CHARLESTON, W.Va. — The state Senate took steps Wednesday toward passing Gov. Earl Ray Tomblin’s 45-cent tobacco tax increase following a vote Tuesday afternoon by the Senate Finance Committee.
The committee approved the bill (SB 1005) with two amendments. One dedicates $43 million of what’s brought in from the tobacco tax increase to the Public Employee Insurance Agency for the 2016-2017 plan year. The second approved amendment increases the excise tax on the liquid vapor used for e-cigarettes to 12 percent.
Sen. John Unger (R-Berkeley) proposed the PEIA amendment, which he said would guarantee funding.
“I keep hearing people say, ‘It’s (money for PEIA) in the budget,’ what’s in the budget that’s not funded is really not real,” Unger said.
While the 45-cent tobacco tax increase fully funds the plan approved by the PEIA Finance Board it won’t ‘fully fund’ PEIA, PEIA Director Ted Cheatham told the committee. The new plan includes a 12 percent premium increase for active workers and retirees.
Sen. Roman Prezioso (D-Marion) unsuccessfully argued for a $1.00 increase in the tobacco tax to give PEIA more money. Sen. Majority Leader Mitch Carmichael (R-Jackson) spoke against the additional increase. He said it would have no chance of passing the House of Delegates.
“I would love to have a dollar increase in the cigarette tax but I know that it can’t happen,” Carmichael said. “I’m not saying it can’t ever happen but I know it won’t happen this year.”
What the House may or may not do shouldn’t control the Senate, Prezioso said.
“Are they dictating to the Senate this is the way it’s going to be? Then why am I here? We’re sending them an option, a choice,” Prezioso said.
The bill will be on second reading in the Senate at Wednesday morning’s floor session.
The Senate Finance Committee also passed the bill (SB 1002) that would fill the revenue hole in the current state budget. It includes the sweeping of various accounts, $12 million from the legislature’s traffic account and $29 million from the Rainy Day Fund. The bill will also be on second reading Wednesday.