1. INCREASING THE TOBACCO EXCISE TAX A PUBLIC HEALTH WIN A BUDGET WIN A POLITICAL WIN A WIN, WIN, WIN FOR <STATE>

2. Tobacco is the leading preventable cause of death, killing more than 400,000 each year Tobacco kills more people than from AIDS, alcohol, car accidents, murders, suicides, and fires combined Tobacco results in $96 billion in annual health care costs Nearly 90% of lung cancer cases, 1/3 of total cancer deaths, and 1 in 5 deaths from heart disease are tobacco related Tobacco’s Toll in U.S.

3. 3,500 kids try their first cigarette every day About 1,000 more kids become regular daily smokers every day; one-third will die from smoking-related diseases 20.0% of high school students smoke 25.7% used some tobacco product in the last month 20.6% of adults currently smoke Tobacco’s Toll in U.S.

4. IN XX tobacco-related deaths annually XX kids try first cigarette each year XX additional kids become regular daily smokers every year XX kids alive today will die from tobacco use XX% of high school students are current smokers XX% of high school males are current spit tobacco users

5. IN $XX billion in annual health care costs related to tobacco use $XX million in Medicaid costs alone taxpayers pay $XX per household to treat tobacco related disease

6. TOBACCO EXCISE TAXES A win for public health A win for state budgets A win among voters

7. “The single most direct and reliable method for reducing consumption is to increase the price of tobacco products, thus encouraging the cessation and reducing the level of initiation of tobacco use.” Taking Action to Reduce Tobacco Use National Academy of Sciences Institute of Medicine 1998

8. “It is clear that price has a pronounced effect on the smoking prevalence of teenagers and that the goals of reducing teenage smoking and balancing the budget would both be served by increasing the Federal excise tax on cigarettes.” Myron Johnson Philip Morris Research Executive 1981

9. MANY OTHERS AGREE U.S. Surgeon General National Cancer Institute U.S. Centers for Disease Control & Prevention Task Force on Community Preventive Services President’s Cancer Panel Institute of Medicine of the National Academies World Bank World Health Organization Wall Street Tobacco Analysts

11. "This is the tipping point," Voelz said. "People are saying, 'I know they are going to keep increasing the cigarette tax, so I'm going to quit.' “ State Health Commissioner Dr. Judy Monroe wanted an even higher cigarette tax. The data are clear, Monroe said: More smokers will quit as the price of cigarettes rises. Although lawmakers increased Indiana Tobacco Prevention and Cessation's budget this year by more than $6 million, to $16.2 million, that amount is less than the $35 million recommended by the Centers for Disease Control and Prevention for an effective anti-smoking program. The tax is expected to bring in $206 million by 2009; $1.2 million of it will go to Indiana Tobacco Prevention and Cessation. Gov. Mitch Daniels, Sneegas and Monroe on Wednesday announced a new anti- smoking campaign aimed at helping adult Hoosiers quit. The $380,000 plan, titled "There's never been a better time to quit," is a statewide blitz encouraging doctors to advise their patients to quit smoking and directing smokers to local resources that can help them quit. Daniels said the tax hike will have an immediate and lasting effect on Hoosiers. "The biggest impact of a higher price is on dissuading young people or nonsmokers from taking it up in the first place," Daniels said. Call Star reporter Michael Malik at (317) 444-6253. Tax hike could be habit-breaking Officials expect 23,000 Hoosiers to quit smoking, almost 40,000 youths not to start July 1st, 2007 Michael Malik Mary Ann Morrett has had enough. The 44-cent tax increase on cigarettes that goes into effect today made her two-pack-a-day habit too expensive. She's going to quit. "I can save myself some money by quitting smoking," Morrett said. Morrett, 56, Indianapolis, is just one of the expected thousands who will quit smoking because the tax increase makes it unaffordable. Based on two decades of federal data, state officials expect 23,000 Hoosiers to kick the habit in the next year because it is too expensive. Nearly 40,000 youths won't start smoking because of the increase. Those numbers are a small fraction of the 1.5 million Hoosiers, including 1.1 million adults, who smoke. Indiana had the fifth-highest smoking rate in the nation in 2006, an improvement from the previous year, when the state ranked second. Karla Sneegas, executive director of Indiana Tobacco Prevention and Cessation, said the smoking rate declined because so many communities -- 33 across the state -- passed sweeping anti-smoking ordinances. The estimated number of people who quit reduced the state's smoking rate by a percentage point, Sneegas said. The tax hike, to 99.5 cents per pack from 55.5 cents, will primarily fund health care for the state's working poor and childhood immunizations. But officials hope it will have the added benefit of persuading Hoosiers who smoke to quit. Peggy Voelz, who coordinates cessation programs in Bartholomew County, said inquiries from smokers wanting to take a cessation class are up by one-third. “I can save myself some money by quitting smoking,” Morrett said. “This is the tipping point,” Voelz said. “People are saying, ‘I know they are going to keep increasing the cigarette tax, so I’m going to quit.’” The data are clear, Monroe said: More smokers will quit as the price of cigarettes rises.

12. Stagnant Prices; Stagnant Smoking Rates Youth: –Between 1997 and 2003, avg. U.S. price rose by 90.5% and high school smoking declined by 40%. –Between 2003 and 2007, avg. price increased by 13%, and high school smoking decreased by 9%. Adult: –Between 1997 and 2003, price rose by 90.5%, and adult smoking declined by 12.5%. –Between 2003 and 2008, price increased by 17.1%, and adult smoking declined by about 4.6%.

