Tobacco Prevention Program Newsletter, Spring 2010
By Paul Zemann
Will increased cigarette tax affect low-income Washingtonians most?
More than half of smokers earn less than $36,000 per year
As of press time, the Washington State Legislature failed to reach agreement on taxes and spending during the regular legislative session, requiring negotiations to continue into a special session. Facing a nearly $2.8 billion budget shortfall and to help narrow the budget gap the House and Senate agree that roughly $800 million needs to be raised through taxes. While the legislature continues to debate on certain points of each tax package proposals, consensus exists on other points; of particular interest, increasing the state cigarette excise tax by $1.00 per pack or more.
Many Washingtonians fear the tax increase will add to financial pressures many Washingtonians already face. Health advocates, however, believe it is a vital step in decreasing the smoking rate in our state. As Dr. Timothy Gardner, President of the American Heart Association, recently remarked, "Every time that the tax on tobacco goes up, the use of cigarettes goes down."
According to a 2009 Gallup poll, cigarette taxes are three times more likely to negatively impact people with lower incomes; generally individuals with lower-incomes smoke more than those with higher-incomes. In Washington, 34% of the lowest-income individuals smoke compared with 7% of those who earn $90,000 or more annually. While it is undeniable that the new $1.00 state surtax on cigarettes will impact more low-income Washingtonians (because of their higher smoking rates), they also stand to gain the most from this tax increase.
In addition to the public health benefits, the tax increase may be what it takes to encourage some smokers to reduce or stop smoking. About 90% of smokers smoke a pack or less per day; for 9 in 10 smokers, the new tax will be an additional cost of no more than $22 per month. This seems miniscule when compared with the cost of supporting the habit. The current average price for a pack of cigarettes is $7.12 (for a pack-a-day smoker, that's over $200 a month!). But, the added cost that this tax increase brings may be the final push some smokers need to kick the habit.
Currently, both the Senate and House bills propose that the revenue generated from the cigarette tax increase will fund essential services and programs. Senate Bill 6874 would provide funding for the Basic Health Plan, which would give over 36,000 low-income Washingtonians access to low-cost health care coverage. House Bill 2493 proposes using the majority of the revenue generated from the tax increase to go into the student achievement fund, expanding access to higher education. Additionally, an amendment to Senate Bill 6444 (Adopting the 2010 Supplemental Operating Budget), which passed in both the House and Senate, restores funding for the state's tobacco program. Restored funding will allow tobacco programs to continue extremely successful programs and services in decreasing tobacco consumption, including free tobacco cessation support.
While it seems clear that an increase in the tax on a pack of cigarettes will have a disproportionately heavy financial impact on lower-income Washingtonians, they also have the most to gain from stopping tobacco use. Many people with low-incomes want to stop smoking; they need to stop and they can stop, but historically they have had less access to treatment services and support. Trends in tobacco control are supportive of programs and services for the lowest income residents in Washington State. Clearly the increase in cost of cigarettes, with increased services for all Washingtonians, could also help many break the chain of addiction.