A bill proposing a 2-cent increase in the state cigarette tax that would boost funding for the University of Hawaii Cancer Center passed its first hearing before a key Senate committee Monday despite ongoing opposition from retailers who worry about increased shoplifting and lost cigarette sales.
The latest version of House Bill 441 crossed over into the Senate at the midpoint of the legislative session and moved out of the Senate Ways and Means Committee on Monday. If approved this year and signed into law, Hawaii’s per-cigarette tax would jump to 18 cents from 16 cents on Jan. 1.
The increase would go to the Hawai‘i Cancer Research special fund while simultaneously making it more expensive to buy cigarettes across the islands, with the goal of reducing cancer rates.
But UH officials have pushed back against a Senate amendment to HB 441 that would dedicate the additional 2-cent tax to reducing the cancer center’s debt on capital improvement costs.
Cigarette tax revenue funded construction of the cancer center and its efforts to fight cancer, including reducing tobacco use.
“However, due to the success of smoking cessation efforts, this allocation has declined, indicating both progress in public health and a concerning decrease in resources for the initiatives that have fueled this advancement,” according to testimony submitted to the Ways and Means Committee by Cancer Center Director Naoto Ueno and UH Manoa Provost Michael Bruno.
“Now providing less than half the funding compared with that of 2009, this source of allocation is no longer able to support its original intent to provide a top-notch facility, and to invest in the most promising cancer research, clinical care and community outreach.”
Increasing the cigarette tax to fund the cancer center has been endorsed by state agencies including the Department of Health and health organizations such as The Queen’s Health Systems, Hawai‘i Public Health Institute, American Cancer Society Cancer Action Network, American Heart Association and 38 people who submitted individual testimony of support.
Opposition includes testimony from Tina Yamaki, president of the Retail Merchants of Hawaii.
She wrote that an increase in the cigarette tax would disproportionately burden lower-income smokers, “who are already struggling with the high cost of living in Hawai‘i.”
A higher tax also could hurt small businesses, leading to job losses and potential business closures “in an already fragile economic climate,” Yamaki said.
They could also lose cigarette sales through increased shoplifting and from the loss of customers who might ask military friends and family to buy them tax- exempt cigarettes through Hawaii’s military bases, she said.
Yamaki also criticized linking cigarette sales to fund cancer center research.
“Cigarette consumption has been steadily declining due to increased awareness and existing tax measures,” Yamaki wrote. “Tying funding for critical research and other special funds to an unstable revenue source creates long-term financial uncertainty for the Hawai‘i Cancer Research Special Fund. Alternative, more sustainable funding mechanisms should be considered for this or any other special fund.”
A separate Senate bill, SB 1204, would have forced the cancer center to merge with the UH medical school, which UH previously said would jeopardize the center’s accreditation.
SB 1204 appears dead this session.
It represented the latest effort by state Sen. Donna Kim, who chairs the Senate Higher Education Committee, to merge the cancer center with UH’s John A. Burns School of Medicine and have the center’s director report to the medical school dean.
A similar bill Kim introduced in 2020 was opposed by then-UH President David Lassner.
Earlier this legislative session, new UH President Wendy Hensel told Kim and other members of the Senate Higher Education Committee that UH would return with a recommendation over whether to merge the cancer center into JABSOM.
