Newspaper article Charleston Gazette Mail

Tobacco Tax Foe Switches for PEIA

Newspaper article Charleston Gazette Mail

Tobacco Tax Foe Switches for PEIA

Article excerpt

A longtime legislator with a consistent record of voting against tobacco tax increases said Wednesday he plans to sponsor legislation next session to increase West Virginia's cigarette tax by $1 a pack. Delegate Frank Deem, R-Wood, said he believes the $1-a-pack increase is a "win-win scenario, providing an estimated $112 million of additional revenue annually that could be used to offset pending severe cuts in benefits for Public Employees Insurance Agency insurees while also giving smokers additional incentive to quit.

"I think it's the way to go, Deem said. "You can put all the blame you want on the [PEIA] Finance Board, but the fact of the matter is, we're going to have to raise the premiums.

Last Thursday, the Finance Board approved $120 million in "draconian benefits cuts for the 2016-17 plan year, with sharply higher co-pays, deductibles and out-of-pocket maximum costs for insurees, as well as a premium increase for retirees.

Under state law, which requires an 80-20 ratio of employer to employee premiums, the Finance Board cannot increase active employee premiums unless the governor and Legislature provide additional funding for employer premiums.

For the past three years, there has been no additional state funding for the employers' share of premiums, and Gov. Earl Ray Tomblin's proposed 2016-17 budget would keep that contribution at $422.4 million for a fourth consecutive year.

Deem said he disagrees with legislative leaders who criticized the Finance Board after last Thursday's vote.

Senate President Bill Cole, R-Mercer, issued a statement saying, "West Virginia's taxpayers will not be left to hold the bag for the bad decisions and poor management of the political status quo, including this PEIA Finance Board.

Deem countered, "It's not the Finance Board's fault. It's not the teachers' fault, and it's not the public employees' fault. …

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