House rejects bill that would increase state tobacco tax by 25 cents

Despite overwhelming evidence that an increased tobacco tax would curtail smoking, Indiana House representatives voted yesterday 52-44 against a bill to raise the current 55.5-cent tax by 25 cents.\n“All of the evidence accrued over the past three decades shows that among the strategies to decrease tobacco use, raising the price is right at the top,” said Dr. Stephen Jay, a professor of medicine and public health at the IU School of Medicine. “The background on this fact doesn’t just come from an isolated study – it’s been proven time and time again.”\nGov. Mitch Daniels proposed a minimum tax increase of 25 cents, which would go toward funding a health-insurance plan for the hundreds of thousands of uninsured Hoosiers. Anti-smoking groups pushed for as much as a $1 tax increase.\nWhile this might seem substantial to those purchasing tobacco products, a study done at the IU School of Medicine found that it would take a tax of $7.50 per pack of cigarettes to cover the health costs incurred for every pack smoked in Indiana. \n“Indiana has the second highest tobacco-related disease rate in the nation, but the third lowest tobacco excise tax,” Jay said. \nLooking back at the state’s history, this correlation is not a new theme.\n“About 60 years ago, many state legislatures started looking at the costs to society of the tobacco problem and decided to tax as a way for the state to recoup the costs they had to pay with high Medicaid costs,” Jay said. “Some states, mostly tobacco-producing states like Indiana, however, did not reassess the situation and kept taxes at rock bottom.”\nJay said Indiana paid around $400 million last year to Medicaid for tobacco-related diseases. Daniels estimated the money from a 25-cent increase would help provide health coverage to 120,000 people.\n“The bottom line is, if the legislature moved the tax up a buck, nobody in the public would quibble with it except a handful of tobacco companies and retailers,” he said.\nJay theorizes the heavy influence of wealthy tobacco companies is the main reason why Indiana policymakers voted against the proposal, as numerous public-opinion polls conducted over the past two decades have shown that even a majority of smokers agree increased rates would be a step in the right direction for state health.\n“Tobacco companies spend an enormous amount of money trying to defeat tax increases around the country,” Jay said. “These advertisers are very aggressive. We can tell that we’re getting close to creating this tax policy when the companies come out and do everything in their power to prevent it, and that’s what we’re seeing right now.”\nThough it saw defeat in the House, the bill is not dead yet. There are other ways the legislation can pass the General Assembly. Jay said it’s urgent to contact local representatives and insist they vote for the tax increase.\nState budget issues also play a part in the debate. \n“Indiana just doesn’t have the money to walk away from the kind of funds that would be generated from tobacco tax,” said Jon Macy, project director of the Indiana University Smoking Survey. “Besides obvious health benefits, there’s just an enormous economic gain for the state of Indiana, so I’m sure they’ll come back to it.”\nAmong all the evidence, some smokers don’t think an increase the cost of cigarettes would change their habits. \n“It wouldn’t really be an incentive to quit,” sophomore Jacquelyn Wahlberg said. “They’re already pretty expensive and it’s something we all complain about, but we still buy them. It’s like gas. It’s the fuel that gets us from point A to point B sometimes.” \nFor other students, having to pay more per pack might be reason enough to stop smoking.\n“I already want to quit, but the tax probably would help give me another reason to,” senior Mike Greisch said.\nJay found that with every 10 percent increase in tobacco taxes, there is an average of a 3 percent to 4 percent decrease in overall smoking rates. Specifically, he said, advantages of an increased tobacco tax would be most obvious among youths, with every 10 percent tax increase resulting in a 7 percent tobacco use decrease in minors.\n“The evidence for the benefits of this bill is crystal-clear,” Macy said. “As far as most people are concerned, there are no downsides to this bill. It’s mind-boggling that there wasn’t enough support overall. The Legislature let Indiana down, especially the kids.”