Tobacco tax increase-Medicaid funding.                                                                                                           06LSO-0128.C3

 

FISCAL NOTE

 

	FY 2007	FY 2008	FY 2009
NON-ADMINISTRATIVE IMPACT
Anticipated Revenue Increase (Decrease):
EARMARKED REVENUE	8,680,000	16,420,000	16,420,000
GENERAL FUND	(220,000)	(220,000)	(220,000)
LOCAL SOURCES FUND	(30,000)	(30,000)	(30,000)

 

Source of revenue increase: Increase in the cigarette tax ($.40 per pack), increase in excise tax rate on wholesale purchase of tobacco products (from 20% to 33.33%), and increase in excise tax rate on retail price of tobacco products (from 10% to 16.67%).

 

Source of revenue decrease: Decrease in consumption of cigarettes and other tobacco products.

 

Assumptions:

 

Revenue increases from additional $.40/pack cigarette tax are based on revenue increases experienced by the state in FY 2004 and FY 2005 from the recent $.48/pack cigarette tax increase that went into effect July 1, 2003.

 

Revenue increases from excise tax rate increase on other tobacco products are based on average of tax collected on other tobacco products in FY 2004 and FY 2005.

 

The revenues from the proposed $.40/pack cigarette tax increase and the excise tax rate increase on other tobacco products shall be distributed to and continuously appropriated to the Department of Health for the Wyoming Medical Assistance and Services Program created by title 42, chapter 4 of the Wyoming statutes.

 

A one percent reduction in cigarette and other tobacco product consumption is assumed, based on the actual reduction in cigarette consumption experienced by the state from the recent $.48/pack cigarette tax increase that went into effect July 1, 2003. As reflected in the above estimates, this reduction in consumption would result in a revenue decrease to the General Fund and local governments.

 

Prepared by:   Dean Temte, LSO Phone:   777-7881

(Information provided by Dan Noble, Dept. of Rev.; phone 777-5220)