New Cigarette Taxes, Anti-Smoking Laws Take Hold

By Robert B. Bluey | July 7, 2008 | 8:04 PM EDT

( - For anti-smoking advocates, 2002 was a year to celebrate. With budget deficits looming and public health concerns rising, several states hiked cigarette taxes and two major cities implemented widespread smoking bans.

Smokers in Kansas and the District of Columbia can expect to pay more for cigarettes, thanks to new taxes approved last year. Residents of Hawaii, Rhode Island and Vermont face similar tax increases later this year.

In New York City, Mayor Michael Bloomberg signed a law Tuesday that will ban smoking in most bars starting March 30. A more comprehensive smoking ban for restaurants, bars and other workplaces is scheduled to take effect in Boston on May 5.

New York City and Boston are not the only cities that have approved or are considering such smoking bans. Chicago and St. Louis could soon be next, said Cassandra Welch, director of field advocacy for the American Lung Association.

In fact, Welch said, more tax increases should be expected in 2003 as states continue to struggle with budget deficits.

"Right now the average cigarette tax is 62 cents, but I see half the states going to $1 by the end of 2003 or close to it," Welch said. "Policymakers have seen that tobacco taxes are really a win-win situation. Not only do they have an impact on public health by reducing tobacco consumption, but they also provide needed revenue."

Twenty states, the District of Columbia and Puerto Rico approved new cigarette taxes in 2002, according to the Campaign for Tobacco-Free Kids. Massachusetts tops the list at $1.51 per pack, with New Jersey and New York tied for second at $1.50 per pack.

An effort to increase cigarette taxes is even under way in Virginia, which has the nation's lowest tax at 2.5 cents per pack. Virginia, home to tobacco giant Phillip Morris, has not raised its tax on cigarettes since 1960.

Last fall, a coalition of anti-smoking groups commissioned a survey that showed two-thirds of Virginians would support a 60-cent per pack tax increase, bringing the state up to the national average.

The effort received little support initially, but recently some lawmakers have embraced the idea as a cure for the budget deficit. The measure pushed by the anti-smoking advocates would bring in an additional $320 million to $370 million in revenues, according to their estimates.

Welch predicted at least one of the traditional big-tobacco states -- Georgia, Kentucky, North Carolina or Virginia -- would increase their cigarette tax in 2003.

Besides Virginia's 2.5 cents per pack tax, Kentucky charges 3 cents, North Carolina adds a 5-cent tax to each pack and Georgia imposes a 12-cent tax.

Tobacco companies have steadfastly opposed cigarette taxes and smoking bans. A spokesman for North Carolina-based R.J. Reynolds Tobacco Co., a competitor of Philip Morris, said the taxes unfairly target smokers, while the smoking prohibitions unduly infringe on private businesses.

"It's a question of fairness when you talk about cigarette taxes," spokesman Craig A. Fishel said. "These taxes are placing an unfair burden on people who are the least able to afford them."

Based on figures from R.J. Reynolds, 58 percent of adult smokers have incomes under $35,000. Overall, smokers make up 23 percent of the population, meaning the taxes disproportionately hurt lower-income individuals and only target a segment of the population, Fishel said.

He said disparities in taxes in some neighboring states lead to cross-border smuggling. Maryland, for instance, raised its cigarette tax to $1 per pack last year -- a stark contrast to Virginia's 2.5-cent tax.

Tom Glynn, the American Cancer Society's director of science and trends, said the tobacco industry's arguments have so far not translated into the public backlash that was widely predicted. He said there is no telling how high some states might be able to raise taxes, but he warned that such increases should not be done to penalize smokers.

"This is not an anti-smoker thing," Glynn said. "It gives smokers an opportunity to take the step, which most are thinking about anyway, to stop smoking."

Although Glynn was skeptical of the tobacco industry's arguments, he said it was probable that some smokers were crossing state lines to purchase cigarettes. Some Internet outfits have also sprung up, selling packs for as low as $1.

New York City, where some packs of cigarettes now cost $7.50, could be pushing the upper limit when it comes to taxes, Glynn said.

Bloomberg, a former smoker who became mayor last January, has riled some New Yorkers for his anti-smoking policies. First came a tax increase of $1.50 per pack in June, then the smoking ban.

Fishel would not predict what the coming year would hold for similar smoking bans, but he criticized them for overreaching into the private sector.

"Business owners know best how to satisfy their customers," he said. "They, rather than the government, should be able to decide whether to allow, restrict or ban smoking in their establishments. To take that one step farther, we obviously think that smokers and non-smokers can peacefully co-exist in public places without resorting to smoking bans."

But Glynn said the smoking bans have had little economic hardship on bars and restaurants, while improving workplace conditions for waiters and bartenders.

In New York, patrons will not have to worry about the ban until after the much-celebrated St. Patrick's Day, which falls on March 17 -- just 13 days before the ban takes effect.

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