By Terry Brooks

Newspapers, blogs, and the radio airwaves have been awash with comments regarding the governor’s proposal to increase the cigarette tax rate by 70 cents a pack. Many comments, paraded as fact, are simply not true.

To set the record straight, let’s be clear: having one of the lowest cigarette tax rates in the nation is bad for Kentucky businesses, and not the opposite. The main reason is that having the highest rate of adult smokers in the nation increases the costs that businesses pay to provide health insurance to their employees by $1.5 billion every year. Additionally, there is a cost to businesses of $2.1 billion in lost productivity. For this reason alone, the low cigarette tax rate and the high smoking rate make Kentucky a less than desirable place to do business. Certainly this is the crux of the reason that the Kentucky Chamber of Commerce supports a higher tax rate on cigarettes.

Second, if we truly care about low-income smokers’ pocket books, let’s help them quit smoking so that they can spend their money on more important items than cigarettes. The 70-cent increase is predicated on the fact that many smokers want to quit and a high cigarette tax increase is proven to give them the incentive to finally break the habit. For this reason, the only tax increase that is truly burdensome to smokers is one that is low enough to not provide any economic incentive to give up a costly habit.

Third, it’s time to fairly distribute the costs of smoking. Currently, all of us -- smokers and non-smokers alike -- pay the cost of smoking. We pay it in our taxes that provide Medicaid for smoking-related illnesses. We pay in higher health premiums. And we pay because Kentucky is a less than desirable place to do business. In fact, the low state tax rate acts as a subsidy to encourage smokers to continue their habit. A 70-cent increase would go a long way towards having those who choose to smoke pay the real cost.

Fourth, let’s be honest -- a cigarette tax rate any lower than 70 cents is simply a way to raise money. It borrows from the future health of the Commonwealth for provisions today. A lower rate will do nothing to encourage smokers to quit and will do little to decrease the smoking rate in the state. In fact, a lower cigarette tax rate is nothing more than a burden on the poor masqueraded as fiscal conservancy.

In a nutshell, the facts support an increase of no less than 70 cents. The long-term physical health of the Commonwealth depends on a decrease in the smoking rate. A significant increase in the tax on cigarettes is the most effective way to get people to quit smoking. According to the Campaign for Tobacco Free Kids and the Center on Budget and Policy Priorities, an increase of 70 cents will decrease the youth smoking rate in Kentucky by 16.5 percent and the adult rate by 5 percent.

It’s time to stand up and make responsible decisions that make sense for Kentucky’s long-term health and economic viability. It’s time for a 70-cent increase in the cigarette tax.
Brooks is executive director of Kentucky Youth Advocates.
Copyright (C) 2009 by the Kentucky Forum. 2/09