, Minn (KFGO AM) — A Centers for Disease Control and Prevention study found four out of ten teen smokers prefer flavored little cigars or flavored cigarettes.
Bob Moffitt is with the American Lung Association of Minnesota and says the data also shows kids using the flavored products are less likely to think about quitting than those who smoke traditional cigarettes.
Moffitt says these products are also appealing to teens because they are cheaper and taxed differently.
Moffitt would like to see Minnesota lawmakers draft legislation that would close some of the tax loopholes involving flavored tobacco products.
http://kfgo.com/news/articles/2013/oct/24/flavored-cigarette-use-increasing/

The risks are still unclear as the use of e-cigarettes grows

Article by: EDITORIAL BOARD , Star Tribune
The offerings at Fridley’s eCig & Supply Company store sound like something a kid might choose as a slushie or smoothie flavor on a hot summer day: Melon Mist; Blueberry Cream; Lemon Blast, and Papa Smurf’s Brother, a root beer and vanilla combo named for the iconic cartoon character.
Instead, these are among the more than 50 flavorings of “juice” — a liquid vaporized and inhaled through a pen-shaped device — that the store and others like it offer to those who want a nicotine hit without puffing on a traditional cigarette. Earlier this week, the number of customers streaming into the Fridley store attested to the rapidly growing popularity of e-cigarettes and “vaping.” (Since these devices produce a vapor, e-cigarette users say they “vape” instead of “smoke.”)
While e-cigarette sales are still a small fraction of the $80-billion-plus annual market for traditional tobacco cigarettes, sales of these essentially unregulated delivery devices for a highly addictive drug are skyrocketing, with 2012 sales of $300 million to $500 million expected to double in 2013, according to the Economist magazine. Neither regulators nor researchers assessing the potential health risks have kept up. That needs to change.
The U.S. Food and Drug Administration is still sitting on the sidelines when it comes to e-cigs. The agency has oversight of regular cigarettes and smokeless tobacco but not e-cigarettes unless they are sold along with a health claim. What that means is that minors in many states can buy e-cigs. Manufacturers may also advertise their often candy-flavored concoctions in ways that traditional cigarette companies are restricted from. An e-cigarette ban would go too far, given the uncertainties regarding their effects, but restrictions on e-cig sales and marketing to minors are common sense and overdue. Forty state attorneys general, including Minnesota’s Lori Swanson, recently sent a letter to the FDA demanding that the agency finally issue its expected but much-delayed regulations by the end of this month. An FDA spokesman this week declined to say if that deadline will be met.
States and cities also need to set parameters on e-cig use to protect public health while researchers determine the safety of their use — both for those who vape and those who may be exposed secondhand to the vapor.
While Minnesota does prohibit e-cig sales to those under 18, the state’s Clean Indoor Act does not restrict adult use. Legislators in 2014 need to ensure that the state’s smoke-free laws are up to date. Large tobacco companies, which are buying up e-cigarette makers, should not be able to exploit loopholes to get new Minnesotans hooked on nicotine and, potentially, their traditional tobacco products.
It’s unclear if e-cig users are more likely to eventually smoke cigarettes, but respected public-health experts, such as Minnesota Health Commissioner Dr. Ed Ehlinger, are concerned that e-cigs “normalize” smoking behaviors and may be a gateway to traditional tobacco use. This could potentially undo hard-won progress to cut smoking rates.
E-cig advocates, particularly those on social media, fairly point out that these products likely are safer than traditional smoking. It’s also clear from talking with customers at the Fridley store that e-cigs may have an important role to play in helping people quit tobacco. For Lisa Stegeman of Brooklyn Park, e-cigs are the only stop-­smoking product that has worked for her.
Still, data on e-cigs’ effectiveness is mixed, with a recent study in the Lancet showing no significant efficacy compared with a placebo. Data on the risks of long-term use is also inadequate. And with little oversight of the manufacturing of these products or the “juice,’’ who’s to say what’s in them? Not every proprietor is as conscientious as eCig & Supply Company’s Scott Huber, who uses only a reputable “juice” supplier based in Minnesota.
Medical research is also insufficient to determine the risk of secondhand exposure to the vapor. One study found that metal and silicate particles from e-cig aerosol were present in bystanders.
The Duluth City Council recently voted to prohibit e-cig use in public places, putting the city at the forefront of municipalities in Minnesota and elsewhere when it comes to e-cig safeguards. Duluth’s elected officials got it right. Medical researchers are only starting to determine e-cigs’ risks and potential benefits. Until these are known with more certainty, spaces free of cigarettes should be e-cig-free as well.
http://www.startribune.com/opinion/editorials/227144351.html

