For too long, cigarette taxes have been “easy money” for local jurisdictions, but thanks to the Thomas Jefferson Institute that’s no longer the case. An Institute study demonstrated that cigarette tax increases produce a decrease in revenue, don’t meet expectations, miss budget projections, or simply produce results that often turn flat or negative. This was echoed in a column by Institute President Mike Thompson in the Richmond Times-Dispatch. It also was cited by local news stories and editorials throughout the state, as cities and counties considered imposing or raising such taxes.
When the Richmond City Council considered imposing an 80 cent tax, the Institute sprang into action, coordinating strategy sessions with stakeholders, including convenience store owners who would be severely hurt by such a tax. Ultimately, the City Council voted down the tax increase, despite impassioned pleas from the local public school leadership, by a vote of 6-3. More dramatically, as a result of the Institute study, the city of Christiansburg is considering rolling back its cigarette tax to see if it would bring “lost business” back.
Virginia’s Medicaid battle remains less decisive. After a 15-seat loss in the 2017 elections, the Republican House leadership moved to support Medicaid expansion, as the Republican Senate held firm against expansion by one vote. The Institute brought in outside experts to showcase skyrocketing costs in expansion states; conducted two Medicaid strategy sessions; and issued columns, letters, and one-on-one discussions offering alternative solutions. The General Assembly returns in late May.