Rhode Island Cigarette Tax Increase Delivers Victory for Kids and Taxpayers; $1 Increase Give State Highest Cigarette Tax in the Nation

Washington, D.C. — Rhode Island's leaders have taken decisive action to protect the state's kids and taxpayers from the devastating toll of tobacco use by increasing the state cigarette tax by $1 to $3.46 per pack, making it the highest state cigarette tax in the nation. Rhode Island is also increasing the tax on most other tobacco products. Increased tobacco taxes are a win-win-win solution for Rhode Island — a health win that will reduce tobacco use and save lives, a financial win that will raise revenue to help alleviate budget shortfalls, and a political win that polls show is popular with the voters.

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. Rhode Island can expect the $1 cigarette tax increase to prevent more than 7,300 Rhode Island kids from smoking; spur 3,400 Rhode Island smokers to quit for good; save more than 3,200 Rhode Island residents from future smoking-caused deaths; produce $160 million in long-term health care savings; and raise about $13.3 million a year in new state revenue.

Governor Don Carcieri had proposed the increase in the cigarette tax in a fiscal year 2009 supplemental budget he submitted earlier this year. The state Legislature approved the tobacco tax increases last week, adding increases in taxes on other tobacco products and protecting Rhode Island's minimum pricing laws, measures which help thwart big tobacco's efforts to addict kids. This week Governor Carcieri allowed the budget to become law without his signature. By supporting a higher cigarette tax, Rhode Island's leaders have taken action that will improve the health of Rhode Islanders for generations to come and continue the state's leadership in the fight against tobacco use, the No. 1 cause of preventable death in the United States. The tobacco tax increases take effect on Friday (April 10).

Rhode Island has taken significant steps to win the fight against tobacco use by implementing higher tobacco taxes and a comprehensive smoke-free workplace law. The next step for Rhode Island is to increase funding for its tobacco prevention and cessation programs to levels recommended by the Centers for Disease Control and Prevention so it can have the greatest impact in preventing and reducing tobacco use.

Tobacco use is the leading preventable cause of death and disease in Rhode Island, claiming 1,600 lives each year and costing the state $506 million annually in health care bills, including $179 million in Medicaid payments alone. Government expenditures related to tobacco amount to a hidden tax of $728 each year on every Rhode Island household. While Rhode Island has made significant progress in reducing youth smoking, 15.1 percent of Rhode Island high school students smoke, and 1,400 more kids become regular smokers every year.

With Rhode Island's tax increase, the average state cigarette tax is now $1.23 per pack. Rhode Island is the first state with a cigarette tax of $3 or more. Twelve states and the District of Columbia have cigarette tax rates of $2 per pack or more, and 26 states and DC have cigarette tax rates of $1 per pack or more.