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National and state data on the percentage of three- and four-year-olds in publicly-funded preschool in 2011-2012 are from the National Institute for Early Education Research’s (NIEER) report, The State of Preschool 2012: State Preschool Yearbook (Barnett, WS, et al., The State of Preschool 2012: State Preschool Yearbook, NIEER, 2012, p. 17, http://nieer.org/publications/state-preschool-2012). The figures include state-funded preschool, preschool special education, and federally funded and state-funded Head Start.
NIEER collected data on state preschool enrollment through surveys of state preschool administrators. For federal Head Start enrollment, NIEER used data from the Administration for Children and Families (ACF) and the Head Start Bureau of the U.S. Department of Health and Human Services. For special education enrollment, NIEER used data from the U.S. Office of Special Education Programs on the Individuals with Disabilities Education Act Preschool Grants program (IDEA Section 619 of Part B) in the 2011-2012 program year. For the number of three- and four-year-olds in each state—used to calculate enrollment as a percentage of the population—NIEER used data from the U.S. Census Bureau from July 2011 (Population Estimates from State Population Datasets (State by Age, Sex, Race, and Hispanic Origin - 6 Race Groups), http://www.census.gov/popest/data/state/asrh/2011/index.html).
In some cases, NIEER calculated estimates to avoid duplicated counts. Alaska, California, Louisiana, Maine, New York, Pennsylvania, South Carolina, and Virginia serve special education children in their state preschool programs but were not able to provide an unduplicated count from at least one of their programs; estimations for these states were used based on the average percent of special education students in state preschool and enrollment numbers for each program. Delaware, Minnesota, Pennsylvania, and Wisconsin serve special education children in their state-funded Head Start preschool programs but were not able to provide an unduplicated count for the Head Start program; estimations were used based on the percent of children with Individualized Education Programs (IEPs) as reported by the Head Start Program Information Report (PIR). District of Columbia enrollment figures may reflect out-of-district enrollments and incomplete removal of duplicate counts; these figures should be regarded as estimates.
The national and state-specific data on the number and percentage of children under age six living in households with incomes below 200 percent of the federal poverty level were calculated by the National Women’s Law Center, based on data from the U.S. Census Bureau’s American Community Survey (U.S. Census Bureau, 2011 American Community Survey 1-Year Estimates, Table B17024: Age by Ratio of Income to Poverty Level in the Past 12 Months, http://factfinder2.census.gov/bkmk/table/1.0/en/ACS/11_1YR/B17024). Data are based on a sample and are subject to sampling variability.
The data on the number of children age four living in households with incomes below 200 percent of the federal poverty level were calculated by the National Women’s Law Center, based on data from the U.S. Census Bureau’s Current Population Survey, Annual Social and Economic Supplement, 2012, using CPS table creator: http://www.census.gov/cps/data/cpstablecreator.html. Data are based on a sample and are subject to sampling variability.
The projections of the impact of the preschool proposal are from White House documents available from the U.S. Department of Education (Early Learning Plan Figures by State (All States), http://www2.ed.gov/about/inits/ed/earlylearning/increasing-access/index.html). The amount of federal funding that states will receive and the number of children served in the first year in preschool are estimates. The estimates for funding for and children that would be served by the preschool program assume states participate and provide a state match (equal to 10 percent of the federal share). Actual funding and enrollment could vary depending on the scope of each state’s preschool expansion and the cost of providing high-quality preschool services. The estimates assume that states will expand to 20 percent of their eligible four-year-olds in the first year at a per-child cost of $9,000 a year. The estimates of federal funding that states will receive for an expanded home visiting program assume $15 billion of total funding over ten years and that the same proportion of total funding is allocated for statutory set-asides, formula and competitive grants as in FY 2012 and states received an equal amount of competitive funding. Funding and enrollment estimates for preschool and funding estimates for home visiting are designed to be illustrative only and do not represent actual first year awards.
