Basalt residents, visitors are smoking, vaping and chewing more tobacco products than anticipated
Town will increase funds awarded for prevention, education, counseling
Basalt is collecting much more than anticipated from a tax on tobacco products so the town government is seeking additional ways to put the revenue to good use.
The town collected about $730,000 in 2021 on a $2 per pack tax on cigarettes and a 40% tax on other tobacco products. That was up 32% from the $553,000 collected the prior year.
Basalt voters approved the tax in April 2018 with revenue earmarked for mental health services, including counseling for people with addictions to tobacco, drugs and alcohol. It passed by a 75% to 25% margin. Basalt became the second municipality in Colorado to tax tobacco products, following Aspen’s footsteps.
“We thought the money was going to be quite a bit less,” said town manager Ryan Mahoney. The tax was projected to raise about $480,000 annually in the early years of the tax and a declining amount with time. Instead, the tax revenue is growing even though the tax rate has remained the same.
On one hand, the increase is disturbing because it means more midvalley residents and visitors were smoking, vaping and chewing tobacco products in 2021. On the other hand, there is more revenue for vital services.
“I am personally bummed by how much money we’re taking in through the tobacco tax but I want to use (the funds),” councilman Gary Tennenbaum said at Tuesday’s council meeting.
The town gave $100,000 to the Roaring Fork School District last year to fund a mental health and behavioral health therapist at Basalt Elementary School. Eagle County provides funds to the school district for mental health providers for the high school and middle school in Basalt.
In addition, Basalt provided $150,000 to the Aspen Hope Center last year for various counseling programs.
Both of those donations will be renewed.
Also in 2021, Basalt gave $80,000 in grants of up to $10,000 to nonprofit organizations that serve Basalt and have programs related to tobacco use prevention or cessation. (See the list of organizations that received grants in the sidebar.)
In 2021, Basalt gave $10,000 grants to seven nonprofit organizations and a $2,500 grant to another group. The funds from the tobacco tax are supposed to be used for prevention and treatment efforts in substance abuse as well as mental health services.
The groups receiving $10,000 grants last year were:
A Way Out
Access After School
The Buddy Program
Youth Zone — Truancy Task Force
Aspen Strong Foundation received a $2,500 grant.
In addition, the town gave $100,000 to the Roaring Fork School District and $150,000 to Aspen Hope Center for counseling services.
Mahoney said the town government would increase the dollars it gives in grants in 2022 since the extra revenue has created a large reserve in the tobacco tax fund over the past three years. Applications will be accepted later this year and evaluated by a special board.
“The balance is about $1 million,” Mahoney said. The idea is to spend those funds on applicable causes, not bank them, he said.
Mahoney said the town wouldn’t use all the revenue because the future income from the tobacco tax remains unknown.
“I’m not convinced that (higher revenue than anticipated) will be forever,” he said.
In March 2018, the Basalt council also voted to raise the minimum age to buy cigarettes and tobacco products from 18 to 21. It also required retailers to get a license to sell tobacco products each year.
Raising the minimum age and boosting the price of products through a tax were supposed to provide deterrents to use of tobacco products, but the soaring revenue indicates that is not necessarily the case. Mahoney said he thinks an influx of tourists and new residents may be responsible for the increased revenue.