Friday, July 27, 2007

An Unforeen Consequence of Smoking Bans

With the decline in cigarette consumption in Illinois with our new state-wide smoking ban, it seems our senators will have to increase the increase in cigarette taxes to make up for budget shortfalls.

Might this happen with the new Congressional initiative to fund the State Children's Health Insurance Program (SCHIP) program?



RoseAG said...

The state I live in was contemplating an increase in the cigarette tax to find additional health care, and the fact that it is a declining tax factored into their decision to hold that for another try.

It does seem misguided to tax something to you hope will decline to fund something you KNOW will grow.

I am all for increasing health care access, but this particular ploy seems underhanded as you know they will be seeking to expand the revenue sources for this activity in the future and that cigarettes can not possibly fund it all.

I think it is a poor substitute for a broader more sustainable plan.

Bruce said...

In fairness, it sounds like they miscalculated the revenue target rather than expecting the revenue to decrease with the attrition of smokers.


Anything that decreases the prevalence of tobacco use for current and future generations works for me, and nothing works more effectively than significant price increases. Raising taxes makes more sense than any other method.

Unfortunately, we can never underestimate the ability of the state governments to find non-health care uses for any tobacco-related revenue. Wisconsin's governor securitized our Tobacco Master Settlement several years ago and then wiped out the entire fund to balance the budget over two years. The good intentions to fund cessation, prevention, and tobacco research all were wasted.

Better luck to our neighbors to the south...