Campaign Opposes HUD Grants to Indian Smoke Shops

Jan. 24 2000

Washington, DC - The CAMPAIGN FOR TOBACCO-FREE KIDS today expressed disappointment in the U.S. Department of Housing and Urban Development’s decision to award $4.2 million in community development grants to four American Indian tribes to build “smoke shops” that sell discounted cigarettes.

In a letter to President Clinton, CAMPAIGN President Matthew L. Myers urged the President “to take immediate action to ensure that this matter is quickly corrected.” The letter also urged the President to “institute Administration-wide measures to ensure that no federal agency supports cigarette sales anywhere in the United States or overseas, either intentionally or inadvertently.”

According to a USA TODAY report, the four tribes have used the HUD funds to build five shops in Oklahoma and one in Nevada. The tax-free status of the tribes allow them to sell cigarettes at discounted prices, undercutting tobacco-tax increases in neighboring states that are designed to reduce tobacco use.

“These grants are totally inconsistent with your Administration’s policy of preventing youth smoking and reducing the deadly and costly toll of tobacco in our country. As you have frequently stated, higher cigarette prices and taxes are one of the most effective means of reducing smoking rates, especially among youth,” Myers wrote to the President.

The full text of the letter follows:

Dear Mr. President:

The Campaign for Tobacco-Free Kids was disappointed to learn that the U.S. Department of Housing and Urban Development has awarded $4.2 million in community development grants to four American Indian tribes to build stores that specialize in selling tax-free cigarettes and other tobacco products. These grants are totally inconsistent with your Administration’s priority of preventing youth smoking and reducing the deadly and costly toll of tobacco in our country. As you have frequently stated, higher cigarette prices and taxes are one of the most effective means of reducing smoking rates, especially among youth. Grants that subsidize and encourage the sale of low-cost tobacco products on Indian reservations directly undermine such efforts. We urge you to take immediate action to ensure that this matter is quickly corrected.

The scientific consensus is that every 10 percent increase in the real price of cigarettes reduces overall cigarette consumption by approximately three to five percent and youth smoking by about seven percent. These declines translate into substantial decreases in smoking-related disease, death, and health care costs. But such gains are quickly lost if cigarette price increases are undercut by access to tax-free cigarettes.

While creating new jobs in poor communities is a worthy goal, the new jobs should not also promote the death, sickness, and costs caused by smoking. It is especially ironic that these “community development” grants support new tobacco-selling ventures by Indian tribes. Native Americans already suffer from the highest smoking rates of any racial-ethnic group in the United States, with all the corresponding health and economic consequences. More than 36 percent of all Native American adults smoke, compared to less than 25 percent of all U.S. adults. The federal government should not be compounding this public health tragedy.

Historically, these tribal stores also have too frequently been used to facilitate tax-free sales to non-Indian buyers and cigarette smuggling. While Indian tribes that sell cigarettes are supposed to collect state cigarette taxes from all buyers who are not members of their tribe, they frequently do not.

HUD spokespersons have tried to justify the grants by saying that the Department “cannot bar the sale of legal products without congressional authority.” But there is a massive difference between not banning cigarette sales and actively encouraging them. The United States should not be financing the creation of new tobacco sales outlets that are expressly designed to offer cigarettes at discount prices.

For all of these reasons, we ask that you direct HUD to restructure its grants to the Indian tribes to support truly constructive economic development projects. We also urge that you institute Administration-wide measures to ensure that no federal agency supports cigarette sales anywhere in the United States or overseas, either intentionally or inadvertently.

Sincerely,

Matthew L. Myers,
President
Campaign for Tobacco-Free Kids

 

 

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