BY a vote of 4 to 4, the Senate on Monday failed to adopt a committee report recommending the passage of House Bill 23-7, which aimed to “increase government revenue by properly taxing tobacco products.”
Senate President Edith Deleon Guerrero, Senate Vice President Donald Manglona, Sens. Celina Babauta and Paul A. Manglona voted for the adoption of the committee report endorsing the bill’s passage.
Sens. Jude U. Hofschneider, Frank Q, Cruz, Karl King-Nabors and Dennis Mendiola voted no.
Senate Floor Leader Corina Magofna was excused.
Following the roll call vote, the Senate president said, “The committee report is not adopted and is no longer in existence.”
Authored by Rep. John Paul A. Sablan, H.B. 23-7 proposes to increase the tobacco tax to $5 from $3.75. It would also redefine cigarette “as any product that contains nicotine, is intended to be burned or heated under ordinary conditions of use, and consists of or contains (1) any roll of tobacco wrapped in paper or in any substance not containing tobacco; or (2) tobacco, in any form, that is functional in the product, which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette; or (3) any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette.”
Serving as the Senate floor leader in an acting capacity, Babauta made a motion to adopt the Senate Fiscal Affairs Committee’s report on the bill.
For their part, King-Nabors, Hofschneider and Cruz expressed concerns about the bill.
King-Nabors said he initially supported the bill as he and Senate Vice President Manglona worked to include Tinian and Rota as recipients of revenue from a tobacco tax increase. However, he said, “given the new information regarding some of the benchmarks and projections” of tobacco revenue, “I am not at this point willing to support this.”
Cruz said, it doesn’t make sense increasing the tobacco tax when earmarks of tobacco revenue can be suspended during the budget process.
Hofschneider said he has “extreme reservation of having a tax increase in the midst of where we are at today, given the situation with the inflation and everything else associated with the cost of living in the CNMI.”
Other tax-hike measures passed by the House remain pending in the Senate.
