New Report Shows North Carolina Can Solve Budget Woes and Save Lives

North Carolina Would Also Raise $380.1 Million in New Revenue Each Year

Jun. 10 2005

Washington, DC — As the North Carolina legislature struggles to balance the budget, a Campaign for Tobacco-Free Kids report being released today finds that increasing the state's cigarette tax to the national average would solve the budget crisis while dramatically reducing the number of youth smokers and saving tens of thousands of lives. According to the report, North Carolina would experience significantly greater health and economic benefits by increasing the cigarette tax by 85 cents a pack, to the national average, than by 35 cents a pack as the state Senate has proposed.

The 25-page report titled "North Carolina's Cigarette Tax is Way Below the National Average," finds that an 85-cent cigarette tax increase would prevent some 115,100 kids alive today from becoming smokers; spur 64,200 current adult smokers to quit; and save 53,800 North Carolina citizens from premature, smoking-caused deaths. An 85-cent increase would also raise $380.1 million in new revenue each year and produce $2.4 billion in long-term health care savings.

"This report provides further evidence that increasing North Carolina's cigarette tax to at least the national average is a win-win-win solution, that will save lives and money, and is popular among voters," said William V. Corr, Executive Director of the Campaign for Tobacco-Free Kids. "An 85-cent cigarette tax increase will not only reduce the state's health care expenditures, but it will also shrink smoking-caused productivity losses and other tobacco-caused costs. The overall health of the state's citizens will improve and the productivity of the state's workforce will increase."

An 85-cent increase would boost North Carolina's lowest-in-the-nation 5-cent per pack cigarette tax to 90 cents. The average state cigarette tax is currently 84.5 cents a pack, but it is expected to increase to at least 90 cents by the end of the year once several states considering cigarette tax increases take action.

The North Carolina Senate has proposed increasing the cigarette tax by 35 cents per pack, which would keep the tax well below the national average. This would generate significantly fewer health and financial benefits for the state. As compared to a 35-cent increase, an 85-cent increase would prevent 67,700 additional kids from becoming smokers; spur 37,800 additional adults to quit; save 31,800 additional lives, raise an extra $194 million in revenue each year, and produce $1.4 billion more in long-term health care savings.

"While North Carolina's leaders have the right idea about raising the state's lowest-in-the-nation cigarette tax, they should increase the tax to at least the national average to realize the significant health and economic benefits that will follow," added Corr. "The growing number of states that have raised their cigarette taxes in recent years represents important progress toward reducing the devastating toll of tobacco in our country. It's now North Carolina's turn to join this movement to keep kids from smoking, improve health and save lives."

A total of 37 states have increased their cigarette taxes in recent years, including the tobacco growing states of Kentucky, Virginia, Georgia and Tennessee.

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.

Tobacco use is the leading preventable cause of death in North Carolina, claiming more than 11,900 lives each year and costing the state $2.26 billion annually in health care bills, including $707.8 million in Medicaid payments alone. Government expenditures related to tobacco amount to a hidden tax of $556 each year on every North Carolina household. While North Carolina has made significant progress in reducing youth smoking, 24.8 percent of North Carolina high school students are still current smokers, and 23,700 more kids become regular smokers every year.

 

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