Feb 062005
Authors: Brian Park

Tobacco users must now shell out more money from their wallets because of the increased tobacco tax, which took effect on Jan. 1. The tax is expected to generate $172 million in new revenue annually.

While the new tax is costing users more than it did in the past, it also is the center of a debate in the Colorado legislature on where the new and incoming revenue should be spent.

The tax on a pack of cigarettes has increased from 20 to 64 cents. Taxes on other products like chewing tobacco and cigars doubled from 20 to 40 cents.

Amendment 35 passed with 61 percent of the vote in November. Even with the rise in cost, stores around Fort Collins have not seen a significant decrease in tobacco sales.

Gina Short, store manager at Gasamat, 1054 W. Vine Drive, said while there has been a decrease in the sale of cigarette packs, the store has seen an increase in loose tobacco and roll-your-own-cigarette products like rolling papers, injectors and rolling machines.

"Cigarette sales dropped off a bunch at first, but sales of the roll-your-own have picked up a bunch," Short said.

At Al's Newsstand, 177 N. College Ave., business has stayed pretty much the same, said Ted Hill, acting manager.

"People complain about the prices a lot more than they used to, but more than likely they usually buy," Hill said.

While citizens now have to pay more for tobacco, the issue for the Colorado legislature is where the new revenue should go and how it should be spent.

The Democrats, who control the state Senate and the House of Representatives, have outlined how they would like to see the revenue be spent, as has Republican Gov. Bill Owens. But as of right now the two sides are not in complete agreement.

The Democratic proposal will be introduced by Sen. Bob Hagedorn, D-Aurora, and Rep. Betty Boyd, D-Lakewood.

"We want to deliver on campaign promises," Hagedorn said. "Amendment 35 was proposed to have the money going to medical care programs and tobacco education and prevention."

Most of the revenue will go toward expanding Medicaid and other medical programs for children, legal immigrants and low-income families.

One part of the plan that is being debated is how much revenue should be put into a reserve fund to be able to cover future shortcomings. Owens and Republicans in the legislature would like to see a more significant amount of money in the reserve fund than the Democrats would. While Owens would like to see around $45 million, the Democrats would only like $23 million to be put in the "rainy day" fund.

Until the end of the fiscal year in June, the new tax is expected to bring in around $23 million and that will be the money that will be set aside, Hagedorn said.

"There is a provision to have a reserve fund though it's not as grand as the one the governor is proposing," Hagedorn said.

If too much money is set aside, Hagedorn said, in a sense the voters for Amendment 35 will be cheated.

"We may be accused of not being truthful to voters and the promises they heard during the campaign," he said.

Sen. Ron Teck, R-Grand Junction, however, does not see it that way. Teck said Owens's ideas are prudent and responsible. He does not believe voters will be cheated if Owens's ideas are implemented.

"I don't think so because if the funds aren't there later than the voters will really be cheated," Teck said. "Actually the fund is really looking out for the people in the long term and helping them."

The Colorado Tobacco Education and Prevention Alliance, 1780 S. Bellaire St. in Denver, is an organization that pushed for Amendment 35 to be passed.

Chris Sherwin, the organization's executive director, said the will of the voters need to be upheld. He agrees with the Democrats' plan because it is responsible and the right outline with what the voters voted for. He said the governor's proposal takes too much money away from medical services the amendment said it would provide.

"If the money is not put toward the services that were voted for, then yes the voters would not be getting what they were told would happen when the campaign was going on," Sherwin said.

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