January 10, 2005
Update from the States: Tobacco Taxes and Smoke-Free Policies in Action
The past few years have produced unprecedented advances in tobacco-control policies, particularly with excise tax increases and the implementation of new clean indoor air laws. The gains that have been made in both of these areas recently have continued in the 2004 state legislative sessions.
Since 2002, 33 states, plus the District of Columbia and Puerto Rico, have increased their excise taxes on tobacco products. The average state tax on a pack of cigarettes is now over 74 cents per pack, nearly twice what it was just a few years ago. The highest tax in the country is in New Jersey, at $2.05 per pack, while nearby New York City has a combined city and state tax of over $3 per pack.
Although there have been fewer increases passed in 2004, some of them have come where they were most needed: in the heart of tobacco country. In February, Virginia increased its tax to 35 cents per pack — low by national standards but much higher than the 2.5 cent per pack tax that had been on the books since 1964. And in May, Alabama increased its tax by 26 cents per pack.
These increases will not only help ease states’ financial woes, but, more importantly, serve as a strong incentive to reduce tobacco consumption. Studies show that for every 10 percent increase in the price of cigarettes, youth smoking goes down by seven percent and overall smoking goes down by three to five percent.
Similar progress has been made in passing comprehensive clean indoor air laws. This July, a new law will go into effect in Idaho banning smoking in most workplaces, including restaurants. Idaho will become the eighth state with a strong statewide law in place. California, Connecticut, Delaware, Maine and New York have banned smoking in all workplaces, including restaurants and bars. Florida and Utah, like Idaho, have strong state laws that exempt bars. These states join hundreds of cities across the country that also ban smoking in most public places.
As with tax increases, recent advances with smoking bans have come in the heart of tobacco country. Although opponents challenged it all the way to the Kentucky Supreme Court, a new law banning smoking in all public places, including restaurants and bars, went into effect in Lexington, Ky., in April. In many ways this is the highest profile smoking ban in any city in a tobacco growing state.
With the combined state and city smoking bans, over 30 percent of the country’s population now live in a jurisdiction covered by a comprehensive clean indoor air law. Exposure to secondhand smoke causes nearly 40,000 deaths per year, almost all of which are ischemic heart disease deaths.
There is now a massive amount of evidence showing that smoke-free laws do not harm business or employment in bars or restaurants, and may actually have a positive influence. The latest such evidence comes from New York City, where a report found that in the one year since the city’s comprehensive smoke-free law took effect business receipts for restaurants and bars have increased, employment has risen, the number of liquor licenses has increased, virtually all establishments are complying with the law, and the vast majority of New Yorkers support the law.
With the positive outcomes from both excise tax increases and smoking bans, one can expect to see a lot more of both in the months and years ahead.
What's a pro-tax post doing on a conservative board?
So, with Virginia's 1400% increase, there should be (140 X 7%) decrease in youth smoking, and a decrease of between 420% and 980% in adult smoking.
LOL! I guess that will realy clear the air in the Commonwealth...