Proposition EE - Cigarette Tobacco and Nicotine Products Tax

Summary

Proposition EE creates a tax on nicotine liquids used in e-cigarettes and other vaping products that is equal to the total state tax on tobacco products when fully phased in, incrementally increases the tobacco products tax by up to 22% of the manufacturer''s list price, incrementally increases the cigarette tax by up to 9 cents per cigarette, expands the existing cigarette and tobacco taxes to apply to sales to consumers from outside of the state, establishes a minimum tax for moist snuff tobacco products, and creates an inventory tax that applies for future cigarette tax increases. The additional tax revenue will initially be primarily used for public school funding to help offset revenue that has been lost as a result of the economic impacts related to COVID-19 and then for programs that reduce the use of tobacco and nicotine products, enhance the voluntary Colorado preschool program and make it widely available for free, and maintain the funding for programs that currently receive revenue from tobacco taxes, with the state keeping and spending all of the new tax revenue as a voter-approved revenue change.

A "YES" vote on Proposition EE is a vote in favor of creating a tax on nicotine liquids and increasing existing tobacco taxes as a means to generate revenue that will be used to support public schools, preschool programs, and other initiatives currently receiving tobacco tax revenue.

A "NO" vote on Proposition EE is a vote against taxing nicotine liquids and increasing existing tobacco taxes.

Arguments

Colorado has one of the highest rates of youth vaping in the country, while also having one of the lowest tax rates on cigarettes and tobacco products, and no tax on vaping products. Cigarettes, tobacco, and nicotine products are addictive and have negative health impacts, which can include cancer as well as heart and lung disease. Tax increases usually result in higher prices, which deter smoking and tobacco use, especially among youth and young adults. Higher taxes on cigarettes, tobacco products, and vaping products could decrease consumption while funding health care, and tobacco cessation, education, and prevention programs., in support of Proposition EE (Learn more)

Proposition EE provides needed funding for education. The impacts of the COVID-19 pandemic on the state budget have resulted in a 10 percent decrease in the state share of public school funding for the 2020-21 school year. Additional federal funding has helped lessen the impact of this state budget cut in 2020; however, it is not likely to be available next year, and further cuts are expected. The measure provides vital funding for schools as the economy recovers, and additional assistance for small rural districts that are disproportionately impacted by state funding cuts. , in support of Proposition EE (Learn more)

Providing access to free preschool gives all children the same foundation before entering kindergarten. Currently, half of Colorado three- and-four-year-olds do not attend any type of preschool. High quality preschool is shown to improve educational, economic, and health outcomes throughout a child’s life, including higher wages, higher graduation rates, and fewer criminal convictions. Access to preschool also supports working parents by giving them the option to enroll their children in up to ten hours per week at no cost., in support of Proposition EE (Learn more)

Increasing taxes on cigarette, tobacco, and nicotine products imposes a financial burden on people who choose to consume them, particularly low-income users. Because these products are addictive, users may continue to purchase them even after a tax increase. In addition, vaping products are used by many as a way to quit using traditional cigarettes. Youth vaping should be addressed through enforcement of existing age restrictions and additional education and prevention, not through raising taxes on a product that some use as a cessation device., in opposition to Proposition EE (Learn more)

Raising taxes and establishing a minimum purchase price hurts business owners. This is particularly true for businesses that sell low-cost products, or that are in areas of the state where local governments have already imposed cigarette, tobacco, and nicotine taxes. Businesses selling these products may see a decline in sales, which can be particularly harmful for small, local businesses at a time when many are already struggling. Private businesses and market competition are best suited to determine the prices at which products are bought and sold., in opposition to Proposition EE (Learn more)

The state should not be dependent on tax revenue from a specific, addictive product to fund schools, preschool, and other state services. Once Proposition EE is fully phased in, revenue from this tax is likely to decline over time as the increased price results in fewer products being purchased. At the same time, preschool funding needs are likely to grow. A tax intended to decrease consumption is not a funding source on which the state should rely., in opposition to Proposition EE (Learn more)

Measure Details