Feb. 16 2005
Washington, DC — Governor Blagojevich's proposal to increase the state cigarette tax by 75 cents, to $1.73 cents per pack, is an important step toward protecting Illinois' kids and taxpayers from the devastating toll of tobacco. Increasing the cigarette tax is a win-win-win solution for Illinois. It is a public health win that will reduce smoking and save lives, a fiscal win that will raise much-needed revenue and reduce smoking-caused health care costs, and a political win because cigarette taxes have the strong support of the public.
Studies show every 10 percent increase in the price of cigarettes reduces youth smoking by about seven percent and overall cigarette consumption by about four percent. Illinois can expect that a 75-cent cigarette tax increase would prevent some 112,000 kids alive today from becoming smokers; spur 72,000 current adult smokers to quit; save 51,600 Illinois residents from premature, smoking-caused deaths; produce nearly $2 billion in long-term health care savings; and raise more than $320 million in new revenue each year. In recent years, every state that has significantly increased its cigarette tax has enjoyed significant increases in revenue even while reducing cigarette sales. A Campaign for Tobacco-Free Kids Fact Sheet listing all the projected benefits from a 75-cent cigarette tax increase is attached.
While a 75-cent cigarette tax increase will deliver significant benefits, Illinois can achieve even greater reductions in smoking and even greater health and financial benefits by dedicating a small portion of the new cigarette tax revenue to properly fund a tobacco prevention program. Illinois currently ranks 37th in the nation in funding programs to protect kids from tobacco, spending $11 million a year on tobacco prevention, which amounts to less than 17 percent of the minimum amount of $64.9 million recommended by the U.S. Centers for Disease Control and Prevention. It would take just a small percentage of the new cigarette tax revenue to increase funding for tobacco prevention, leaving plenty for other purposes.
Tobacco use is the leading preventable cause of death in Illinois, claiming more than 20,200 lives each year and costing the state $3.8 billion annually in health care bills, including $1.4 billion in Medicaid payments alone. Government expenditures related to tobacco amount to a hidden tax of $637 on every Illinois household. In addition, 29.2 percent of Illinois high school students currently smoke, and 34,200 more kids become regular smokers every year. By increasing the cigarette tax, Illinois can protect its kids from tobacco, save lives and save money. By properly funding tobacco prevention, it can achieve even greater benefits.