Wisconsin Legislature Delivers Victory for Kids and Taxpayers By Increasing Cigarette Tax, Tobacco Prevention Funding

Washington, D.C. — Wisconsin’s leaders have taken critical steps to protect the state’s kids and taxpayers from the devastating toll of tobacco use by increasing the state cigarette tax by $1 per pack and significantly increasing funding for the state’s tobacco prevention program. We applaud Governor Jim Doyle and legislative leaders for reaching agreement on this life-saving proposal.

Wisconsin’s cigarette tax increase is a win-win-win solution for the state – 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. Until now, Wisconsin had been one of only seven states that had not increased its cigarette tax in recent years. Now Wisconsin can join the other states that have increased cigarette taxes in enjoying the many health and financial benefits it brings.

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. Wisconsin can expect the $1 cigarette tax increase to prevent some 65,800 Wisconsin kids alive today from smoking; spur 33,000 Wisconsin smokers to quit for good: save nearly 30,000 Wisconsin residents from smoking-caused deaths; produce more than $1.4 billion in long-term health care savings; and raise about $227 million a year in new state revenue.

The budget approved by the Legislature also provides $15 million a year for Wisconsin’s tobacco prevention program – a 50 percent increase in funding. The increased funding will prevent even more Wisconsin kids from smoking and help additional smokers quit. While this increase represents important incremental progress, we urge Wisconsin leaders to continue to increase funding for tobacco prevention to at least minimum levels recommended by the Centers for Disease Control and Prevention. The CDC has recommended that Wisconsin spend at least $31 million a year on tobacco prevention.

Tobacco use is the leading preventable cause of death and disease in Wisconsin, claiming more than 7,300 lives each year and costing the state $2 billion annually in health care bills, including $480 million in Medicaid payments alone. Government expenditures related to tobacco amount to a hidden tax of $604 each year on every Wisconsin household. Currently, 19.9 percent of Wisconsin high school students smoke, and 8,200 more kids become regular smokers every year.

Once the Wisconsin increase is implemented on January 1, the average state cigarette tax will be $1.09 per pack. Since January 1, 2002, 44 states have increased cigarette taxes, some more than once. There are now eight states with cigarette taxes of $2 or more and 26 states with cigarette taxes of $1 or more. Wisconsin now has the 11th highest state cigarette tax in the country, but is still lower than neighboring Michigan and less than half of the combined local and state tax levied in Chicago.