The estimated number of deaths from smoking in each state is from U.S. Centers for Disease Control and Prevention’s (CDC) STATE System (average annual deaths from 2000-2004), http://apps.nccd.cdc.gov/StateSystem/systemIndex.aspx. [U.S. Centers for Disease Control and Prevention (CDC), “State-Specific Smoking-Attributable Mortality and Years of Potential Life Lost—United States, 2000-2004,” Morbidity & Mortality Weekly Report (MMWR) 58(2), January 22, 2009; U.S. General Accounting Office (GAO), “CDC’s April 2002 Report on Smoking: Estimates of Selected Health Consequences of Cigarette Smoking Were Reasonable,” letter to U.S. Rep. Richard Burr, http://www.gao.gov/new.items/d03942r.pdf, July 16, 2003.] The state health care costs are from the CDC’s State Data Highlights 2006 [and underlying CDC data/estimates], http://www.cdc.gov/tobacco/data_statistics/state_data/data_highlights/2006/index.htm. The estimated number of youth who try smoking for the first time each year is calculated based on U.S. Department of Health & Human Services (HHS), “Summary Findings from the 2011 National Survey on Drug Use and Health,” http://www.samhsa.gov/data/NSDUH/2011SummNatFindDetTables/NSDUH-DetTabsPDFWHTML2011/2k11DetailedTabs/Web/HTML/NSDUH-DetTabsSect4peTabs1to16-2011.htm#Tab4.10A, with the state share of the national number allocated through the formula in CDC, “Projected Smoking-Related Deaths Among Youth—United States,” MMWR 45(44):971-74, November 8, 1996 [based on state young adult smoking rates, as updated in CDC, Sustaining State Programs for Tobacco Control, Data Highlights, 2006].
The projected public health and economic benefits from the proposed 94-cent increase in the federal cigarette excise tax rate were calculated by the Campaign for Tobacco-Free Kids and the American Cancer Society Action Network and are assumed to be equivalent to the projected benefits of each state increasing its own cigarette tax rate by 94¢ per pack. The projections are based, in part, on research findings that a ten percent cigarette price increase, if maintained against inflation, reduces youth smoking rates by 6.5 percent or more, adult rates by ten percent, and total consumption by four percent. [See, e.g., Chaloupka, FJ, “Macro-Social Influences: The Effects of Prices and Tobacco Control Policies on the Demand for Tobacco Products,” Nicotine & Tobacco Research, 1999, and other price studies at http://tigger.uic.edu/~fjc; Tauras, J, et al., “Effects of Price and Access Laws on Teenage Smoking Initiation: A National Longitudinal Analysis,” Bridging the Gap Research, ImpacTeen, April 24, 2001, and other price studies at http://www.impacteen.org. See also, Chaloupka, FJ & Pacula, R, “The Impact of Price on Youth Tobacco Use,” Chapter 12 in National Cancer Institute, Smoking and Tobacco Control Monograph 14, Changing Adolescent Smoking Prevalence, November 2001; International Agency for Research on Cancer (IARC), Effectiveness of Tax and Price Policies for Tobacco Control, IARC Handbooks of Cancer Prevention in Tobacco Control, Volume 14, 2011.]
These projections incorporate the impact of an annual background smoking decline of two percent on state smoking rates, pack sales, and pack prices. Smoking and pack sale declines in any particular state, however, will vary depending on its existing smoking rates, pack prices, and other tobacco prevention and cessation activities. To be even more conservative, the projected amounts have also been rounded down.
These projections assume that the cigarette tax increase remains in effect indefinitely, keeps up with inflation over time, and is fully passed on to consumers in higher product prices, which is consistent with economic research on the impact of cigarette taxes on cigarette prices (see the 2000 Surgeon General’s report and Chaloupka, et al., 2000 for a discussion of this research). If a tax increase is not fully passed on in the form of higher prices, but is instead partially absorbed by the industry, then the reductions in smoking and its consequences in response to the tax increase will be smaller. Alternatively, if cigarette companies use the tax increase as an opportunity to raise net-of-tax prices and the tax increase is more than passed on, then the reductions in smoking and its consequences will be larger.
