Washington, D.C. May 21, 2013 Minnesota public health advocates celebrated a victory today, as the legislature sent a $1.60 cigarette tax increase to Governor Mark Dayton 's desk that will reduce smoking rates, save lives and prevent thousands of kids from becoming addicted smokers. The increase, which the Governor is expected to sign in the coming days, will take effect July 1, 2013 and raise the current state cigarette tax of $1.23 per pack to a new total of $2.83.
State lawmakers are increasingly recognizing the public health benefits of raising taxes on tobacco products as an effective tool for reducing smoking rates, protecting kids and ultimately decreasing health care spending, said John R. Seffrin, chief executive officer of the American Cancer Society Cancer Action Network (ACS CAN). Not only does a tobacco tax save money and lives, but it ultimately reduces the cancer burden in a state and creates a stable and predictable source of revenue in challenging fiscal times.
ACS CAN estimates that the $1.60 increase will save more than 25,700 lives in Minnesota and keep more than 47,700 kids from becoming addicted adult smokers. The tax increase is also expected to prompt more than 36,600 adult smokers in Minnesota to quit.
The Minnesota legislature also increased the excise tax on other tobacco products, such as cigars and smokeless alternatives. The current rate in the state is 70 percent of the wholesale price and the new law would raise the rate to 95 percent of the wholesale price. As cigarette taxes increase, tobacco companies use deceptive marketing to lure youth to lower-priced alternatives such as cigars, snus and newer products such as dissolvable orbs. Ensuring that other tobacco products are taxed at a rate comparable to cigarettes helps curb youth usage.
New revenue from increasing the taxes on cigarettes and other tobacco products is estimated to be more than $434 million in the first two years. Combined with at least $1.65 billion in long-term health care cost savings from the cigarette tax, the increases will have a tremendous positive impact both on the state budget and for health care consumers in Minnesota.
Raising tobacco prices through regular and significant tax rate increases encourages tobacco users to quit or cut down and prevents kids from starting the habit. Research has consistently shown that every 10 percent increase in the price of cigarettes reduces youth smoking by 6.5 percent and overall cigarette consumption by about 4 percent. The $1.60 increase in Minnesota is expected to result in a 16.1 percent reduction in youth smoking in the state.
The current state cigarette tax in Minnesota of $1.23 per pack is 28th among all states and the District of Columbia. Nationally, the average state cigarette excise tax is $1.48 per pack; however, health costs and reduced productivity costs attributed to smoking are $10.47 per pack of cigarettes. In Minnesota, the smoking-caused health care costs in the state total $8.85 per pack.
In the past 10 years, only three states California, Missouri and North Dakota have not raised their cigarette tax. State cigarette excise taxes vary widely, ranging from a high of $4.35 in New York to a low of $0.17 in Missouri. Currently, 14 states, the District of Columbia, Puerto Rico and Guam have cigarette taxes of $2 or more per pack.
More than 9,500 people die every year from cancer in Minnesota, and nearly 30 percent of those deaths are directly attributable to tobacco use. This tax increase will curb tobacco use in the state and ultimately save lives, said Chris Hansen, president, ACS CAN, the advocacy affiliate of the American Cancer Society. Raising tobacco taxes is the most effective way to reduce smoking rates for both adults and youth. Thanks to this victory, thousands of Minnesotans won 't die prematurely from tobacco use and thousands of kids will never pick up the deadly habit.
The use of tobacco products remains the nation 's number one cause of preventable death, killing more than 443,000 Americans and costing $193 billion in health care and productivity losses each year.
ACS CAN, the nonprofit, nonpartisan advocacy affiliate of the American Cancer Society, supports evidence-based policy and legislative solutions designed to eliminate cancer as a major health problem. ACS CAN works to encourage elected officials and candidates to make cancer a top national priority. ACS CAN gives ordinary people extraordinary power to fight cancer with the training and tools they need to make their voices heard. For more information, visit www.fightcancer.org.