The Kentucky House has approved a two-year spending plan Thursday, which includes a 50-cent increase to the cigarette tax. Under this measure, the state tax on a pack of cigarettes would increase to $1.10.
Ben Chandler, president of the Foundation for a Healthy Kentucky, said a 50-cent proposed increase is the largest in state history. But Chandler said it’s not enough. He said his organization would like to see the state cigarette tax bumped up to $1.60 per pack.
“We lead the nation in cancer,” Chandler said. “We think we’d get a much greater health benefit with $1.”
Across Kentucky, 8,900 people die every year from causes directly tied to smoking, according to the Campaign for Tobacco-Free Kids. And, in 2014, Medicaid and other insurers paid almost $2 billion in claims related to smoking.
Raising the tax by 50 cents would be about a 10 percent increase on the cost of a pack of cigarettes in Louisville. That could result in a 2.5 to 5 percent decline in overall smoking, according to research in the journal Health Affairs. A $1 increase, meanwhile, would be about a 20 percent increase and advocates say it would result in many more people quitting smoking.
Raising the tax wouldn’t only save the state on health care costs. According to the House budget, the 50-cent increase could create $127 million in additional revenue for the state, adding to about $282.9 million that’s already collected every year. Meanwhile, raising the tax to $1.60 would almost double the existing revenue stream, according to the Foundation for a Healthy Kentucky.
The Senate will soon take up the House proposed budget, and create its own version. Then, both chambers will have to come up with a compromise. Chandler said health groups are taking this as a first offer that can be negotiated.
“We take this as a hopeful sign that they’re moving in that direction,” Chandler said.
This story has been updated to reflect the spending measure’s passage.