50-cent cigarette tax hike a political milestone but doesn’t go far enough to fight cancer

Published 1:42 am Saturday, March 10, 2018

By AL CROSS

Guest columnist

When a Republican-led state House passes a record increase in the cigarette tax to avoid cuts to education and other programs, it’s a historic moment in Kentucky.

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But the measure probably wouldn’t do much to improve the health of this woefully unhealthy state, contrary to what some proponents said in a debate Thursday. And it remains to be seen what will happen to it in the Senate.

The tax bill the House passed 68-25 would raise the tax 50 cents a pack, to $1.10, and would also impose the nation’s first per-dose tax on opioid prescriptions and repeal a small income tax credit. It would raise $250 million a year, and a companion budget bill uses the money mainly to avoid the education cuts recommended by Gov. Matt Bevin.

The 55 Republicans who voted for the bill deserve praise for taking care of education and showing their independence from Bevin. But those who talked about the cigarette tax helping the state’s health didn’t know or tell the whole story.

Higher cigarette prices discourage people from smoking, but when Louisiana raised its tax 50 cents in 2015, cigarette companies offered 50-cents-off coupons to keep smokers hooked. After a tax takes effect, they can gradually raise prices.

And 50 cents more a pack wouldn’t be a big hit for most smokers. The average retail price in Kentucky for a pack of non-generic cigarettes is more than $5. The big hit would be felt by lower-income people, who are more likely to be smokers. The tax “is really for many Kentuckians a tax on the poor,” said Rep. Jim Wayne, D-Louisville.

Wayne argued that the cigarette-tax hike should be coupled with measures to ease the state’s tax burden on the poor, which could be part of tax reform — something the state badly needs and Bevin says he wants but has been unable to gain traction for in the legislature.

Kentucky’s tax system is its most chronic public-policy problem. Overall, the biggest chronic problem is its poor health, which takes so much of our resources and makes much of the state unattractive to employers.

One-fourth of Kentucky adults smoke, a rate higher than any other state but West Virginia. So it’s no accident that we rank first in deaths from lung cancer, which accounts for one-third of our cancer deaths, and in cancer overall. Smoking-related health costs in the state are near $2 billion a year.

In trying to tackle the acute problem of the budget, the House made a stab at the biggest chronic problem but didn’t go far enough.

One factor was pressure from retailers along the state’s border who sell lots of cigarettes to people from states where the taxes are higher, such as Indiana (99.5 cents), West Virginia ($1.20), Ohio ($1.60) and Illinois ($1.98, more in some localities).

Altria Group, the parent company of top cigarette maker Philip Morris, included retailers in its organized legislative lobbying trip for the first time last month. Also on the trip were farmers, reflecting Kentucky’s strong tobacco heritage, but a big cigarette tax wouldn’t hurt the fewer than 5,000 Kentucky farmers who still raise tobacco. Tobacco and cigarettes are in a world market, in which one state’s declining smoking rate would be barely a blip.

Altria also owns U.S. Smokeless Tobacco Co., which has a plant in Hopkinsville, and is moving toward alternative nicotine-delivery devices. The bill would not raise taxes on them.

In those respects, the tax measure looks very much like a proposal made last fall by the Pegasus Institute, a new public-policy research center in Louisville. Its founder, Jordan Harris, said the health costs associated with smokeless tobacco and “new technology” are much less than with smoking.

The proposal paper was written by two University of Louisville researchers “supported by unrestricted grants from tobacco manufacturers” who have “no influence or input” on the research, the paper says. Harris said Pegasus has received no money from tobacco companies.

It appears that tobacco companies “came out with the 50-cent proposal to kind of blunt the effort to go to a dollar or higher,” said Ben Chandler, president of the Foundation for a Healthy Kentucky, which is managing the $1-a-pack campaign.

Still, it is “fairly remarkable” that the first big move in the first modern state budget to be drafted by Republicans includes the 50-cent hike, said Chandler, a Democrat who served in Congress and was state attorney general.

But for the advocates, the bottom line is cancer. “We don’t think 50 cents will have much impact on the cancer rate,” Chandler said. “The health advocates will tell you that you’ve got to have the sticker shock to have significant numbers of people either quit smoking or not start.”

Al Cross is a journalism professor at the University of Kentucky and publisher of Kentucky Health News, an independent news service funded by the Foundation for a Healthy Kentucky. This column originally appeared in the Courier-Journal.