State Legislators Question Benefits of Raising Tax on E-Cigarettes

Andrew Kitchenman | April 15, 2014 | Health Care
O’Dowd says raising tax will decrease smoking, particularly by children

State Health Commissioner Mary E. O’Dowd, at center in photo, supports steps to discourage use of electronic cigarettes, including an increase in the tax on the devices.
State officials say public health in New Jersey — as well as the state budget — would benefit from applying the $2.70-per-pack cigarette tax to electronic cigarettes, but the argument is receiving a cold reception among some legislators.

Health Commissioner Mary E. O’Dowd pointed to public health benefits from raising the cost of smoking.

“Increasing the cost for the product is a very effective strategy to reducing utilization,” O’Dowd said during a discussion of the issue during the Assembly Budget Committee hearing on the proposed budget for the state Department of Health for the fiscal year starting on July 1.

She said she is most concerned with the use of e-cigarettes by children, adding that the perception that the products are safe is wrong. E-cigarettes are battery-powered and use heat to vaporize a liquid solution that generally contains nicotine and flavoring.

“Our children are using them and these are children who were not necessarily smokers before,” O’Dowd said. “This is potentially a new gateway to nicotine addiction.”

Democratic legislators said it might be too soon to impose the cigarette tax on the products, which currently are only subject to the state’s 7 percent sales tax. They also questioned the estimate included in Gov. Chris Christie’s budget proposal that the state would raise $35 million from the tax.

“It seems like we’re going to catch a lot of people with this price point that will either go elsewhere to buy or will not buy it and continue to smoke a cigarette, which appears to be more harmful,” said Assemblyman John J. Burzichelli (D-Cumberland, Gloucester and Salem).

Assemblyman Joseph Cryan (D-Union) said the state may “jump the gun” in discouraging the use of the products through a tax when it’s possible that they could be helpful in reducing smoking.

O’Dowd said that the state plans to have an exemption from the tax for residents who have been prescribed e-cigarettes as part of an effort to quit smoking.

Assemblyman Benjie E. Wimberly (D-Bergen and Passaic) noted that Gov. Chris Christie cut $7.5 million for smoking cessation programs in the 2010 state budget. He questioned why Christie’s new budget proposal doesn’t commit e-cigarette tax money to public health efforts.

New Jersey is the only state in the country that doesn’t spend state money on reducing smoking, according to antismoking organization the Campaign for Tobacco-Free Kids. Its adult smoking rate of 17.3 percent is 13th lowest in the country, while its cigarette tax is eighth highest.

O’Dowd noted that the federal government funds different programs to aimed at preventing young people from smoking and helping smokers quit, including a free telephone counseling service for those looking to quit.

But O’Dowd emphasized that U.S. Centers for Disease Control studies have determined that public-policy changes like the state’s Smoke-Free Air Act — which bars smoking in workplaces and many public places — and raising cigarette taxes are most effective in reducing smoking. O’Dowd noted that roughly 38 percent of the state’s municipalities have enacted local smoking bans.

She also pointed out that raising cigarette prices has a particularly strong effect on children, since it puts the price “outside the scope of what they’re willing to pay.”

O’Dowd added that the prevalence of smoking in the state remains too high “and we’re working to reduce that.”

Further, she said the combination of marketing the products as safe and the addition of “child-friendly” flavors posed a potential danger.

“These are tactics that we have seen in the past and many of these organizations have been purchased by tobacco organizations, so they are very sophisticated in their marketing strategies,” O’Dowd said.

The U.S. Food and Drug Administration doesn’t currently regulate e-cigarettes but has submitted a plan to do so. This plan is opposed by the e-cigarette industry.

When Wimberly asked O’Dowd if she would recommend that part of the e-cigarette tax revenue be used for public-health purposes, she said, “That is certainly an option.” She later emphasized that she supports Christie’s budget.

Cryan pointed out that some people have used e-cigarettes to help quit smoking. After O’Dowd indicated that e-cigarette vapor contains substances that the CDC has found to be toxic, Cryan asked: “Are we saying that it’s bad for everybody’s health and therefore should not be a legal product in the state of New Jersey?”

Deputy Commissioner Arturo Brito, a pediatrician, said the lack of FDA regulation means “we don’t know what exactly is inside” of the various brands of e-cigarettes, “but we know that they were specifically designed to deliver nicotine.”

He also noted a CDC study that found that the use of e-cigarettes by middle- and high-schoolers doubled from 2011 to 2012, reaching 1.78 million children nationally.

Committee Chairman Assemblyman Gary S. Schaer (D-Bergen and Passaic) also questioned whether the state had ever raised taxes for an unregulated product due to health concerns.

O’Dowd said e-cigarettes are unique because they’re “clearly potentially harmful to a significant portion of our population, specifically related to providing a vehicle for the delivery of nicotine — a highly addictive drug.”

Schaer said other unregulated products could cause long-term health problems for young people, including products marketed for sexual performance. O’Dowd said she “wasn’t aware of those.”