O&A Masthead

Colorado News —
June 2019

Columnist — Joyce Trent

DENVER — Two proposals that would have heavily impacted gasoline retailers failed to make it through the Colorado Legislature.

One called for eliminating the gasoline tax and adding gasoline to items covered by the sales and use tax. The other sought to increase taxes on cigarettes and add a new tax on nicotine vaping products.

Both would have required voter approval.

The resolution to change the taxing method on gasoline was introduced in the Senate where it died in committee.

The second proposal got a little further. It passed the House but was rejected by the Senate.

Colorado flag

The state's revenue from gasoline taxes has not kept pace with the transportation maintenance needs, according to the backers for doing away with the tax. The gasoline tax has remained at 22 cents since 1991 and, with more people turning to hybrid cars, it has generated about half the revenue it did thirty years ago. At the same time, upkeep for the state's roads has doubled in price. The future doesn't look any brighter if the state continues the same method of raising money.

Already the Department of Transportation has a backlog of $9 billion in road and bridge projects. That is expected to hit $25 billion in the next 25 years as the tax revenue continues to decline and the population increases.

Some legislators proposed a better way to raise money for the highways would be to do away with the state gasoline tax and switch to an increased sales and use tax. There was no estimate on how much could be raised and gasoline retailers still would have to collect federal gas taxes.

Those wanting to increase cigarette taxes and add a tax to the routine sales tax on vaping products said they saw it as producing more of a health benefit than as a revenue generating measure.

It would have raised the cigarette tax by $1.75 a pack, making tax on a pack of cigarettes $2.59 and would have raised the tax on other tobacco products to 62 percent of the manufacturer's list price. The same 62 percent would be added to the routine sales tax on all nicotine vaping products, including e-cigarettes.

Voters who would have been asked to give approval, had turned down a cigarette tax increase in 2016. Legislators hoped for a different outcome this time.

The backers of the new cigarette and vaping taxes theorized this would bring in $100 million a year. Part of the money would be used for health and education as well as discouraging smoking and vaping. Studies have shown that Colorado has the highest rate of vaping in the nation. Backers of the tax pointed to a study that concluded that for every one percent reduction in smoking Medicaid would save $2.6 billion a year.

But opponents said it would drive smokers to get their cigarettes from out of state and cause widespread unemployment in the vaping sales industry which has been a good moneymaker for the state. They managed to thwart the measure.

ASPEN — Gasoline retailers here weren't so lucky.

Already burdened with the tightest restrictions on doing business in the state, they now face even more.

The City Council is on track to pass an ordinance that would ban the sale of all flavored nicotine products, ranging from chewing tobacco, cigars and menthol cigarettes to vaping liquids.

The Council first considered the idea in March and last month authorized moving forward despite fierce opposition from convenience stores and other retailers who sell the products.

"When we met with retailers we were met with some pretty significant resistance," admitted C. J. Oliver, city environmental health and sustainability director.

The City of Aspen already has the toughest rules governing the sale of nicotine products. Since January, retailers must pay a license fee of $500 and charge $3 tax on every pack of cigarettes, with the tax slated to rise ten cents a year until it reaches $4 a pack. No one under 21 can sell or buy tobacco or other nicotine items. That should be sufficient deterrence to youth, opponents said.

The owner of a Shell gasoline station already had pulled vaping liquids and devices from his shelves to protect youth. But banning menthol cigarettes and other flavored tobacco products was going too far, said Michael Haisfield.

A clerk at the Aspen Conoco said wintergreen is their most popular Skoal smokeless tobacco flavor and flavored cigarillos come next, not flavors or products generally associated with underage use.

One councilman wanted to wait until having further feedback from retailers affected, but Interim City Manager Sara Ott said that conversation already had been held.

And Councilwoman Ann Mullins said, "I would rather protect kids than cigarette sales."

The initiative is one of several promoted by Risa Turetsky of the Pitkin County Public Health Department and Dr, Kim Levin, medical officer for the county Board of Health.

"Once a child is addicted to nicotine they are a lifetime customer," said Levin.

The ordinance would be the first of its kind for any city in the state, although U. S. Rep Diana DeGette has introduced a measure on the federal level that would ban manufacturing of all flavored nicotine products.

"To me there is no legitimate reason to sell any product with names such as 'cotton candy' or 'tutti fruitti' unless you are trying to market to children," DeGrette said in a press release.

The city is following in the footsteps of San Francisco which won a legal battle over its ban of flavored tobacco.

Convenience stores here already have the burden of assessing a bag tax of twenty extra cents for every plastic bag requested.

And store chains are hobbled by strict new criteria for expansion which city fathers said is necessary to preserve the character of the city by preventing overpopulating of those businesses.

DENVER — Coloradans are used to prices going up in the Spring as oil refineries shut down for maintenance, causing the fuel supply to shrink, but this year prices are rising faster than usual.

In one month, the cost of a regular gallon of gasoline rose twenty-four cents.

"We've seen oil do something of a V shape," said Dan McTeague, an analyst with GasBuddy .com. "A high price, a dip, and then a return to higher prices. In October a barrel of oil went for around $70. At Christmas the price went down to $42 a barrel. We're now heading back to $65," McTeague said. He added that the price hike is intensified by the high American demand for gasoline left over from the low winter prices.

Market uncertainty plays a role with tightened sanctions on Iranian oil, sanctions against Venezuela and OPEC's production cuts, according to AAA. So does the return to summer blends which are more expensive to produce.

GREELEY — Sometimes it doesn't pay to use your head.

Jason Hartley, 43, was arrested recently after he allegedly became so frustrated that the convenience store he wanted to enter was closed that he butted his head against the door several times. Eventually, police said, he broke the glass. He apparently did not get in as he is not accused of theft, only criminal mischief.

He was apprehended after the manager viewed his performance on the store security camera.

The responding officer sent an e-mail of the video to other officers to see if any of them recognized them. One officer did. He had encountered him the same day in an unrelated incident.

Hartley was located at an area hospital where he was being treated for injuries sustained in the other unnamed incident.

Damage to the door was estimated at $1500.

DENVER — QuikTrip is coming to Denver. It will be the first time the Tulsa, Oklahoma-based chain has entered the state.

Management said the convenience store company had considered Colorado for a long time. After they had received many requests from customers who had moved to the mile-high city they took a fresh look at the area and decided it is "really hot in terms of population growth," said spokesman Mike Thornbrugh. "When the state started allowing sale of regular beer in convenience stores "it was the last piece of the puzzle.

"These are the kinds of markets that we think we have a really good opportunity to be successful." He predicted that over time the company would establish many stores here.

The exact location of the first store has not been determined but an advance crew will be coming in soon to lay plans, he said.

QuikTrip has 800 locations over eleven states.

Originally published in the June 2019 issue of the O&A Marketing News.
Copyright 2019 by KAL Publications Inc.

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