The starting price per pack (before the proposed cigarette tax increase) used in these projections includes all federal and state excise and sales taxes and where applicable, and local taxes (i.e., New York City’s $1.50 per pack tax is factored into the overall New York State price per pack). The prices are based on data from The Tax Burden on Tobacco, 2011, reports of state cigarette tax increases, media reports on tobacco company price changes, USDA Economic Research Service’s Tobacco Briefing Room, the U.S. Bureau of Labor Statistics (for inflation adjustments), and the U.S. Federal Trade Commission’s Cigarette Report for 2009 and 2010 (to adjust prices for retailer-based discounts, promotions, and coupons).
These projections assume that the new federal cigarette tax increase will apply to all previously tax-stamped or otherwise tax-paid cigarettes held in inventory by wholesalers or retailers on the effective date of the increase. Failing to tax such cigarettes held in inventory would open the door to massive pre-increase stockpiling by retailers and wholesalers to evade the increase, delaying and reducing impact on smokers who quit when the tax increase goes into effect.
The projected adult and youth smoking and smoking-harmed birth declines, and related mortality reductions are calculated by applying the above findings regarding the effects of tax and price increases to the number of current adult smokers in each state and to estimates of the number of children and teens (under 18 years old) alive today in each state who will become adult smokers and the number projected to die from smoking. Adults who quit in response to the tax increase usually do so within the first year of the increase. Kids alive today prevented from becoming adult smokers occurs through 18 years, when the youngest in that cohort reach 18 years old, but they continue to be non-smokers through adulthood. Future smoking-caused deaths prevented accumulate over the lifetimes of the kids who never start and adults who quit as a result of the tax increase. [CDC, Behavioral Risk Factor Surveillance System (BRFSS). CDC, “Smoking During Pregnancy—United States, 1990-2002,” MMWR 53(39):911-915, October 8, 2004, http://www.cdc.gov/mmwr/PDF/wk/mm5339.pdf. CDC, “Annual Smoking-Attributable Mortality, Years of Potential Life Lost, and Economic Costs—United States 1995-1999,” MMWR 51(14):300-03, April 11, 2002, http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5114a2.htm. CDC, “Annual Smoking-Attributable Mortality, Years of Potential Life Lost, and Economic Costs—United States 2000-2004,” MMWR 57(45):1226-1228, November 14, 2008, http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5745a3.htm. See CDC, “Projected Smoking-Related Deaths Among Youth—United States,” MMWR 45(44):971-974, November 11, 1996, http://www.cdc.gov/mmwr/preview/mmwrhtml/00044348.htm for data on relative death risks of smokers, nonsmokers, former smokers, etc.]
The ten-year savings from fewer smoking-caused heart attacks and strokes, fewer smoking-affected pregnancies and related birth complications, and fewer lung cancer cases show just some of the many substantial savings from the smoking reductions prompted by a tax increase that begin to accrue immediately. The ten-year heart attack and stroke savings projections show the estimated reductions in smoking-caused health care expenditures from reduced smoking-caused heart attacks within the first ten years after the tax increase, based on Lightwood & Glantz, “Short-Term Economic and Health Benefits of Smoking Cessation – Myocardial Infarction and Stroke,” Circulation 96(4), August 19, 1997. [See also Kabir, Z, et al., “Coronary Heart Disease Deaths and Decreased Smoking Prevalence in Massachusetts, 1993-2003,” American Journal of Public Health 98(8):1468-69, August 2008.] The projected ten-year lung cancer cost savings as a result of adult smokers quitting due to the tax increase takes into account the relative risk of developing lung cancer among quitters and the number of lung cancer deaths attributable to smoking. [Chang, S, et al., “Estimating the cost of cancer: results on the basis of claims data analyses for cancer patients diagnosed with seven types of cancer during 1999 to 2000,” Journal of Clinical Oncology 22(17):3524-30, September 2004. Khuder, SA & Mutgi, AB, “Effect of smoking cessation on major histologic types of lung cancer,” Chest 120(5):1577-83, November 2001.] These savings will increase steadily in subsequent years. The projected ten-year smoking-affected pregnancy and birth savings accrue from declines in smoking among pregnant women and corresponding reductions in smoking-caused birth complications and related first-year health costs. [Miller, D, et al., “Birth and First-Year Costs for Mothers and Infants Attributable to Maternal Smoking,” Nicotine & Tobacco Research 3:25-35, 2001; and state pregnancy-smoking and birth data.]
