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Oppose Burdensome Regulations and Fees on Tobacco Products in House Bill 2135!
An Open Letter to the Oklahoma State Legislature
February 28, 2011
On behalf of the National Taxpayers Union’s (NTU’s) nearly 4,700 members in Oklahoma, I urge you to reject HB 2135, which would eliminate the state’s preemption on local authority to regulate tobacco. Although proponents claim this legislation will enable municipal governments to promote economic development through healthy workforce initiatives, in reality HB 2135 includes language that could lead to burdensome regulations and another round of fees on tobacco. This in turn would actually harm economic development due to higher costs on the poor and on small retailers in the Sooner State.
Low-income Oklahomans are more likely to smoke, so they will disproportionately feel the impact of any additional fees on tobacco products. A 2007 study by the Heritage Foundation showed that more than one-fourth of people who smoke live below the federal poverty line and another quarter of all smokers live within 100-200 percent of the poverty line. High fees on tobacco products would be a substantial additional expense for these citizens, especially considering that Oklahomans already pay the nation’s 19th-highest state and local tax burden as a percentage of income – a heavier load than citizens bear in the neighboring states of Colorado, Kansas, Missouri, New Mexico, and Texas.
Sales of cigarettes and other tobacco products also comprise a substantial portion of business for small retailers. The National Association of Convenience Stores reports that cigarettes account for about one out of every three dollars of total sales nationwide at their establishments. If local governments increase the amount of fees on tobacco products, Oklahoma’s retailers in towns such as Blackwell, Sallisaw, and Marietta could lose business to competitors in Kansas, Arkansas, and Texas who do not levy such fees. Ironically, this will deprive the state, as well as local governments, of revenues.
Economic development is of course a worthy goal for Oklahoma, and NTU generally supports laws allowing municipalities the flexibility to innovate with competitive fiscal policies. However, laws that expand public officials’ authority to raise prices and impose onerous regulations will not create more jobs or enhance the prosperity of citizens. Therefore, our members hope that you will stand for real economic development by opposing HB 2135.
Cc: Governor Mary Fallin