Feb. 12 2009
Washington, D.C. — Arkansas leaders have taken an important step to protect the state's kids and taxpayers from the devastating toll of tobacco use by increasing the state cigarette tax by 56 cents per pack. A higher cigarette tax is a win-win-win solution for Arkansas — a health win that will reduce tobacco use and save lives, a financial win that will raise critical new revenue for health improvements, and a political win that polls show is popular with the voters. We applaud Governor Mike Beebe for his leadership in proposing to increase the cigarette tax and the Legislature for enacting this life-saving proposal.
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 7 percent and overall cigarette consumption by about 4 percent. Arkansas can expect the 56-cent cigarette tax increase to prevent some 15,400 Arkansas kids alive today from smoking; spur 9,300 Arkansas smokers to quit for good; save nearly 7,300 Arkansas residents from smoking-caused deaths; produce $357.9 million in long-term health care savings; and raise about $72 million a year in new state revenue.
When Arkansas's tax increase is signed into law, the state's cigarette tax will rise to $1.15 per pack, ranking it 25th in the nation. Since January 1, 2002, 44 states have increased cigarette taxes, some more than once. With Arkansas's increase, the average state cigarette tax will be $1.20 per pack, with 27 states having a state tax rate of $1 or more per pack.
Tobacco use is the leading preventable cause of death and disease in Arkansas, claiming more than 4,900 lives each year and costing the state $812 million annually in health care bills, including $242 million in Medicaid payments alone. Government expenditures related to tobacco amount to a hidden tax of $562 each year on every Arkansas household. While Arkansas has made some progress in reducing youth smoking, 20.7 percent of Arkansas high school students still smoke — above the national average of 20 percent — and 3,900 more kids become regular smokers every year.
We call on states across the nation to follow Arkansas's lead, and increase their own state cigarette taxes to keep more kids from smoking and help current smokers quit.