среда, 2 мая 2012 г.

Quinn ties cigarette tax hike to health benefits


Whether successful or not, Illinois governors repeatedly have aimed at the same target for additional money to address the state's financial gap -- cigarette smokers. But for the first time, Gov. Pat Quinn has floated the idea of tying a cigarette tax hike to improving health care. The Democrat says a $1-per-pack increase would bring in nearly $700 million -- including federal matching funds -- to help close a $2.7 billion Medicaid short fall, with the benefits going well beyond.

 The thinking goes like this: Raising the price of cigarettes gives smokers incentive to quit and deters young people from starting. Since there'll be fewer smokers, the costs of treating smoking-related diseases should also go down. But the plan to essentially double the cigarette tax has raised questions about whether such a hike could indeed curb smoking, if it's a sensible funding source as the number of smokers dwindles, and if it would simply drive smokers to buy cigarettes elsewhere. "It makes sense from a public health perspective," said Heather Eagleton a spokeswoman for the Illinois division of the American Cancer Society.

 "We are aware that it is difficult to quit ... and this may be the final push they need to quit." Her group estimates that about $1.5 billion of the state's $14 billion Medicaid budget goes toward treating smoking-related diseases, such as lung cancer and Emphysema. However, business groups and smoker rights advocates say it's not so simple. "Why should a segment of the population that smokes have to pay for (Medicaid)?" said William Fleischli, a vice president of the Illinois Association of Petroleum Marketers and Illinois Association of Convenience Stores.

 He cites a 2010 study by Illinois State University that calls a cigarette tax an unstable source of income, especially as the number of smokers continues to shrink. The percentage of smokers has gone down dramatically over the last few decades, and though the rate of decrease has slowed, experts say it continues to dwindle as social attitudes change and smoking bans become more prevalent. There are about 1.6 million adult smokers in Illinois, roughly 17 percent of adults -- down from around 22 percent in 2000, according to the U.S. Centers for Disease Control.

 The governor tried to raise the cigarette tax before, as did his predecessor, Rod Blagojevich. The two most recent proposals passed in the Illinois Senate but died in the House. The cigarette tax was last increased in 2002, from 58 cents to 98 cents, under Republican Gov. George Ryan. Quinn's proposal to fix the state- and federally funded health insurance program, which serves about 2.7 million poor and disabled Illinoisans, also includes $2 billion in cuts to services and care-provider rates. "We've got to use our heads here," Quinn said Friday. "We ought to use this (cigarette tax) strategy to get revenue for Medicaid and also prevent bad things from happening in the first place.

That's what a good health wellness system is all about." Illinois' current 98-cent tax on cigarettes ranks 32nd highest among states, according to a 2012 survey by the Federation of Tax Administrators. But that ranking jumps into the top five for those who buy their smokes in Chicago and have to fork over a 68-cent city tax and $2 tax for Cook County. The suburb of Evanston also imposes a 50-cent tax in addition to the Cook County tax. "We feel that we're being singled out and picked on unfairly," said David Kuneman, a Midwest spokesman for The Smoker's Club, an advocacy group. He said smokers already bear an unfair tax burden and that state legislators should look to taxing alcohol. A tax hike in Illinois could increase sales in nearby states, experts say.

Indiana's tax is slightly higher than Illinois' and ranks 32nd, but it doesn't have the same county or city taxes. Meanwhile, Missouri's tax is 17 cents, which is the lowest in the nation. Illinois customers come into County Market Express in Taylor, Missouri, every day just for cigarettes, says 20-year-old clerk Aerick Steward. A pack of Camel's totals $4.66 compared with $5.41 in a nearby Quincy, Ill. convenience store. "When people get paid they come over and get cigarettes and buy by the carton," he said. The Illinois tax hike "would be good for business and we'd definitely have a lot more people coming here."

 However, economists say a boost in cross border sales wouldn't affect major metropolitan centers like Chicago or trump the other benefits. "If the price of something goes up, we've got a lot of evidence showing you've got a lot of smokers who will try to quit smoking," said Frank Chaloupka, an economist at the University of Illinois at Chicago. "It's basic economics." He estimates that some 60,000 smokers in Illinois would give up the habit for good if the tax goes up $1. The American Cancer Society has placed that estimate even higher, at nearly 73,000.

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