State Cigarette Excise Taxes—United States, 2009

April 9, 2010 / Vol. 59 / No. 13

MMWR Highlights

• In 2009, 14 states and the District of Columbia increased their taxes on cigarettes, resulting in a change of the average state excise tax from $1.18 per pack in 2008 to $1.34 per pack in 2009.
• The following states (including the District of Columbia) increased their cigarette excise taxes in 2009.

• The state cigarette excise tax increases ranged from 10 cents per pack in North Carolina to $1.00 per pack in Connecticut, Florida, and Rhode Island.
• The average state cigarette excise tax increase was 52 cents per pack and resulted in a rise in the national average from $1.18 per pack in 2008 to $1.34 per pack in 2009.
• Rhode Island and Connecticut became the first two states with a cigarette excise tax of at least $3.00 per pack.
• At the end of 2009, South Carolina had the lowest state cigarette excise tax at 7 cents per pack and Rhode Island had the highest state cigarette excise tax at $3.46 per pack.
• California, Missouri, North Dakota, and South Carolina are the only states that have not increased their state cigarette excise taxes in the last decade.
• Though the Institute of Medicine recommends that states dedicate a portion of their tobacco excise taxes to state tobacco control programs, none of the 15 states that increased their excise taxes in 2009 invested any of the money to tobacco prevention and control efforts.

Background

• Cigarette excise taxes are one of the most direct ways to increase the price of cigarettes, which reduces cigarette use and thereby reduces smoking-related death and disease.
• By preventing initiation, prompting quit attempts, and reducing cigarette consumption, cigarette excise taxes are a cost-effective method for reducing the state and national health burden as well as costs related to smoking.
• A 10% increase in cigarette prices results in a 4% reduction in consumption and can have an even greater effect among youth and other price-sensitive populations.
• Since 1950, there have been only 10 instances when 15 or more states increased their cigarette excise taxes in a single year.

State Tobacco Control Program Funding

• CDC recommends that states spend between $9.23 and $18.02 per capita on tobacco control programs.
  • States could reach their CDC-recommended funding levels by dedicating a percentage of their cigarette excise tax revenues and tobacco settlement revenues to tobacco control programs.
  • In the current budget year, fiscal year 2010, the states will collect $25.1 billion from the tobacco settlement and tobacco taxes. It would take less than 15% of this total to fund tobacco prevention and cessation programs in every state at levels recommended by the CDC. However, the states are spending just 2.3% of their tobacco revenue on tobacco control.
  • The more states spend on tobacco control programs, the greater the reductions in smoking—and the longer states invest in such programs, the greater the impact.
• In addition to reducing tobacco use, funding comprehensive tobacco control programs can also dramatically reduce health care expenditures within a state.
  • In the first 15 years of funding in California, the $1.8 billion dedicated to the California tobacco control program resulted in $86 billion in savings in health care costs, yielding a 50:1 return on investment.

Future State Cigarette Excise Tax Increases

• An interactive map is available that estimates the revenue that would be generated and the health benefits that would be realized if each state enacted a $1 cigarette excise tax increase.
• It is estimated that if every state increased its cigarette excise tax by $1, an additional $9.1 billion in annual revenue would be generated in the United States. Additionally, more than 1 million premature smoking-caused deaths would be prevented, and approximately 2.3 million children would avoid initiation.