Because of research and data limitations, it is not yet possible to estimate total health care cost savings in each year following a cigarette tax increase, or even provide reasonable estimates of the total health care savings over the first five or ten years. Although smoking-caused health care cost savings from a cigarette tax increase will be relatively small in the first year after an increase, they grow quickly. The projected long-term total health care cost savings from reducing the number of future youth and current adult smokers accrue over the lifetimes of children and teens (under 18 years old) alive in the state today who quit or don't start smoking because of the tax increase and over the lifetimes of current adult smokers who quit because of the tax increase. Smokers’ lifetime health care costs average at least $17,500 higher than nonsmokers (in 2004 dollars), despite shorter life spans; but the savings per adult quitter are less than that amount because adult smokers have already been significantly harmed by their smoking and have already incurred or locked-in extra smoking-caused health costs. [Hodgson, TA, “Cigarette Smoking and Lifetime Medical Expenditures,” The Milbank Quarterly 70(1), 1992. See also, Nusselder, W, et al., “Smoking and the Compression of Morbidity,” Epidemiology & Community Health, 2000; Warner, K, et al., “Medical Costs of Smoking in the United States: Estimates, Their Validity, and Their Implications,” Tobacco Control 8(3):290-300, Autumn 1999, http://tc.bmjjournals.com/content/vol8/issue3/index.shtml. CDC, “Projected Smoking-Related Deaths Among Youth—United States,” MMWR 45(44):971-974, November 8, 1996, http://www.cdc.gov/mmwr/preview/mmwrhtml/00044348.htm. CDC, “Annual Smoking-Attributable Mortality, Years of Potential Life Lost, and Economic Costs—United States 2000-2004,” MMWR 57(45):1226-1228, November 14, 2008, http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5745a3.htm.]
All projected savings have been adjusted to 2013 dollars, using the Consumer Price Index for Medical Care (MCPI). Forecasted costs are estimated by using the average annual medical inflation above average annual regular inflation that occurred between the years 2006-2011. These projections do not include a range of additional short and long-term savings from other declines in smoking-caused health problems and other smoking-caused costs. [See, e.g., U.S. Department of the Treasury, The Economic Costs of Smoking in the U.S. and the Benefits of Comprehensive Tobacco Legislation, 1998.]
States will generate additional public health and economic benefits from the proposal to also increase the tax rates on other tobacco products. However, those benefits cannot be calculated at this time because the proposal did not include details about the increase amount. Econometric studies indicate that cigarettes and other tobacco products are substitutes for one another, implying that if cigarette taxes/prices are increased while other tobacco product taxes/prices remain unchanged, some of the reductions in cigarette smoking would be offset by increases in the use of other tobacco products (see, e.g., Chaloupka, FJ & Warner, KE, “The Economics of Smoking,” in Culyer, AJ & Newhouse, JP, eds., Handbook of Health Economics, Amsterdam: North-Holland, 2000). Equalizing the tax rates on other tobacco product taxes would reduce this potential substitution (as well as reduce the use of other tobacco products) while at the same time generating additional revenues.