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Thursday, January 18, 2018

Senate health committee recommends $1 increase in cigarette tax; doctors say it would increase state revenue and save lives

By Melissa Patrick
Kentucky Health News

FRANKFORT, Ky. – What started as an information-only hearing about the benefits of raising tobacco taxes in tobacco-friendly Kentucky ended with an unexpected vote of recommendation by the Senate health committee to raise the state's cigarette tax by $1 a pack, to $1.60.

Sen. Julie Raque Adams, chair of the Senate Health and Welfare Committee, opened the Jan. 17 meeting by making clear that the hearing on the idea was meant to "open the conversation" about what it would mean for the state, since Gov. Matt Bevin has said tax reform will be considered in 2018 – meaning a special session if not in the current, regular session.

But after compelling testimony and a long list of statistics about how smoking-related illnesses plague the health and economics of the state – which the legislators said they'd heard many times before – Sen. Alice Kerr, a Republican from Lexington, moved  that the committee recommend a $1 "health-care assessment" on cigarettes, the concept proposed by Sen. Stephen Meredith, R-Leitchfield.

Adams, R-Louisville, initially declined to call a vote on the motion, but after several members said they would second it, she allowed the vote for recommendation, and it passed without dissent. The action has no legislative effect but could be an indicator of increasing support for the tax.

Dr. Jason Chesney, the director of the University of Louisville James Graham Brown Cancer Center, told the committee that while he was against raising taxes in general, he considered increasing the cigarette tax by $1 a "health-care policy."

"It's been proven in state after state that if you raise the cigarette tax by $1, then you will reduce youth smoking . . . and in turn that will lead to less adults smoking," he said. The proposal would make similar increases in state taxes on other tobacco products.

Kentucky has some of the highest smoking rates in the nation for both adults and teens, 24.5 percent and 14.3 percent, respectively.

Dr. Mark Evers, director of the University of Kentucky Markey Cancer Center, told the committee that estimates from the American Cancer Society and the Campaign for Tobacco-Free Kids show that raising the cigarette tax by $1 will keep approximately 23,000 of Kentucky's youth now under 18 from becoming adult smokers, and would reduce the current number of youth smokers by 4,800.

Chesney noted that Kentucky leads the nation in the number of people with cancer and the number of deaths from it, and that 34 percent of those cancer deaths are due to smoking.

He said that even though he cares for thousands of cancer patients every year, and has developed anti-cancer drugs, "I can say with confidence that this initiative is more important than anything I'll do in my life."

Evers concurred: "Senators, I'm here to tell you that given this information, raising the tobacco tax by at least $1 may be the single most important, significant policy measure you can take in your lifetime, and certainly as Dr. Chesney said, in my lifetime to improve the health of Kentuckians."

Ashli Watts, senior vice president of public affairs for the Kentucky Chamber of Commerce, told the committee that over 90 percent its members favor the $1 increase, and she noted a recent statewide poll that shows over 70 percent of Kentuckians support it, regardless of political affiliation.

Watts said smoking costs the state nearly $2 billion annually in health-care costs, with almost $600 million of that for Medicaid – which are taxpayer dollars. She added that lost worker productivity caused by smoking in the state totals more than $2.3 billion.

"Kentucky business leaders know that increasing the cigarette tax will improve our companies bottom line, help us attract new businesses and workers, produce a more productive workforce and most importantly save lives," she said.

Meredith said he is looking for a House sponsor for his legislation because revenue-raising measures must originate in the House. A retired hospital CEO, he told the committee that he had worked in health care for more than 40 years and that when it comes to smoking and the poor health of Kentuckians, nothing has changed.

"It's time to stop having this conversation and start action," he forcefully told the committee.

Sen. Max Wise, R-Campbellsville, asked the panel and the committee about the "slippery slope" that this type of tax presents, asking, "What's next? . . . Is it a war on Twinkies?"

Watts responded by saying that the Chamber members have drawn a pretty clear line on this issue because, "When you smoke, everyone in that room also inhales that smoke as well. When you drink a soda, the person sitting next to you is not going to be affected. So that is where we have kind of drawn the line."

Other statistics shared by the panel included:

Health impacts of smoking in Kentucky
  • 3,000 Kentucky kids will start smoking this year
  • Smoking doesn't just cause lung cancer, it can also cause bladder cancer, heart disease, emphysema, bronchitis, asthma and congenital birth defects
  • Smoking kills more people in Kentucky than alcohol, HIV/AIDES, car crashes, illegal drugs, murders and suicides combined
  • Smoking related diseases make up six times the number of deaths in Kentucky, compared to deaths from the opioid epidemic
Economic impacts of smoking in Kentucky
  • Smoking cost every tax payer in Kentucky about $1,100 each year
Raising the cigarette tax by $1 would:
  • Would lead 29,400 current adult smokers to quit
  • Prevent 14,800 premature deaths
  • Reduce the number of smoking affected pregnancies and births by nearly 6,000 in 5 years
Health-care cost savings from a $1 cigarette tax increase:
  • $5.3 million over 5 years in the cost of treating lung cancer
  • $14.7 million over 5 years for the cost of treating pregnancies and births affected by smoking
  • $11.6 million over 5 years for treating smoking related heart attacks and strokes
  • $6 million over 5 years in Medicaid spending for smoking related costs

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