Amid fiscal turmoil, House votes to cut tax on loose-leaf tobacco

As many places across the country raise tobacco taxes — in an effort to reduce usage and save on public health costs down the road — the Texas House has gone in the other direction.

Members of the Texas House on Wednesday approved a bill to lower a tax on Red Man and other brands of loose-leaf chewing tobacco.

When Rep. Allan Ritter, R-Nederland , laid out House Bill 2599, one freshman House member from Central Texas couldn't believe his ears.

"I just had to clarify. It's cutting taxes to chewing tobacco?" a shocked Rep. Jason Isaac, R-Dripping Springs, asked from the floor.

Isaac was the only member to question the measure, which passed 83-53.

"We just created an incentive for people to use cancer-causing products," Isaac said after the bill was approved. "When we have the fiscal problems that we have, it's wrong to be cutting taxes on products like chewing tobacco."

The bill would reduce the tax rate on some forms of chewing tobacco from the current $1.13 per ounce to 80 cents per ounce.

Ritter said his bill corrects an unfair tax that's been levied on pouches of loose-leaf tobacco since the Legislature in 2009 created a weight-based tax on tobacco products other than cigarettes and cigars. The result: Heavier loose-leaf tobacco products were unfairly affected, Ritter said.

"It destroyed an industry," Ritter said.

Dan Mulvaney, the director of government affairs for the tobacco company Swedish Match, said that since the 2009 law went into effect, sales of loose-leaf tobacco plummeted 50 percent.

Ritter said his measure "brings back fairness."

Ritter said the price for a pouch of tobacco jumped from about $3.75 to around $10. Meanwhile, the price of tins of Skoal and other types of snuff or dip didn't increase as much because they weigh about a third as much as a pouch of loose-leaf tobacco.

When Isaac asked Ritter during the brief discussion on the floor if he thought the bill would lead to increased tobacco usage in Texas, Ritter said it would.

Isaac asked Ritter if he was OK with that, and Ritter responded, "I'm very happy with that."

Ritter said in an earlier interview that "for all of us that chew tobacco, it's a damn good thing."

An official state analysis of the bill also says that the proposed tax change would increase consumption of chewing tobacco and that sales "would rebound sufficiently" so that the state's tax coffers wouldn't be negatively affected.

Mulvaney said Texas would recapture the sales tax revenue from tobacco users who buy out of state. He said he was unsure if more Texans would chew if the bill passes.

Isaac said the state ultimately would end up worse financially if Ritter's bill becomes law. More chewers of tobacco would lead to additional long-term health costs as the state ends up dealing with more people with tobacco-related health problems.

The Senate still has to take up the measure. Ritter said he has heard that some senators might be interested in carrying the bill there.

By Tim Eaton