New Report: Increasing Maryland’s Cigarette Tax Will Reduce Smoking, Save Lives and Save Money

$1 Increase Would Also Fund Expanded Health Care Access for Marylanders

Oct. 22 2007

Washington, D.C. — As the Maryland Legislature prepares for next week's special session to resolve a state budget shortfall, a report released today finds that Governor Martin O'Malley's proposed $1 cigarette tax increase would dramatically reduce youth smoking, cause many smokers to quit, reduce tobacco-related health care costs and save thousands of lives.

Governor O'Malley has proposed increasing the cigarette tax as part of a plan to balance the budget and fund expanded access to health care for Marylanders.

The 30-page report by the Campaign for Tobacco-Free Kids – titled “Tobacco Tax Benefits For Maryland: Reducing Smoking, Saving Lives and Saving Money” – finds that a $1 cigarette tax increase would:

  • Prevent more than 52,000 Maryland kids from becoming smokers
  • Spur more than 28,000 current adult smokers to quit for good
  • Save more than 24,000 Marylanders from premature, smoking-caused deaths
  • Produce more than $1.1 billion in long-term health care savings

“This report provides powerful evidence that increasing the cigarette tax by $1 will improve both the physical and financial health of Maryland for generations to come,” said William V. Corr, Executive Director of the Campaign for Tobacco-Free Kids.

“In addition to funding expanded access to health care, a higher cigarette tax will significantly reduce smoking, lower smoking-caused health care costs and save lives. A higher cigarette tax to fund health care coverage is a win-win for Maryland,” Corr said.

Governor O'Malley's proposal to increase the cigarette tax is part of a larger plan to resolve a projected $1.7 billion budget shortfall. Approximately $85 million of the $220 million in new revenue generated in fiscal 2008 from the cigarette tax, as estimated by Maryland's Department of Legislative Services, would go toward expanding access to health care for Marylanders.

If approved, the $1 increase would double Maryland's total state cigarette tax to $2 per pack. A total of 43 states and Washington, DC, have increased their cigarette taxes in recent years, and eight states currently have cigarette taxes of $2 or more.

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 about 6.5 percent and overall cigarette consumption by about 4 percent. In recent years, every state that has significantly increased its cigarette tax has enjoyed significant increases in revenue even while reducing smoking.

Tobacco use is the leading preventable cause of death in the United States. In Maryland, tobacco use claims 6,800 lives each year and costs the state more than 1.96 billion annually in health care bills, including $476 million in Medicaid payments alone. Government expenditures related to tobacco amount to a hidden tax of $627 every year on every Maryland household. While Maryland has made progress in reducing youth smoking, 16.5 percent of Maryland high school students are still current smokers, and 6,900 more kids become smokers every year.

 

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