Oct. 3, 2013 —Before adjourning yesterday, legislators created a dedicated funding stream for mental health services, bringing in nearly $150 million over five years through a small increase in the cigarette tax.
Cigarettes will go up 13¢ a pack in 2014 and an additional penny in 2016 and 2018, topping out at a total cigarette tax of $1.33 in 2018.
“This amount allows us to fund all the youth and children mental health services,” said Senate President Peter Courtney, D-Salem, after the session ended.
Courtney championed the cause of mental health funding at the start of the 2013 session, and was dejected when it ended without the dedicated money he was seeking. The passage of House Bill 3601 on Wednesday not only creates the dedicated funding stream, it’s an increase over the amount pitched in July, when a different revenue package failed on the Senate floor.
“I don’t know of any other state that has a dedicated fund for its mental health system,” added Courtney, who expressed regret that the mental health needs of adults will remain unmet, with the state’s prisons serving as de facto housing for people with mental illness. “A large percentage of the people in our prisons are mentally ill. They shouldn’t be there. That is where we are still wanting. We have a long way to go.”
Sen. Jackie Winters, R-Salem, told The Lund Report that the Oregon Health Authority would have wide discretion to use the new mental health dollars, which will amount to roughly $30 million annually, starting next year.
“They’ll come back to us with some ideas in the next session,” Winters said.
In a complicated formula, only the first 10¢ of the tax will be dedicated to mental health from now until June 2015, but all of the new tobacco tax will go toward mental health in the later years.
Most of the votes taken Wednesday required bipartisan coalitions, as members of both parties couldn’t stomach the more controversial measures, like public pension cuts, prohibitions against local restrictions on genetically modified organisms and the tax package.
Rep. Michael Dembrow, D-Portland, told The Lund Report he voted against the GMO bill, but for the other measures even though he saw them as imperfect:
“As part of the leadership, once we voted for the package to go forward, I was committed to its passage,” Dembrow said.
Gov. John Kitzhaber praised the legislative leadership of both parties after his questionable call for a special session proved to be a success: “What we just accomplished in this building represents a stark contrast to what’s being done in our nation’s capitol,” he said.
HB 3601 was still opposed by five Democrats in the House and three in the Senate — including Sen. Jackie Dingfelder and Sen. Diane Rosenbaum of Portland and Sen. Alan Bates of Medford.
Bates told The Lund Report he was concerned that the small business tax cut in HB 3601 might not be fiscally sustainable. He shared concerns of Republican Sen. Betsy Close of Albany that putting a means test on tax deductions for the blind and disabled was unfair public policy. The osteopathic physician also thought the cigarette tax for mental health was a joke if its goal was to reduce smoking.
“The cigarette tax is ridiculous. We should have raised that 75¢ or $1. It would have taken care of everything else,” said Bates. “We’re so scared of the tobacco lobby running an initiative against us that we’re afraid to do what we need to do.”
But Courtney rebuffed members of his own party like Bates who were pushing for a bigger tobacco tax: “My caucus was calling for 25¢, 50¢, 75¢, $1 — there’s no way we were going to get that.”
During his news conference after the session ended, Courtney said that after many long hours of negotiations both at the governor’s mansion in Salem and in Courtney’s office at the Capitol, the breakthrough on mental health funding came in a phone call with Rep. Mike McLane, R-Prineville, who’s the House Minority Leader.
Courtney was in a waiting room at Legacy Meridian Park Hospital in Tualatin, visiting an ailing relative. He called McLane and pitched him on a 15¢ cigarette tax increase. Courtney said the Republican leader responded that he would push his caucus for the dedicated mental health funding source, but McLane countered with the phased in 15¢ increase. He also asked that taxes not be raised on snuff. Courtney hesitated, but accepted.
“You have some people who have to make the last best offer,” he said.
Christopher David Gray can be reached at [email protected].