Texas Tobacco Tax Increase is a Victory for Kids and Taxpayers

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

May. 15 2006

Washington, DC — Texas leaders have taken an important step that will protect the state's kids and taxpayers from the devastating toll of tobacco by increasing the cigarette tax by $1 to $1.41 per pack. We applaud Governor Rick Perry and supportive legislators for rejecting the misleading, multimillion-dollar lobbying campaign of the tobacco companies and taking a stand that will protect the health and pocketbooks of Texas families. We congratulate the many organizations that advocated for the cigarette tax increase for their tireless efforts to improve Texans' health.

A higher cigarette tax is a win-win-win solution for Texas - a health win that will reduce tobacco use and save lives, a financial win that will raise much-needed revenue and reduce tobacco-caused health care costs, and a political win that is popular with the voters. Texas can expect a $1 per pack cigarettes tax increase to prevent some 284,200 Texas kids alive today from becoming smokers, save 129,200 Texans from smoking-caused deaths, produce $5.8 billion in long-term health care savings, and raise roughly $756 million a year in new revenue. Until now, Texas had been one of only nine states that had not increased its cigarette tax in recent years. Now Texas can join the other states that have increased cigarette taxes in enjoying the many health and financial benefits.

While the cigarette tax increase is a significant step forward, we are disappointed that the Legislature did not devote any of the new revenue to the state's woefully under funded tobacco prevention program. Texas currently spends just $7 million a year on tobacco prevention, which is less than seven percent of the minimum amount of $103 million recommended by the U.S. Centers for Disease Control and Prevention. With the new cigarette tax, Texas will collect nearly $2 billion annually from the tobacco settlement and tobacco taxes. It is only right that Texas use more of its tobacco money to prevent kids from starting to smoke and help smokers quit.

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 about four percent. 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 Texas, claiming more than 24,100 lives each year and costing the state $5.4 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 $554 each year on every Texas household. In addition, 24.3 percent of Texas high school students currently smoke, and 40,400 more kids become regular smokers every year. Texas leaders today have taken an important step toward reducing tobacco's terrible toll on their state.

 

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