Kentucky's Historic Cigarette Tax Increase is a Victory for Kids and Taxpayers

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

Mar. 9 2005

Washington, DC — The Kentucky Legislature's vote Tuesday night to increase the state's lowest-in-the-nation cigarette tax by 27 cents, to 30 cents a pack, is a historic step toward protecting kids and taxpayers from tobacco's devastating toll. Kentucky's cigarette tax increase, along with recent cigarette tax increases in Virginia, Georgia and Tennessee, represents important progress toward reducing the disproportionately high smoking rates and the terrible price paid in health, lives and money in tobacco-growing states. Tobacco-state leaders are beginning to see past the misleading arguments - which have stymied efforts to protect public health - that tobacco prevention measures will hurt their economies.

We urge North Carolina and South Carolina, which now have the nation's lowest cigarette tax rates at just 5 and 7 cents a pack, to join their neighboring states in increasing cigarette taxes. We also urge all the tobacco states to further increase cigarette taxes toward the national average of 84.5 cents a pack. Like other states, the tobacco-growing states can further reduce smoking rates by supporting other proven tobacco prevention measures, including smoke-free workplaces and public places and well-funded programs to prevent kids from smoking and help smokers quit.

While Kentucky would have achieved even greater health and financial benefits with a larger cigarette tax increase, the 27-cent increase approved by the Legislature still represents the state's first cigarette tax increase since 1971 (when it was increased by just half a cent). Increasing the cigarette tax is a win-win-win solution for Kentucky. 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. Kentucky can expect the 27-cent per pack cigarette tax to prevent some 19,400 Kentucky kids alive today from becoming smokers, save 9,500 Kentuckians from smoking-caused deaths, produce more than $416 million in long-term health care savings, and raise more than $150 million in new revenue each year.

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 every 10 percent increase in the price of cigarettes reduces youth smoking by about seven percent and overall cigarette consumption by about four percent. In recent years, every state that has significantly increased its cigarette tax has enjoyed significant increases in revenue even while reducing cigarette sales. Kentucky becomes the 37th state, along with the District of Columbia and Puerto Rico, to increase its cigarette tax since January 1, 2002.

Tobacco use is the leading preventable cause of death in Kentucky, claiming more than 7,700 lives each year and costing the state $1.4 billion annually in health care bills, including $448 million in Medicaid payments alone. Government expenditures related to tobacco amount to a hidden tax of $567 each year on every Kentucky household. In addition, 32.7 percent of Kentucky high school students currently smoke, and 12,500 more kids become regular smokers every year. Increasing Kentucky's cigarette tax is an important step that will protect kids from tobacco, save lives and save money.

 

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