Cash-Strapped States Expected to Hike Tobacco Taxes

By Susan Jones | July 7, 2008 | 8:28 PM EDT

( - "The tobacco tax-hike trend is going to snowball this year:" So says the head of the American Lung Association, a group that approves of higher taxes as a means of "tobacco control."

John Kirkwood, the president and CEO of the American Lung Association, noted that governors and state lawmakers are "scrambling to plug holes in their budgets with whatever money they can find," something that's making tobacco taxation very popular.

As a result, cigarette taxes of $1-per-pack or more soon will become the norm rather than the exception, Kirkwood predicted.

While the national cigarette-tax average is $44.6 cents per pack, six states now have tobacco taxes of $1 or more per pack, according to the ALA, which pronounced the trend "good news."

The American Lung Association offers a comprehensive guide to what it calls "state tobacco control laws." According to that report, four states raised their tobacco excise taxes in 2001.

"Early indications show that many other states will follow suit in 2002," said Kirkwood in a statement. He said at least 17 states are now considering significant cigarette tax increases.

He also noted that New York will have the highest tobacco taxes in the nation in April, when a new law raising the state tobacco tax takes effect.

Don't Like It? Slap a Tax On It

There's also a move afoot in New York City to slap additional taxes on tobacco products, over and above the increase approved by the New York State Legislature.

New York City Mayor Michael Bloomberg admits he is counting on higher taxes to discourage cigarette smoking in his city, something the tobacco industry strongly opposes.

Bloomberg, as part of the budget plan he released this week, proposed hiking the city tax on cigarettes from 8 cents a pack to $1.50 a pack. Along with the new, higher state cigarette tax, that would bring cigarette prices to about $7 a pack in New York City.

Bloomberg said his plan would reduce teen smoking. "The smoking cessation programs work a little," he said, "but I think all public health officials will tell you that they are nowhere near as efficient as just raising taxes. Raising taxes, you can see it. You raise it, consumption goes down. You raise it more, consumption keeps going down."

The tobacco industry says additional tobacco tax hikes will drive adult smokers and retail jobs to surrounding, lower-tax jurisdictions. People will buy their smokes over the Internet or on Indian reservations, the industry insists.