STATEHOUSE — Lobbyists with the American Cancer Society and other health organizations are pushing hard this year for your lawmakers in Indianapolis to pass a two-dollar increase in the state’s cigarette tax.
The state’s cigarette tax is an issue discussed in nearly every legislative session in recent years. The last time the state successfully passed a cigarette tax increase was in 2007 when they passed a 44 cent increase, making the cigarette tax the current rate it is today at 99 cents per pack.
Bryan Hannon, government relations director for the American Cancer Society, told Indy Politics that Indiana’s smoking rates are alarmingly high and something needs to be done to curb that trend.
“Indiana has high smoking rates which lead to a number of other health conditions, whether that be higher cancer rates, heart disease, infant mortality,” he said. “We need to start tackling our high tobacco use rates and the best way to do that is to raise the price of tobacco products via an excise tax on cigarettes.”
One of the main arguments against raising the cigarette tax, especially by a whopping $2.00, has been that the state may see lower revenues despite the increase because it would force fewer people to buy cigarettes.
“We have decades of evidence when anytime a state has raised their cigarette tax, they have always produced new revenues,” Hannon responded. “Unfortunately, they (Indiana lawmakers) only did it by 44 cents in 2007, but even then we saw a 40-percent increase in revenue in that first year.”
Hannon said though revenues would gradually decline from cigarette taxes over time, the state would still bring in around $350 million in the first year of a $2.00 tax increase.
Hannon said the state is still bringing in more revenue from the 44-cent tax this year than it did in 2007. He said a $2.00 increase would likely force roughly 40,000 Hoosier tobacco users in Indiana to “kick their addiction.”
Hannon hopes that a good portion of the revenue from a cigarette tax increase if passed goes back into public health initiatives.
“There’s a reason we are 48th in the nation in public health funding,” Hannon said. “That’s because we’ve ignored it for too many years. We failed to adequately fund programs for too many years.”
If a $2.00 increase to the cigarette tax is successfully passed, it would increase the tax per pack of smokes to $2.99. That is on top of the federal cigarette tax rate of $1.01 per pack and the state’s sales tax of 7-percent.