Alaska’s Cigarette Tax Increase Is A Victory for Kids and Taxpayers

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

Jun. 25 2004

Washington, DC — Alaska’s leaders have taken an important step toward protecting the state’s kids and taxpayers from the devastating toll of tobacco by increasing the state cigarette tax by 60 cents in the coming year and by a total of $1 per pack over four years. The initial 60-cent increase will take effect in January 2005, raising the cigarette tax to $1.60 per pack. Additional increases of 20 cents a pack will take effect in 2006 and 2007. Increasing the cigarette tax is an important step for Alaska that will reduce smoking among both kids and adults, save lives by reducing smoking-caused disease and raise much-needed revenue to help balance the state budget. However, Alaska would have realized even greater health and revenue benefits if the Legislature had followed Governor Murkowski’s recommendation to immediately increase the cigarette tax by $1, as well as increase the smokeless tobacco tax. We urge the Legislature when it next meets to accelerate the additional cigarette tax increases, as well as increase the smokeless tax. We applaud Governor Murkowski for his leadership in advocating for both the $1 cigarette tax increase and an increase in smokeless tobacco taxes.

Alaska can expect the initial 60-cent increase to prevent some 5,300 kids alive today from becoming smokers, save 2,200 Alaskans from smoking-caused deaths, produce $88 million in long-term health care savings, and raise roughly $17 million a year in new revenue. While these numbers are impressive, an immediate $1 cigarette tax increase would have prevented some 8,900 kids alive today from becoming smokers, saved 3,900 Alaskans from smoking-caused deaths, produced $148 million in long-term health care savings, and raised roughly $26 million a year in new revenue.

Alaska becomes the 34th state, along with the District of Columbia and Puerto Rico, to increase its cigarette tax since January 1, 2002. The evidence is clear that increasing the price of cigarettes is one of the most effective ways to reduce smoking, especially among children and pregnant women. Studies show that every 10 percent increase in the price of cigarettes reduces youth smoking by seven percent and overall cigarette consumption by three to five percent. Preliminary evidence confirms that every state that has significantly increased its cigarette tax in recent years has enjoyed substantial increases in revenue, even while reducing cigarette sales.

Tobacco use is the leading preventable cause of death in Alaska. 19.2 percent of high school students currently smoke, and 2,200 more kids become regular, daily smokers every year. Smoking-caused health care costs Alaska and its taxpayers $132 million a year. Alaska’s higher cigarette tax will help reduce this terrible toll.

 

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