COLUMBUS, Ohio — Cuyahoga County arts advocates are leading an effort to amend the pending state budget bill to expand an existing cigarette tax that helps fund local arts programs.
The advocates want to change the tax from a flat 30 cents per pack of cigarettes sold to an 8% tax on wholesale sales volumes. They also want to broaden the tax so it applies to sales on all tobacco products, including vaping, according to Fred Bidwell, chairman of the Arts and Culture Action Committee, which is pushing for the change. Backers of the request estimate the change would effectively double the money the tax generates, which they said would make up for dwindling revenues tied to declining smoking rates.
If state lawmakers agree to allow the change, it then would need approval from local voters to take effect. The arts organizations also want legislators to change state law authorizing Ohio’s 14 other most populous counties to seek approval for similar taxes. Under current law, only Cuyahoga County residents can enact such a tax.
The effort to change the tax pre-dates the emergence of COVID-19, but Fred Bidwell, chairman of the Arts and Culture Action Committee, said the pandemic has left arts organizations across the state in dire financial straits.
“It’s a dramatic impact, “ he said. “And really across the board, particularly with performing arts, it’s just devastating. It’s basically gone to zero revenue.”
Bidwell, a retired ad man who has become a major supporter of arts in Greater Cleveland, testified on Thursday about the request to members of the Ohio House Finance Committee who are reviewing Gov. Mike DeWine’s two-year, $74.6 billion budget proposal. DeWine, a Republican, has said he set up his budget plan to contain no major tax changes, including tax increases. The budget must be finalized, which requires approval from the House and Senate, by a June 30 legal deadline.
Committee members asked no questions of Bidwell. The state legislature is controlled by Republicans who generally are philosophically opposed to tax increases.
Arts advocates on Thursday also sent a letter to Ohio House Speaker Bob Cupp and Ohio Senate President Matt Huffman, both Lima Republicans, requesting that lawmakers consider adding the change to the state budget. The letter was signed by representatives of more than 80 arts organizations across the state, including the Cleveland Orchestra, the Cleveland International Film Festival, the Cincinnati Ballet, the Dayton Society of Natural History and the Oberlin Center for the Arts.
The current tax in Cuyahoga County was authorized through a 2006 state law change, which allowed Cuyahoga County residents to seek voter approval for a cigarette tax to fund arts programs and cultural institutions. It initially generated $22 million a year, according to Bidwell. It now generates around $11 million because of declining cigarette sales, he said.
The 10-year tax last was approved in 2015 with 75% approval. Since its inception, it has raised $207 million for grants made to 435 local nonprofit organizations.
Alex Boehnke, a lobbyist with the Ohio Association of Convenience Stores, an affiliate of the Ohio Council of Retail Merchants, said allowing more counties to tax cigarettes differently would create a nonuniform business environment across the state.
“Any time we’re dealing with different taxes and fees, that’s a challenge for businesses. This is no different,” Boehnke said. “Cuyahoga County has had this for some time. However any time you have a patchwork of regulations taxes and fees, that makes commerce difficult.”
Critics of “sin taxes” like taxes on cigarettes argue they disproportionately affect the poor. Since smoking rates have declined over the long term, taxes on tobacco use also represent a diminishing funding stream.
Asked why arts funding should be tied to cigarette sales, Bidwell said it discourages a behavior with a harmful social effect.
“This tax has undoubtedly saved thousands of lives and millions of dollars in health-care costs,” he said. “Long term, we believe that public funding for the arts is very important for Cuyahoga County, and we’ll be looking for alternative methods, but the voters have indicated that they approve of this vehicle.”
If lawmakers grant approval to expand the tax, Bidwell said advocates are targeting a ballot request in November 2021 or Spring 2022.