Anti-smoking group says cigarette tax hike would ease state budget woes

A bigger tax on cigarettes could be the answer to South Dakota's budget shortfall, according to a new report.
Released by a coalition of public health organizations, including the Campaign for Tobacco-Free Kids, the report suggests that by raising the cigarette tax by $1 per pack, South Dakota would collect $15.4 million more annually, while at the same time prompting more smokers to quit.
"This report shows that raising tobacco taxes is truly a win-win-win for South Dakota ...," said Matthew L. Meyers, president of Tobacco-Free Kids.
But John Boyd, owner of the Deadwood Tobacco Company in Deadwood, isn't buying the new report.
"Anything times zero is zero," he said.
Boyd said the argument that an increased tax can both raise money for the state and reduce the number of smokers is nonsensical.
"If you reduce the number of smokers, where do you get your money," he said. "If that's your intent to reduce smoking, then you're not getting the taxes."
About 20 percent of South Dakotans smoke, including 24.7 percent of the state's high school students, according to the South Dakota Department of Health. South Dakota's current cigarette tax is $1.53 per pack. The national average is $1.34.
The new report details both the revenue and health benefits of a $1 a pack tax increase, by state.
In South Dakota, the increase would save $145 million in health care costs and save 2,900 residents from premature smoking-related deaths. It would prevent 6,000 kids from becoming smokers and encourage 3,100 adult smokers to give up the habit, according to the report.
A national poll released along with the report found that 67 percent of voters support a $1 tobacco tax over other options, such as an income tax, gasoline or sales tax increase.
Boyd said a national survey doesn't give a fair look at the state.
"If it's a nationwide study; nationwide doesn't have anything to do with South Dakota," he said. "It's a skewed survey."
Boyd believes that another increase in cigarette taxes will only push people to buy their cigarettes in bordering states or online. Either way, it will mean less revenue for the state.
"If they think that it's going to make people quit; then they're going to lose revenue shares," Boyd said. "South Dakota will lose huge revenues."