Forum editorial: Minn. tax on tobacco is a health tax

Opponents of Minnesota’s new tobacco tax seem to believe the $2.83 per pack of cigarettes tax is about only revenue and business. It’s not. It’s first and foremost about public health.
While the tax has had expected impacts on revenue and business since it went into effect July 1, its primary purpose is to discourage smoking. The tax is having the predicted results: Sales of cigarettes are down. Early evidence suggests the steep rise in the tax will generate a corresponding decline in smoking. That has been the experience of every other state that raised its cigarette tax substantially. Young smokers or potential smokers are especially sensitive to price.
Even as sales of cigarettes slipped as the tax took hold, revenue increased, as forecast. The tax is up 30 percent, after all. Some of that additional revenue will be used to fund the new Vikings stadium.
However, as fewer Minnesotans take up the habit and others quit or reduce cigarette purchases, revenue will decline. The ideal situation, of course, would be that tobacco use falls so far as to make revenue from the tax unimportant to the state’s overall financial picture.
Reacting to the decline in sales, one person at a retail store said: “It’s very bad.” No, it’s not. In the long term, fewer people smoking cigarettes is a good thing. It’s good for their health, their medical bills and the nation’s health care system.
Often characterized as “sin taxes,” taxes on cigarettes and other tobacco products are in effect health taxes. There is no sin in public policy that aims to improve and protect health. The real sin is peddling a product that sickens and kills people.

Forum editorials represent the opinion of Forum management and the newspaper’s Editorial Board.
http://www.inforum.com/event/article/id/414349/

Minnesota cigarette sales down, but tobacco revenue up

By: Mark Zdechlik, MPR News 90.3 FM, INFORUM
Cigarette sales in Minnesota have dropped since a $1.60 per pack tax increase took effect July 1, as tobacco sellers have feared.
Early Minnesota Department of Revenue numbers show cigarette stamp sales dropped more than 35 percent this July compared to July a year ago. Tobacco stamp sales for August were down 12 percent compared to the same month a year ago.
Although sales are down, because of the higher tax, the money the state collects from cigarette taxes has grown, according to the department.
“It’s very bad,” said 28-year-old Abdul Habit, who works at New Smokes in Maplewood. “It went down, like people [are] cutting back. People who used to buy a carton, now they buy five packs. People who used to buy a pack, now they just ask for single cigarette.”
Habit said his customers complain a lot about the tobacco tax increase.
“They cry a lot,” he said. “Nobody’s happy about it.”
Before cigarettes can be legally sold at shops like New Smokes, wholesalers apply tobacco stamps they buy from the state to each pack.
The stamps prove the state taxes have been paid.
The stamp machine at M. Amundson Cigar and Candy Co. in Minneapolis has not been as busy as it was before the tobacco tax increase, even though the company still sells more than $1 million in cigarettes each month.
“We’ve lost one-third of our sales,” company co-owner Ross Amundson said. “Stores that we sold to along the Wisconsin border have basically lost most of their volume and the larger cigarette stores around the cities here that we sell to, their volume in cigarettes is probably in half.”
Amundson said while cigarette sales are down sharply he’s selling more “roll-your-own” tobacco and more electronic cigarettes.
“I’m not going to just be laying people off,” he said. “We’ll figure it out somehow. We’ll bring on other products, we’ll bring on new stores — whatever we have to do to survive.”
Amundson said he’s heard cigarette sales are up dramatically in North Dakota where the state tax on a pack is just $.44 compared to Minnesota’s $2.83.
North Dakota Department of Revenue statistics show cigarette sales there were up a little more than 9 percent in August over the same month last year.
Minnesota officials predicted that increasing the cigarette tax by roughly 30 percent would lead to a roughly 30 percent reduction in cigarette consumption.
There’s no way to quantify whether that’s happening. But officials at ClearWay Minnesota, a group that offers free services to help people stop smoking, said interest in its programs is up sharply over last year.
“It’s pretty striking in terms of the number of web visits of people who are checking out Quitplan.com,” ClearWay spokesman Mike Sheldon said. “We’re talking about a 240 percent increase year-over-year. That’s a huge increase and certainly the tax is a big effect of that in making people think about quitting.”
Sheldon said he expects cold weather and New Year’s quit smoking resolutions will sustain that increased demand into the winter for ClearWay’s smoking cessation programs.
Although cigarette stamp sales to Minnesota wholesalers dropped significantly, tax revenue the state collects from cigarettes is up more than 56 percent for July and August compared to the same two months last year.
Tax collections on other-than-cigarette tobacco products such as ‘roll-your-own’ tobacco also are up.
Still, while tobacco tax receipts are up sharply, the initial numbers show tax revenue is $7 million below projections for July and August.
http://www.inforum.com/event/article/id/413402/group/News/