Is it a fee or a tax?

Posted at 1:33 PM on May 16, 2006 by Bob Collins (1 Comments)

We'll find out in a half hour when the Supreme Court rules. Should throw the Legislature into a tizzy one way or the other.

Decision will be available here at 2.

Update 2:04 p.m. - The fee stays. Big win for Pawlenty. But it could complicate the end of the session.

The court said:

The imposition of the Health Impact Fee under Minn. Stat. § 256.9658 (Supp. 2005) does not violate the 1998 settlement agreement between respondent tobacco companies and the state because the terms of the settlement agreement do not unmistakably relinquish the state legislature’s sovereign authority to impose such an exaction on tobacco products in order to recover health care costs related to the use of tobacco products and to discourage smoking.

In particular, note Justice Alan Page's apparently swing at the Legislature (or gov or both) in his concurring opinion:

Now, with the imposition of the Health Impact Fee and the pass-through of that fee/tax to the consumer, smokers are once again paying for the state’s smoking-related health care costs – the same costs one could reasonably have hoped were being paid for by the tobacco companies through the 1998 settlement. On the record before us, it cannot be determined whether the settlement payments, combined with the Health Impact Fee, exceed the state’s smoking-related health care costs. But, to the extent that what smokers who are not parties to the settlement agreement pay towards the settlement payments and the Health Impact Fee exceeds those costs, this scheme exacts a direct, although hidden, tax on smokers to fund any manner of nonsmoking-related state expenditures. This hidden tax is neither imposed on nor borne by any other Minnesota taxpayers. Thus, I find this scheme troubling.

Kind of like a "hey, where's the money from the settlement?" statement. Where, indeed?

I'm thinking his use of the term "scheme" -- and all that implies -- was not by accident.

Comments (1)

Yesterday's Supreme Court ruling allowing the state to continue charging a ‘health impact fee’ on tobacco products means that more Minnesotans will quit smoking this year.

The American Lung Association of Minnesota has seen less smoking in every state that raises the cost of tobacco products, and this is especially true of younger smokers who are not yet hooked on tobacco.

Now that this matter is settled, it is time for Minnesota to go smokefree by passing a strong statewide law that protects all workers’ health fairly and equally.

Posted by Bob from ALAMN | May 17, 2006 3:41 PM

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