Kids Win as Georgia Increases… | Campaign for Tobacco-Free Kids
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Kids Win as Georgia Increases Cigarette Tax, But More Should Be Done

Statement by William V. Corr Executive Director, Campaign for Tobacco-Free Kids
May 06, 2003

Washington, D.C. — By raising Georgia's cigarette tax by only 25 cents to 37 cents a pack, the Georgia Legislature has taken a small step forward, but fallen far short of the cigarette tax increase proposed by Gov. Perdue – and far short of what is best for Georgia and its kids. Higher cigarette taxes are a proven way to reduce smoking among both kids and adults, save lives and save millions of taxpayer dollars by reducing smoking-caused health care costs. Georgia would see even greater benefits if it raised the cigarette tax to 87 cents – the amount recommended by public health advocates – or if they adopted Gov. Perdue's original proposal to raise the cigarette tax to 58 cents a pack.

By increasing the cigarette tax by 75 cents rather than 25 cents, Georgia would have raised an additional $278 million annually in new revenues, prevented some 62,300 more kids from becoming smokers, saved 28,800 more residents from smoking-caused deaths, and produced $1 billion more in long-term health care savings. We urge Georgia's leaders to further increase the cigarette tax at the earliest opportunity.

With Georgia's new 25-cent increase, the state moves from having the 47th highest cigarette tax among the states to 33rd. Not only do 32-states maintain a higher tax, Georgia's ranking is likely to fall again later this year as other states increase their cigarette taxes. One prominent Merrill Lynch tobacco analyst estimates that 21 states will raise their cigarette taxes this year, and that the national average will rise from 67 cents to 82 cents.

Georgia's increased tax on smokeless and other tobacco products is also a step forward, but more can be done to make this tax more proportionate to the cigarette tax. A parallel increase for other tobacco products discourages those who quit smoking or refrain from starting from using other tobacco products. Georgia has increased its smokeless and cigar tax to 10 percent of the sale price, but a 17 percent tax would have made the price increases on other tobacco products match the price increases of cigarettes.

Tobacco use is the leading preventable cause of death in Georgia, taking the lives of over 10,000 Georgians every year. More than 20,000 Georgia kids become regular daily smokers each year, and one-third of them will die a premature death from tobacco use. The state's annual tobacco-caused healthcare costs are $1.75 billion.

Southern states in general, and tobacco producing states in particular, continue to have cigarette taxes that lag behind the rest of the nation. Excluding Georgia, the average tobacco tax among major tobacco producing states is only 7.5 cents per pack – almost 60 cents per pack less than the average among states. North Carolina, Kentucky and Virginia have rates of only five, three, and 2.5 cents per pack respectively.

Tobacco states would obtain enormous benefits from raising their tobacco tax rates to the average. Studies show cigarette tax increases do not harm southern state economies. Revenue from a significant tax increase would far exceed the revenue currently being gained by low tax states through cross border sales. In addition, a tax increase will have little to no negative impact on tobacco farming communities.