Laura Colbert, executive director of Georgians for a Healthy Future, agreed the issues of drug prices and transparency, coupled with the role PBMs play in the equation, will come up…
Guest Blog By Michelle Putnam, MPH
For those inclined to live under a rock, the state of Georgia is in a deep recession, with revenues steadily declining over the past year and showing no sign of recovery. In Georgia, 20% of adults and 18% of high school students smoke, costing our $2 billion a year in smoking-related health problems. Is there a magic pill that would solve both of these problems at once? You bet there is. I give you, the tobacco tax.
Georgia’s current tobacco tax is $0.37, one of the lowest in the nation. This makes tobacco products incredibly cheap, which is one reason our youth smoking rate is on the rise. Approximately 10,000 Georgian teens become new smokers each year, and all together they purchase 23 million packs of cigarettes. Increasing our tobacco tax by $1 will not only raise our state $450 million, but it will also reduce teen smoking by 7%, no small amount when you consider that 185,000 teens will die prematurely from smoking related illnesses.
A tobacco tax can at times boggle the mind. If the goal of the tax is to prevent people from smoking, then how will the state earn money? Well, the truth is, most people will not quit smoking, they will simply pay more for their daily dose of tobacco products. Research shows that for every 10% increase in the cigarette tax, overall smoking will decrease by about 4%. In Georgia, about 195,000 adults will quit smoking if the cigarette tax increases by $1.
Of course, Georgians are suspicious of the word “tax.” Legislators are especially weary of it. Come November, they don’t want to be seen as raising taxes. So, arguments against the tobacco tax are circulating feverishly at the state capitol. Rural lawmakers say that their constituents will simply cross into Alabama or South Carolina to purchase cigarettes at a cheaper price. Others don’t believe that the tax will raise as much money as anticipated. After all, they say, how would Georgia raise any money if everyone quits smoking?
Here’s how. Let’s say ten people buy a pack of cigarettes today. The state would earn $3.70. Now, let’s say those same ten people bought a pack of cigarettes at a $1 tax increase. The state would earn $13.70. So, going with the research, let’s say two of those people quit smoking. The state would still earn $11.70. Now, let’s say one person decides to buy their cigarettes in South Carolina. The state would still earn $10.70, which is more than they would’ve earned with the original tax. So, even accounting for all the reasons we wouldn’t raise the tax, we’ve still earned more than we would have by keeping the tax at the current amount.
Now, even though it might make sense to raise the tobacco tax, it’s important to note that cents is what talks at the Capitol. Each year, the tobacco industry spends about $420 million marketing its products to Georgians. Tobacco companies don’t want to see even the slightest decline in their profit margins, and are actively lobbying against any increase in the price of cigarettes. Chances are that tobacco lobbyists talk to your legislator more than you do. So look out for arguments that appeal to your inner Tea Party, and instead remember the logical arguments behind the tobacco tax. It’s a win-win-win for Georgia: it raises revenue, lowers costs, and reduces smoking, which is something we can all support.
Michelle Putnam is Executive Director at HealthSTAT (Health Students Taking Action Together, Inc.)