$2 cigarette tax hike now rests with House

A committee that reviewed a bill seeking to increase the cigarette tax by $2 a pack recommends that the full House membership decide on it, owing to the controversial nature of the proposal and its seeming conflict with a separate “sin tax” bill that covers not only cigarettes but also alcoholic drinks, soda, and food items that are not considered healthy.

“The Ways and Means Committee will allow the full body to decide on it,” committee chair Rep. Tony Sablan (Ind-Saipan) told Saipan Tribune yesterday.

If a pack of cigarettes now costs $3.75, for example, this could go up to $5.75 a pack once House floor leader Ralph Demapan’s (Cov-Saipan) House Bill 18-118 becomes law.

Rep. Ralph Yumul (Ind-Saipan), also a committee member, separately said he supports the bill’s intent to generate revenue, among other things, but he raised a particular concern.

“My concern is that some distributors have started bringing in low-end cigarettes or cheap cigarettes. This is very dangerous. When the $2 tax increase becomes law, the cost of cigarettes would still be $5-plus and not more than $7 if they buy the low-end cigarettes,” Yumul said.

A House session may be held next week and the committee report on the bill could be on the agenda.

The competing “sin tax” increase bill, authored by Rep. Felicidad Ogumoro (R-Saipan), seeks to help promote a healthy lifestyle in the CNMI and fund the Commonwealth Healthcare Corp.

The Saipan Chamber of Commerce opposes the cigarette tax hike bill, saying that raising cigarette taxes by 100 percent will not necessarily result in reduced smoking, and the tax hike would further increase the underground distribution of cigarettes.

The cigarette excise tax last went up in December 2010, from $1.75 to $2 a pack. The cigarette tax increase at the time was one of the provisions of a 2002 law that requires a 25-cent increase eight years later, to help fund tobacco control programs.

Electronic gaming bill

Sablan, meanwhile, said that Gov. Eloy S. Inos indicated at their meeting yesterday that the governor will sign into law an electronic gaming bill that the Senate approved on Thursday last week. Sablan authored the bill.

“The governor said he will sign it either [Thursday] or Friday, or maybe in the next few days. I told the governor that it’s not the bill’s intention to move poker hotels to hotels so they will pay only $2,500 in license fee,” said Sablan.

Poker license fee on Saipan is $12,500 per machine.

Press secretary Angel Demapan said the governor had yet to sign the electronic gaming bill as of last night.

Once the bill is signed into law, Sablan plans to introduce a bill that would “remove misinterpretation” of the measure.

He reiterated that the bill places restrictions on where these electronic gaming machines could be installed and that there are only a few hotels that meet the criteria.

The compromise version allows electronic gaming operations only at hotels or resorts with at least 100 rooms, or those attached to a golf course if they have less than 100 rooms. These are only allowed on Saipan.