Vapers and vape shops in Connecticut narrowly avoided disaster last week, when a proposed punishing tax on vaping products was not enacted. The budget introduced by Democratic Gov. Dannel Malloy on September 8 included a 75 percent wholesale excise tax on vaping products, as well as a similarly large increase of $2/oz. in the smokeless tobacco tax. However, the Republican budget that did pass is likely to be vetoed by the governor, so the tax might be reintroduced.
The governor’s budget was described as a compromise even though Malloy’s party controls both houses of the Connecticut legislature. Because the state budget is overdue, a vote was set for just one week after Malloy presented his plan. In a surprise move, the legislature rejected the Governor’s plan and rapidly passed a budget crafted by Republican legislators on Friday, September 15. That budget, which also has Democratic support, does not include new excise taxes. Malloy has pledged to veto the bill.
If Malloy continues to fight for his vaping tax, he could decimate the state’s approximately 80 small businesses that specialize in vaping products, according to Gregory Conley of the American Vaping Association. In Pennsylvania, a 40 percent tax caused nearly 150 vape shops to close in that commonwealth. Knowledgeable consumers can easily avoid such taxes (possibly illegally, depending on the details of the law) by finding out-of-state online merchants who do not collect the tax. But the businesses and the local services they provide, including jobs and personalized advice to new vapers, are lost.
Connecticut vapers and vape businesses responded quickly when Mally’s budget was announced, thanks to social media and a call to action by CASAA, the Consumer Advocates for Smoke-free Alternatives Association. But Conley, who followed the situation closely, says that it is unclear what ultimately happened.
Just a few hours before the Friday vote, the vaping tax was removed, perhaps due to the public outcry of support for small businesses in the state. Vape shop owners in Connecticut rallied outside of the Legislative Office Building the day before the vote to make their voices heard. It appears they were successful.
It is also unclear who included the excise taxes in the Governor’s budget. The Governor’s office blamed the House and Senate negotiators, according to Conley, and the negotiators blamed the Governor.
Given the state’s budget woes, the new taxes might be nothing more than a desperate attempt to balance the budget on the back of a convenient minority. However the proposed taxes on both vaping and smokeless tobacco suggest that lobbyists with an interest in opposing tobacco harm reduction (THR), were likely working behind the scenes. Anti-THR lobbying threatens millions of lives a year as it blocks a key method for smokers to transition away from deadly cigarettes.
Conley warns that this far from a permanent victory. With Malloy’s promise to veto the GOP budget, negotiations are now back to their starting point. Given the state’s continuing budget problems and the efforts of anti-THR lobbyists, Connecticut vapers and small business owners should remain vigilant. Once a proposal like this has been made, it becomes easier to make it again.