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Another perspective on the proposed cig-tax increase

We’ve heard from the politicians howling about Tim Kaine proposing a tax increase during a recession. There’s another side howling over the governor’s proposed 30-cent increase in the state cigarette tax.

“The governor is missing a great opportunity to dramatically improve the health of Virginians children and save taxpayers money,” said Keenan Caldwell, director of government relations for the American Cancer Society and one of the co-chairs of Virginians for a Healthy Future, which is advocating a 90-cent-per-pack increase on the state cigarette tax, which currently sits at 30 cents a pack.

“A 30-cent increase will generate some revenue for the state, but it will not have a substantial impact on health,” Caldwell said.

Kaine in his budget message to members of the Virginia General Assembly two weeks ago cited the costs borne by state taxpayers to provide Medicaid to Virginians for smoking-related illnesses as being an estimated $400 million a year. The 30-cent-a-pack levy raises an estimated $167 million a year for the state coffers, meaning “Virginians have to pay another $233 million a year in taxes just to support Medicaid costs related to smoking. I believe that the taxes on smoking should pay for the budget costs incurred because of smoking,” said Kaine, who estimates that the proposed 30-cents-a-pack increase will generate an additional $148 million annually for the Health Care Fund that supports Medicaid.

“This still will not fully cover smoking’s costs, but the taxpayer subsidy will be significantly reduced,” said Kaine, noting that the tax even with the sharp increase would still leave the Virginia cigarette tax at about half the national average.

The 90-cent increase being pushed by Virginians for a Healthy Future would bring us up to that average, and would also more than cover the costs that state taxpayers incur to provide Medicaid coverage for smoking-related illnesses, which are projected to be on the upswing as the baby boomers age into retirement.

Another benefit would be to reduce smoking particularly among children. Virginians for a Healthy Future points to studies indicating that for every 10 percent increase in the price of cigarettes ther is a corresponding drop in youth smoking by about 7 percent and overall cigarette consumption by about 4 percent. And extrapolating from data from a study conducted by the Campaign for Tobacco Free Kids, a 90-cent increase in Virginia could prevent 83,400 Virginia kids from becoming smokers, prompt 44,100 adult smokers to quit, and prevent 38,200 adults and kids from premature, smoking-caused deaths.

“When we raise our cigarette tax, let’s do it right,” said David DeBiasi, director of advocacy and public education for the American Lung Association in Virginia and co-chair of Virginians for a Healthy Future. “The governor has an opportunity to get three tremendous wins, all in one General Assembly session. With the overwhelming public support for cigarette taxes, there is no reason to leave money on the table that might cost state employees their jobs.”

“Cigarette-tax increases are proven to save lives. They make cigarettes too expensive for many kids to buy and give smokers another incentive to quit. The higher the tax, the more lives saved,” said Cathleen Grzesiek, director of government relations for the American Heart Association and co-chair of Virginians for a Healthy Future. “Virginians for a Healthy Future will continue to advocate for a portion of cigarette-tax revenues to be dedicated to smoking prevention and cessation. We are eager to see the General Assembly follow through on passing a significant cigarette-tax increase in 2009.”


– Story by Chris Graham

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