LANSING, Mich. (Michigan News Source) — Gov. Gretchen Whitmer is asking tobacco and vape users to shoulder the cost of Michigan’s Medicaid shortfall, reviving a tax idea she’s failed to push through before.

The proposal, expected in the governor’s budget plan this week, follows Medicaid financing changes enacted under the Trump administration that restrict certain state funding mechanisms used to leverage federal dollars. 

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State officials project that federal Medicaid financing limits will reduce Michigan’s funding in the coming years.
Whitmer’s budget plan would respond with program changes and additional revenue from tobacco and vape taxes. Specific figures, however, have not been disclosed.

The move would revive last year’s stalled proposal for a wholesale tax on vaping products—then pitched as a $57 million-a-year boost split between smoking cessation efforts and Medicaid.

Republicans were quick to push back. Senate Minority Leader Aric Nesbitt said the state should tap surplus revenue instead of raising taxes, calling the plan another cash grab.

“It will NEVER be enough for them,” Nesbitt said. 

 

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If adopted, the plan would mark the second straight year lawmakers leaned on “sin taxes” for revenue, following last year’s new marijuana tax.

Whether nicotine is next now rests with a divided Legislature.