City of Gunnison leaders are eyeing a potential tax question on this year’s ballot — this time, for tobacco and nicotine products — as part of a larger effort to curb use among youth.
“We’ve never seen tobacco use this high with our young people, so it’s definitely a concern,” said Gunnison County Substance Abuse Prevention Project (GCSAPP) Director Kari Commerford, who noted the only other substance with such a high level of use among youth in Gunnison County is alcohol.
Following recent moves by the state legislature, city leaders on July 9 discussed the possibility of pursuing the special tobacco tax in Gunnison.
House Bill 19-1033 was approved by the Colorado legislature this year and signed by Gov. Jared Polis. The bill gives local governments authority to regulate the sale and possession of nicotine products to minors — and also allows counties and municipalities to impose a special sales tax on cigarettes, tobacco and nicotine products.
According to City Attorney Kathy Fogo, increasing the age for purchasing from 18 to 21 as well as a requirement for establishments selling tobacco products to purchase an annual license could both be enacted through a local ordinance.
However, if city leaders pursue imposing a special tax on tobacco and nicotine products, the measure would have to go to a vote.
At least three other Colorado municipalities — Basalt, Aspen and Avon — have already approved taxes and age restrictions. All three municipalities raised the minimum age to purchase tobacco products to 21.
The City of Avon reportedly has netted about $600,000 in additional revenue from the tax on tobacco and nicotine products since the new law was enacted. The City of Aspen generated $436,000 during 2018 from its tax.
“That’s real money and it’s a hefty tax,” said City Manager Russ Forrest of the potential funds that could fill city coffers.
Finance Director Ben Cowan said if the city were to remove the current exemption on nicotine products in the sales and use tax code, a four percent tax on those products would result, distributed between the city’s general fund and Parks and Recreation. The general fund would receive approximately $30,000 and Parks and Recwould receive around $43,000.
Yet, Fogo also pointed to the current excise tax on tobacco already in place in Colorado, which is currently distributed to local municipalities. In 2018, the City of Gunnison received $14,824.70 in cigarette tax distribution from the state.
If the city were to pass the additional tax this year, those funds from the state would no longer be doled out.
“We have seen over the last few years that the number of youth who reported using tobacco products, including snuff or dip, has stayed or decreased to about six percent,” explained GCSAPP’s Commerford. “But when you look at the youth vaping rates for lifetime use, you’re looking at about 43 percent.”
Additionally, health and safety information provided by the federal Food and Drug Administration is lacking — leading to a misperception of vaping being a safe alternative to cigarettes, said Commerford. She also emphasized that youth in Colorado are using nicotine products at twice the rate seen nationally.
While an assessment by the Colorado Department of Public Health and Environment found one of the best preventative practices is increasing price, consumption in city limits can be complicated, she said.
Anecdotally, youth at Gunnison High School have reported access to products such as vape pens is easy, even if they aren't of age. Students venture online and have even utilized “credits” from online gaming to acquire tobacco products, and vape pens can be purchased online with little oversight, said Commerford.
Cowan stated that based on the population of Gunnison, an estimated 204,000 packs of cigarettes are sold annually. According to the National Tobacco Board, the average price per pack of cigarettes is $5.26.
Based on those numbers, Cowan estimates businesses within the city see $1 million in gross sales.
Yet, Mayor Jim Gelwicks questioned the effectiveness of a new tax on the products — especially since it wouldn’t apply county-wide.
“My guess is that all you’d do is find Tomichi Tire selling cigarettes,” said Gelwicks of potential shops outside city limits that could evade higher prices within the municipality.
City leaders agreed to continue discussions in coming weeks before deciding whether to place the question on the ballot this year.
(Kate Gienapp can be reached at 970.641.1414 or firstname.lastname@example.org .)