New Jersey Cigarette Tax Increase Would Benefit Kids and Taxpayers

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

Mar. 16 2006

Washington, DC — It is good news for New Jersey's health that Governor Jon Corzine is considering a 60-cent per pack increase in the state cigarette tax as part of his budget. By proposing a higher cigarette tax, Governor Corzine would continue New Jersey's national leadership in the fight to reduce the devastating toll of smoking and secondhand smoke, following the enactment of the state's new smoke-free workplace law. A higher cigarette tax is a win-win-win solution for New Jersey - a health win that will reduce smoking among both kids and adults; a financial win that will raise revenue and reduce smoking-caused health care costs; and a political win that is popular with the public. New Jersey's commitment to fighting tobacco use - the leading preventable cause of death - will deliver benefits for generations to come by improving health, saving lives and saving billions of dollars by reducing health care costs.

The scientific evidence is clear that increasing the price of cigarettes is one of the most effective ways to reduce smoking, especially among kids. 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. Every state that has significantly increased its cigarette tax in recent years has enjoyed substantial increases in revenue, even while reducing cigarette sales.

New Jersey can expect a 60-cent per pack cigarette tax increase to prevent some 37,400 New Jersey kids alive today from becoming smokers, save 17,000 New Jersey residents from smoking-caused deaths, produce $763 million in long-term health care savings, and raise more than $97 million in new revenue each year.

New Jersey would achieve even greater reductions in smoking if it used more of its tobacco tax and tobacco settlement revenues to fund a tobacco prevention and cessation program. The Centers for Disease Control and Prevention (CDC) recommends that New Jersey spend a minimum of $45.1 million a year on such a program, but New Jersey currently spends only $11.5 million, or 25.5 percent, of the CDC's recommendation. It is only appropriate that New Jersey use a portion of the more than a billion dollars it already collects in revenue from the tobacco settlement and tobacco taxes (which will increase if the cigarette tax increases) to adequately fund programs to keep kids from smoking and help smokers quit. States have been most successful at reducing smoking when they have implemented all three of the most effective policies to reduce smoking recommended by public health experts: a high tax on tobacco products; a strong smoke-free workplace law that includes restaurants and bars; and well-funded tobacco prevention and cessation programs.

Tobacco use is the leading preventable cause of death in New Jersey, claiming more than 11,200 lives each year and costing the state $2.92 billion annually in health care bills, including $891 million in Medicaid payments alone. Government expenditures related to tobacco amount to a hidden tax of $627 each year on every New Jersey household. In addition, 17.3 percent of New Jersey high school students currently smoke, and 14,600 more kids become regular smokers every year.

 

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