Kids and Taxpayers Win as Alabama Increases Cigarette Tax
"Alabama's leaders have taken an important step toward protecting the state's kids and taxpayers from the devastating toll of tobacco by increasing the state cigarette tax by 23 cents per pack. This is a win-win-win solution for Alabama that will reduce smoking among both kids and adults, save lives by reducing smoking-caused disease and raise much-needed revenue to help balance the state budget. Alabama can expect a 23-cent per pack cigarette tax increase to prevent some 16,000 kids alive today from becoming smokers, save 7,300 Alabamians from smoking-caused deaths, produce $274.5 million in long-term health care savings, and raise roughly $80.2 million a year in new revenue.
"Alabama becomes the 34th state to increase its cigarette tax since January 1, 2002. Despite the clear benefits of cigarette taxes, and polls showing broad, bipartisan public support for cigarette tax increases across the country, 9 states continue to have cigarette tax rates less than 25 cents per pack. We urge the 17 states that have not yet increased cigarette taxes to do so quickly so they can realize similar benefits.
"Studies show that every 10 percent increase in the price of cigarettes reduces youth smoking by seven percent and overall cigarette consumption by three to five percent. Preliminary evidence confirms every state that has significantly increased its cigarette tax in recent years has enjoyed substantial increases in revenue, even while reducing cigarette sales. Michigan, for example, collected $104 million more in cigarette tax revenue in the last five months of 2002 compared to the year before despite a 15.5 percent reduction in cigarette pack sales. Nebraska's 2002 tax increase has produced $10 million more in
additional revenues between October 2002 and April 2003 than in
the same period the year before. In New York City, where the
combined state and local cigarette tax rate has increased to $3.00 per pack, the city's tax increase from 8 cents to $1.50 per pack has resulted in a quarter of a billion dollars in new revenue over the first year and more than 100,000 fewer adults who smoke.
"Tobacco use is the leading preventable cause of death in Alabama. 23.7 percent of high school students currently smoke, and 13,000 more kids become regular, daily smokers every year, one-third of whom will die prematurely. Smoking-caused health care costs Alabama taxpayers $1.17 billion a year. Alabama's higher cigarette tax will help reduce this terrible toll."