Tobacco take to top $90 million
OKLAHOMA CITY - New tobacco taxes paid in 2005 are expected to boost health-care programs by more than $90 million, despite problems with collecting those taxes from tribal smoke shops, especially in Tulsa.
Leaders estimated that an increase in the tobacco tax that kicked in last January would produce about $110 million per year.
In addition to the problem of tax collections on Indian lands, revenue also has fallen short because more people than expected have quit smoking. Early projections indicated about 20,000 would kick the habit, but health officials about 30,000 have quit.
Many of the new health programs that were to benefit from the tax are just starting, so there haven't been shortfalls in revenue yet.
"Overall, I'm very pleased that through the tobacco tax we have been able to raise so much extra money for health-care programs," State Treasurer Scott Meacham said. "It has been very successful from that standpoint."
Whether the tobacco tax increase has been successful in other ways undoubtedly will be debated in 2006 as politicians in both parties are asked by the governor to help pass laws aimed at improving collections from tribal smoke shops.
Meacham estimates that the state could be losing $2 million a month in uncollected cigarette taxes from smoke shops that are selling cigarettes with cheap tax stamps.
Compacts signed by the tribes and the governor authorize the sale of cigarettes with a 6-cent stamp in border stores, allowing them to compete with stores in other states.
However, three surveys by the Tulsa World show that most stores in the Tulsa area are selling cigarettes bearing the cheap stamps when they should be selling packs of cigarettes bearing stamps of either 75 or 86 cents.