CDC: States Lag in Boosting Cigarette Taxes

By ALEXANDRA SIFFERLIN | @acsifferlin | March 30, 2012

Hiking up cigarette prices is one of the most effective ways to reduce smoking, especially in youths and young adults. Yet a recent report from the Centers of Disease Control and Prevention (CDC) finds that fewer states are increasing their cigarette excise taxes than in the past.

In 2009, 15 states increased their cigarette excise taxes, but in 2010 and 2011, only eight states increased their taxes, while one state — New Hampshire — decreased it. The CDC reports that increasing cigarette excise taxes reduces cigarette demand overall and helps keeps teens from starting to smoke in the first place. A recent report by the surgeon general found that 1 in 5 U.S. teens is still smoking — the teen smoking rate is falling, but the decline has slowed in recent years — which is why the drop in statewide cigarette excise taxes is so concerning.

“The report reinforces the fact that states are increasing their taxes, but the rate has been declining from year to year. There was a high increase in 2009, but that is dropping,” says Dr. Tim McAfee, director of the CDC’s Office on Smoking and Health.

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According to the report, the national cigarette excise tax increased from $1.34 per pack on average in 2009 to $1.46 a pack in 2011. New York has the highest tax at $4.35 per pack and Missouri has the lowest at $0.17 per pack.

“Look at New York, where a [pack] of cigarettes is $10.50. That’s great, but [it] should be at least $100. It’s the impact on kids that is really important here,” says Joseph A. Califano, Jr., founder and chairman emeritus of the National Center on Addiction and Substance Abuse and former U.S. Secretary of Health, Education and Welfare. “Increasing the tax is incredibly important because teens are less likely to buy them.”

So why are states putting on the brakes? The decline is a serious concern for health experts. Historically, in the 1990s and early 2000s, states that increased taxes also increased funding for general comprehensive tobacco programs. “We are seeing a countertrend in statewide prevention,” says Dr. McAfee. “In the last five years, the opposite is happening. States are lowering their commitment to prevention programs.”

Health officials can only speculate that the poor economy partially accounts for states shying away from increasing tobacco-control funding, but McAfee doesn’t buy it. “There is strong evidence that these programs and taxes work and states will have a strong return on their investments. When looking at it from an economics perspective, there is a concern that states are not reaping the full potential benefit from this tax,” he says.

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The study cites California as an example. In 1988 the state raised its cigarette excise tax, and about $0.05 per pack went to tobacco-prevention programs. During the first 15 years of the program, California invested $1.8 billion of the cigarette excise tax revenue in the program, which coincided with $86 billion in health-care cost savings. Yet, the new report notes that California is one of three states — including Missouri and North Dakota — that has not raised its tax since 2000.

The report comes out on the heels of the CDC’s new anti-smoking ad campaign that features graphic images of individuals suffering health consequences from tobacco use.

“We are trying to fill the deficit between state and government spending on tobacco prevention and the spending from the tobacco industry. We are trying to counteract it,” says McAfee. Currently, states are providing only 12% of what the CDC recommends for tobacco-prevention program funding. “In the first two days of 2012, the tobacco industry spent as much as we are spending on our media campaign for the year,” he says.

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Given the numbers from the Surgeon General’s report, the need for aggressive tobacco control initiatives is all the more apparent. Anti-smoking advocates like Califano would like to see cigarettes eliminated altogether. “We need a ban on cigarettes. We specifically need a ban on menthol cigarettes since there is a rise in their use among teens,” says Califano. “But while we wait for this action, we need to continue to urge higher taxes on cigarettes.”

The 5 states with the highest cigarette excise taxes: