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Cigarette tax cut smoking

FRANKFORT — The number of Hoosiers who smoke dropped by 20 percent after Indiana increased the tax on cigarettes to nearly a dollar last year, Indiana's top health official told a Kentucky legislative committee Wednesday.

Dr. Judy Monroe, health commissioner for the Indiana State Department of Health, said the state upped its cigarette tax 44 cents to 99 cents a pack on July 1, 2007. Since that time, the state has seen a 20.5 percent drop in the number of people who smoke.

"Every penny went to health programs," Monroe said of the proceeds from the tax.

Monroe's presentation to the Interim Joint Committee on Health and Welfare comes as Gov. Steve Beshear is again mulling the idea of asking lawmakers to boost Kentucky's cigarette tax to help deal with a growing projected budget shortfall of nearly $300 million.

Beshear asked lawmakers earlier this year to increase the 30-cent-a-pack tax to $1, but the measure died in the Republican-led state Senate. The increase would have generated a projected $369 million over two years.

With the state's revenues in a nose dive, several state senators are now more willing to consider an increase in the cigarette tax, a recent Louisville Courier-Journal survey found. The newspaper found that 20 of 37 senators would at least consider supporting an increase.

In a special lawmaking session — which Beshear has said he would consider calling — only 19 senators would have to vote for the measure for it to pass.

Rep. David Hawkins, D-Henderson, a doctor, has said he will propose raising the cigarette tax again this legislative session.

Kentucky has more smokers than any other state and has one of the lowest cigarette taxes in the country. The national average is $1.11 a pack.

Monroe said after Wednesday's meeting that it took several years for the state legislature in Indiana to pass the increase. Indiana Gov. Mitch Daniels pushed the tax increase as a way to improve health.

Indiana has realized that putting more money into smoking cessation decreases the amount of money needed to treat smoking-related illness, Monroe said.

"You're going to have to pay for it, either on the front end or on the back end," Monroe said. "It's cheaper on the front end."

Indiana is one of only seven states whose Medicaid program for low-income and disabled people pays for comprehensive smoking cessation tools, including counseling and nicotine replacement medication, Monroe said.

Indiana spends $17.1 million a year on smoking cessation. Kentucky, in contrast, spends $2.4 million a year. That money comes from tobacco litigation settlement money and is not from the state General Fund.

Rep. Jimmie Lee, D-Elizabethtown, who has supported an increase in cigarette taxes, said many legislators have questioned whether an increase in price actually leads to a drop in smoking. Some argue, Lee said, that people are buying cigarettes from other states or buying them through other means and aren't actually quitting smoking.

But Monroe said data from states that have increased cigarette taxes — such as California — shows an overall drop in lung cancer rates, which indicates that people do quit smoking when the price of cigarettes increase.

Monroe said all the money generated by the cigarette tax has gone into health programs, including a program for people who do not have health insurance. That means Indiana was one of few states that saw the percentage of uninsured residents drop last year.