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Evidence Shows Cig Tax Hike Won't Chase Sales Out of State

Anti-smoking groups say evidence shows tobacco tax increases don't chase sales out of state.(WalletHub)
Anti-smoking groups say evidence shows tobacco tax increases don't chase sales out of state.(WalletHub)
January 28, 2016

CHARLESTON, W. Va. - In spite of industry arguments, anti-smoking groups say the evidence shows a sharp boost in the state's tobacco tax won't drive sales out of the state. West Virginia's cigarette tax is more than $1 a pack under the national average. Gov. Earl Ray Tomblin wants to raise that 45 cents, less than half what health groups favor.

Convenience stores and gas stations argue that a $1 a pack hike would drive sales over the border to lower-tax neighbors. But Christine Compton, government relations director with the American Heart Association, says what's happened in other states show the drop is tiny and doesn't last.

"There will be a drop in sales on those border counties and border-state sales for about three months," says Compton. "There are people who quit, but then, like I said, they're spending their money on other items."

According to the Campaign for Tobacco Free Kids, studies from Maryland and from the Kansas-Missouri border follow that pattern. Compton says a sharp tax hike here will convince some to quit and others not to start, but she says that's the point.

She says each smoker costs West Virginia taxpayers about $10 or $11 more a year in health-care costs than they pay in tobacco taxes, costing the state budget millions. So, Compton says the state can raise more revenue while getting more people to quit. And taxpayers will win both ways.

"That's the most important thing to look at here," says Compton. "We need to be more forward-thinking and think about how we're going to save money on the other side of things and not just worry about losing a few dollars in sales."

West Virginia has one of the highest rates of tobacco use in the country. It's fallen steadily in most states, often in connection to higher taxes.

Financial website WalletHub estimates when long-term health costs and lost work days are included, cigarettes cost each smoker about $25,000 a year.

The website says smoking causes nearly half a million premature deaths a year.

Dan Heyman, Public News Service - WV