Tennessee Cigarette Tax Increase Is… | Campaign for Tobacco-Free Kids
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Tennessee Cigarette Tax Increase Is a Victory for Kids and Taxpayers

Statement of William V. Corr Executive Director, Campaign for Tobacco-Free Kids
June 05, 2007

Washington, DC — Tennessee leaders have taken an historic step to protect the state’s kids and taxpayers from the devastating toll of tobacco use by increasing the state cigarette tax by 42 cents to 62 cents a pack. A higher cigarette tax is a win-win-win solution for Tennessee – a health win that will reduce tobacco use and save lives, a financial win that will raise revenue to fund education and other important programs, and a political win that polls show is popular with the voters. We applaud Governor Phil Bredesen for his leadership in proposing to increase the cigarette tax and the Legislature for enacting this life-saving proposal.

Tennessee’s cigarette tax increase, along with recent increases in Georgia, North Carolina and Virginia, represents important progress toward reducing tobacco’s disproportionate toll in the tobacco-growing states. More and more, leaders in the tobacco-growing states are seeing past the misleading arguments of the tobacco companies and taking action to reduce tobacco’s terrible toll in health, lives and money.

The evidence is clear that increasing the cigarette tax 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 about four percent. Tennessee can expect the 42-cent cigarette tax increase to prevent some 33,700 Tennessee kids alive today from smoking, save 16,800 Tennesseans from smoking-caused deaths, produce $809 million in long-term health care savings, and raise about $200 million a year in new revenue.

The cigarette tax increase in the second major step Tennessee leaders have taken in the past week to reduce the toll of tobacco use and exposure to secondhand smoke, following approval of legislation to make most workplaces, including restaurants, smoke-free. Now Tennessee legislators should take a third important step by approving a pending budget proposal to fund effective programs to prevent kids from smoking and help smokers quit. This proposal would provide $10 million in funding for tobacco prevention and cessation programs, which would mark the first time Tennessee has provided significant funding for such programs. It’s only right that Tennessee use some of the hundreds of millions of dollars it collects each year from the tobacco settlement and tobacco taxes to fight the tobacco problem. By implementing all three of the most effective policies to reduce tobacco use – a higher tobacco tax, a strong smoke-free workplace law, and effective tobacco prevention and cessation programs – Tennessee can have the maximum impact in reducing tobacco’s devastating toll in health, lives and money.

Tobacco use is the leading preventable cause of death in Tennessee, claiming more than 9,500 lives each year and costing the state $2.2 billion annually in health care bills, including $680 million in Medicaid payments alone. Government expenditures related to tobacco amount to a hidden tax of $614 each year on every Tennessee household. Currently, 26.3 percent of Tennessee high school students smoke, which is higher than the national average of 23 percent, and 8,400 more kids become regular smokers every year.

With the Tennessee cigarette tax increase, the average state cigarette tax will be $1.046 per pack. Since January 1, 2002, 43 states, Puerto Rico and the District of Columbia have increased cigarette taxes, some more than one. There are now six states with cigarette taxes of $2 or more and 23 states with cigarette taxes of $1 or more. Chicago has the nation’s highest combined state and local cigarette tax at $3.66 per pack. The seven states that have not increased cigarette taxes since January 1, 2002, are California (87 cents a pack, last increased 1/1/99), Florida (33.9 cents, last increased 7/1/90), Mississippi (18 cents, last increased 6/1/85), Missouri (17 cents, last increased 10/1/93), North Dakota (44 cents, last increased 7/1/93), South Carolina (7 cents, last increased 7/1/77) and Wisconsin (77 cents, last increased 10/1/01).