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As state lawmakers consider increasing public health funding, is now the time to increase the state’s cigarette tax?
A principal recommendation of the recent Governor’s Public Health Commission report is the urgent need to increase state funding for public health. It’s an essential component of the commission’s plan to improve Indiana’s health. In fact, it recommends a funding increase from the present $55 per person to the national average of $91. That’s not enough, but it’s a good start.
Historically, the Legislature has placed public health funding at a very low priority; according to the United Health Foundation’s America’s Health Rankings of the states, Indiana is 45th-lowest (alternatively reported as 48th by some sources). It’s just an unfortunate Hoosier tradition.
The report demonstrates that Indiana’s lack of public health funding is reflected in our miserable state of health; Indiana persistently ranks in the bottom 10 states on key health measures, resulting in unacceptable losses—both human and economic. According to the U.S. Centers for Disease Control and Prevention, Indiana ranks 40th-lowest in life expectancy. I could go on.
It’s time, once again, to consider increasing the cigarette tax, not only to discourage smoking but also to use the new tax revenue to fund the numerous proposals recommended by the commission. It’s an obvious source of funding.
How many times over the past 25 years have I called for increasing the cigarette tax, and how many times has the Legislature failed to act? The influence of the tobacco industry on Indiana legislators runs dark and deep and many times is present indirectly through other entities acting on its behalf.
One of the first things I learned in politics is to never expect a politician to do the right thing because it is the right thing to do. It’s time during this upcoming budget session for the General Assembly to muster the political courage to do the right thing and increase the cigarette tax. It’s just that simple.
Indiana’s tax is $0.995 per pack, with the last increase in 2007. The national average is $1.91. And look at our surrounding states: Michigan’s cigarette tax is $2 per pack; Ohio’s is $1.60; Illinois, $2.98; Wisconsin, $2.52; and even the tobacco state of Kentucky is $1.10. These states have understood that increasing tobacco taxes discourages the amount of smoking, increases cessation rates, discourages youth initiation, and provides increased tax revenue.
Indiana has some catching up to do. Despite decreased smoking rates resulting from increased taxes, economic studies have never demonstrated a point of diminishing tax revenue, even in the states with the highest cigarette taxes—New York and Connecticut are $4.35 per pack.
It is well known from multiple authoritative sources that increasing the cigarette tax is probably the most effective single strategy for reducing smoking rates. It’s particularly effective when combined with a comprehensive, multifaceted state smoking prevention and cessation program, which has also languished in Indiana from inadequate funding. According to the American Lung Association, every 10% increase in the price of cigarettes reduces consumption about 4% among adults and about 7% among youth.
The CDC ranks Indiana 10th-highest in adult smoking (19.2%). Reducing that rate is key to improving the health of Indiana. A $1.50 per-pack increase would raise $262 million in tax revenue—$240 million could be used to fund the commission’s recommendations and $22 million to restore Indiana’s once-vibrant tobacco prevention and cessation program.•
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Feldman is a family physician, author, lecturer and former Indiana State Department of Health commissioner for Gov. Frank O’Bannon. Send comments to ibjedit@ibj.com.
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