Tobacco tax hike takes effect today

By Rebecca Cook

Associated Press

OLYMPIA — After a year in which initiatives stole headlines from the Legislature, the biggest law taking effect today is one the voters approved: the new tobacco tax.

The tax on a pack of cigarettes increases 60 cents to $1.42, the highest in the nation, with the money to go toward low-income health care. Taxes also will increase for cigars and other tobacco products.

Voters have also mandated an 18-cent increase in the hourly minimum wage. The minimum wage jumps from $6.72 to $6.90 today, thanks to an initiative voters approved in 1998 that automatically raises the minimum wage each year.

The other big change in Washington law for 2002 is a new rule that requires state-regulated health insurance plans to cover contraceptives, a move that will affect about 200,000 women in the state.

About 24 percent of Washington adults smoke. The tobacco tax Initiative 773, which passed in November with 66 percent of the vote, will cost pack-a-day smokers about $220 a year and is expected to raise $120 million annually.

As the new year and new tax approached, many smokers stocked up on cigarettes, while others resolved to quit.

"We’re rocking today," said Larry Running, owner of Big Smoke tobacco shop in Everett.

He spoke on the phone for only a few seconds Monday before business pulled him away. One woman earlier charged $800 worth of cigarettes after she determined it would be cheaper to pay the credit-card interest than the new tax. Other customers have paid considerably more for their stockpiles, Running said.

"People are stocking up, almost everybody — even if they can only afford an extra pack," he said.

Retailers are worried about losing tobacco sales to Oregon and Idaho, where the tax is lower, and to tribal smoke shops, which do not have to charge the state tax. It’s illegal for nontribal members to buy cigarettes at tribal shops, but many people do it anyway.

Business was also brisk at 99 Smoke Mart in Seattle. Manager Amy Nguy said many customers told her the new taxes would push them to quit, but she doubts it.

"I think it’s hard to quit," said Nguy, a nonsmoker. "I have seen so many people try to quit, but they come back."

Mike Landry was optimistic. Taking a smoke break outside the TV rental shop where he works in Olympia, he said he was smoking the last pack he would ever buy. The father of a 6-month-old son, he has been trying to quit and hopes the new tax will help him.

"I was already planning on quitting," he said. "It definitely helps. … I think for a lot of people it’ll help them out."

Also starting today, more Washington women will get their birth control covered by insurance. Insurance Commissioner Mike Kreidler enacted a rule requiring state-regulated health plans that offer prescription benefits to cover contraceptives. He said the rule was necessary to comply with Washington’s anti-discrimination laws.

"The courts have upheld that failure of insurance plans to cover prescription contraceptives constitutes sex discrimination under Washington state law," Kreidler said.

The rule applies only to health plans regulated by the state, and thus does not include many large companies that are self-insured. People with questions about the new birth control coverage rule may call the insurance commissioner’s hotline at 800-562-6900.