How Did Big Tobacco Influence A Plan To Increase NC’s Taxes On Vaping Products?

A plan to substantially increase taxes on vaping products in North Carolina initially received bipartisan support at the General Assembly last week before a powerful lobbyist thwarted the plan. Lawmakers from both parties called the behind the scenes effort both unusual and disingenuous.

Last Wednesday, lawmakers in a House Finance Committee meeting voted to support an amendment to raise the excise tax on vaping products to 12.8%. The current tax is five cents per milliliter of consumable product. The proposal came as the nation deals with vaping-related health problems. According to a recent CDC report, there have been 37 deaths and nearly 2,000 illnesses associated with vaping.

Wake County Democrats Gale Adcock and Cynthia Ball were behind the provision, which would have generated an estimated annual $16.5 million for a newly created Tobacco Use Prevention Fund.

But the amendment didn't last long. Hours later, Adcock and Ball were summoned to the office of powerful House Rules Chairman David Lewis (R-Harnett), according to a group of five bipartisan legislators who were either present at the meeting or had direct knowledge of it. Several of those legislators asked that their names not be used, out of fear of reprisals from House leadership.

At that meeting was David Powers, a lobbyist for Reynolds American, a tobacco company that produces vaping products. While it is not uncommon for lobbyists to participate in stakeholder meetings, multiple legislators at the meeting said they had no indication Powers would be there. One legislator said that his presence amounted to an ambush, while a Republican lawmaker called it "highly inappropriate" and a Democratic lawmaker described it as a "set-up."

According to multiple sources, Powers agreed to work with the Democratic lawmakers to find a middle ground on the tax increase, and the sides scheduled a meeting for the next morning.

However, that never happened. The vaping amendment was stripped out of the bill later that day before Powers and the legislators ever had a formal meeting. A new version of the bill, without the vaping tax increase, was approved in a House Rules Committee that evening. And that version of the bill was time-stamped from earlier in the afternoon, prior to the legislators ever meeting with Powers or hearing his pledge to negotiate in good faith.

Powers, who also serves on the UNC Board of Governors, did not return WUNC's calls seeking comment.

The next day, Rep. Adcock tried to reintroduce her amendment on the House floor. But Speaker Tim Moore (R-Cleveland) ruled it out of older, declaring the content of her amendment was not germane to the bill.

Lawmakers from both parties described the meeting as highly unusual and said they were disappointed in how the process played out.

“To be so bold about it, it's very unusual,” said House minority leader Darren Jackson (D-Wake). “For a decision to be made and then basically have people summoned to a meeting. It shows the power that some lobbyists have.”

Any potential future change to vaping excise taxes will almost certainly need the support of Republicans. And there are some who are in favor of taking more time to study the issue and consider unintended consequences.

“I think it's a good provision,” said Republican Julia Howard (R-Davie). “It is probably something that needs to be addressed. It's a pretty complicated issue that needs to be addressed. And it will be.”

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