Ohio is facing an estimated $1.25 billion (or higher) budget gap in the state operating budget over the next 14 months. Right now, lawmakers are debating, compromising and waffling on the final budget bill to meet the June 30 deadline. A vote might even have been held by the time you get this paper, although the talk was still just that – talk – as of presstime Tuesday.
One of the proposals generating the most heat is a proposed 50-cents-a-pack increase in the state cigarette tax – from 24 cents to 74 cents. Proponents estimate the tax would generate roughly $400 million annually. The discussion is so heated that earlier this week, lawmakers filtered the cigarette tax proposal down to 36 cents a pack.
There are those who call the cigarette tax a “moral hazard” because it poses a greater hardship on the poor, who must now spend a disproportionately higher amount of their income on a pack of smokes. The argument is that the poor are the ones who can least afford the tax, are the ones most in need of discretionary income and are therefore the ones hit hardest.
Every dollar taken away from smokers is one dollar less saved or spent on necessities or other pursuits. I’ve never understood this logic, because it seems fairly black and white to me: If you don’t have enough money to pay your electric bill, why are you burning money by buying cigarettes?
There are those who proclaim a cigarette tax will send the smokers underground to buy cigarettes. Opponents say if smokers can buy them cheaper in any of the adjacent states, they will do so, or buy online from an Internet site, hurting Ohio businesses.
I will grant opponents this argument. If stores lose sales and profits, they will have to cut back on other expenditures. Some may close. But, according to the Campaign for Tobacco Free Kids, Pennsylvania’s cigarette tax is 31 cents per pack, 7 cents higher than Ohio’s current tax, and Michigan’s tax is 75 cents a pack. Don’t look for residents in eastern Ohio and northwestern Ohio to cross state lines to buy cigarettes.
Other border states have lower cigarette taxes than Ohio. West Virginia tacks 17 cents on to every pack; Indiana, 15.5 cents per pack; Kentucky, only 3 cents. Yes, it’s likely smokers will hop in the car and drive out-of-state to buy cigarettes if the tax is enacted.
And there are those who say “why not tax soda, Nintendo or potato chips” because the health costs of obesity or a sedentary lifestyle are just as great as smoking costs.
Consider this, however: Each pack of cigarettes sold in the United States costs the nation an estimated $7.18 in medical care costs and lost productivity.
That’s the reality of figures released just one month ago by the Centers for Disease Control.
For each of the 22 billion packs of cigarettes sold in the United States in 1999, $3.45 was spent on medical care related to smoking. Another $3.73 per pack was spent on productivity losses from smoking. Overall, the economic cost of smoking equaled about $3,391 per smoker per year, the CDC states.
As a side note, the report said, on average, adult men and women smokers lost 13.2 and 14.5 years of life, respectively, because they smoked.
My seventh-grader came home last week with a little chart that showed how much a lifetime of lighting up costs an individual smoker. Without adjusting for inflation or rising costs, someone who smoked a pack a day for 50 years coughed up $64,000 to cover his habit.
Regardless of Ohio’s vote on its additional sin tax, those are the numbers smokers really ought to ponder.