13. Effects of a 10% Increase in the Price of Tobacco Nearly 7% decline in youth prevalence A 2% decline in adult prevalence A 4% decline in overall consumption

14. Tobacco Taxes are Most Effective with: Kids Pregnant Women Lower Income Populations

15. Tobacco Taxes & Pregnant Women  10% increase in price produces 7% decline in smoking  This is 3-4 times the effect as among smokers in general XX% of pregnant women in smoke cigarettes

16. Stopping Smoking During Pregnancy Means: Fewer low birthweight babies and attendant health problems Immediate medical cost savings for caring for low birthweight babies Fewer cases of spontaneous abortion, neonatal mortality, and SIDS Less exposure of babies to secondhand smoke “Some women would prefer having smaller babies.” -- Joseph Cullman, then Board Chairman, Philip Morris, Jan 3, 1971

17. Importance of Funding Tobacco Prevention with Part of Tax Combination of tax increase and prevention program will be most effective in reducing smoking. Industry price cuts and promotions (i.e., 2- for-1 offers, etc.) can undercut tax impact, so program is essential to success.

18. Adult Smoking Prevalence in Washington State (BRFSS) State cigarette tax increase to $2.025 per pack on 7/1/05. State cigarette tax increase to $1.425 per pack on 1/1/02. 22.6% 16.5% State smoke-free law went into effect on 12/8/2005. The state tobacco prevention program has been consistently well-funded since it was implemented in 2000.

19. Benefits of a $1.00 Tax Increase in XX fewer future youth smokers XX fewer adult smokers Saving XX deaths from a smoking- caused death

20. Tobacco Taxes & State Revenues Despite inevitable declines in cigarette consumption … Increasing tobacco taxes ALWAYS increases state revenues

21. Tobacco Taxes, Packs Sold, and State Revenues

22. The Texas Tax Experience From $0.41 to $1.41 on 1/1/07 - 21.0% Packs SoldRevenues Collected + 191.7% $523.4 Million $1.5 Billion1.2 Billion 1.0 Billion Orzechowski & Walker, The Tax Burden on Tobacco monthly reports

23. The Maine Tax Experience From $1.00 to $2.00 on 9/19/05 - 12.3% Packs SoldRevenues Collected + 76.5% $93.5 Million $165.1 Million 93.5 Million 82.0 Million Orzechowski & Walker, The Tax Burden on Tobacco monthly reports

24. The Montana Tax Experience From $0.70 to $1.70 on 1/1/05 - 42.0% Packs SoldRevenues Collected + 36.5% 71.0 Million 41.2 Million $51.3 Million $70.1 Million Orzechowski & Walker, The Tax Burden on Tobacco monthly reports

25. Tobacco Taxes & Revenues Stable; smoking declines are gradual Predictable; much easier to estimate than personal or corporate income tax revenues Adjustable; any declines can be offset by additional increases Produce health cost savings; declines in consumption offset by savings in health costs

26. Massachusetts Cigarette Tax Revenues, 1990-2009 (in millions) Rate increased by 75¢ to $1.51 per pack on July 25, 2002. Rate increased by 25¢ to 51¢ per pack on January 1, 1993 Rate increased by 25¢ to 76¢ per pack on October 1, 1996. Rate increased by $1.00 to $2.51 per pack on July 1, 2008. Orzechowski & Walker, The Tax Burden on Tobacco, 2008, and monthly reports

27. Maryland Cigarette Tax Revenues, 1990-2009 (in millions) Orzechowski & Walker, The Tax Burden on Tobacco, 2008, and monthly reports Rate increased by 34 cents to $1.00 per pack on June 1, 2002. Rate increased by 30 cents to 66 cents per pack on July 1, 1999. Rate increased by 3 cents to 16 cents per pack on June 1, 1991. Rate increased by 20 cents to 36 cents per pack on May 1, 1992. Rate increased by $1.00 to $2.00 per pack on January 1, 2008.

28. Benefits of a $1.00 Tax Increase in $XX million in new tobacco tax revenues $XX million in 5-year savings from reducing smoking during pregnancy and reduced heart attacks and strokes $XX billion in long-term healthcare savings from smokers averted $XX million in long-term state Medicaid program savings from smokers averted

29. Tax Evasion Issues There will be some, especially initially, but it will die down Revenue estimates take this into account Additional tax revenue far offsets any tax losses from crossborder sales, etc. Health and other benefits far outweigh these issues Most cigarettes purchased by the pack, not the carton Can take measures, like new stamps, that will reduce tax evasion and generate additional revenue

30. State Cigarette Tax Rates Average cigarette tax rate: $1.34 per pack 2 states with a tax rate at $3.00+ per pack: Another 13 states with tax rates at $2.00+ per pack: Another 13 states have tax rates of at least $1.00 per pack: Alaska Arizona Washington, DC Hawaii Maine Maryland Massachusetts Michigan New Jersey New York Vermont Washington Wisconsin Arkansas Delaware Florida Iowa Minnesota Montana New Hampshire Ohio Oklahoma Oregon Pennsylvania South Dakota Texas Rhode IslandConnecticut

31. RI: 346 CALIFORNIA NEVADA 80 OREGON 118 WASHINGTON 202.5 ARIZONA 200 NEW MEXICO 91 TEXAS 141 OKLAHOMA 103 UTAH 69.5 COLORADO 84 KANSAS 79 NEBRASKA 64 IDAHO 57 MONTANA 170 NORTH DAKOTA 44 SOUTH DAKOTA 153 MINNESOTA 156 IOWA 136 MISSOURI 17 ARKANSAS 115 36 LOUISIANA MS 68 ALABAMA 42.5 GEORGIA 37 FLORIDA 133.9 SOUTH CAROLINA 7 TENNESSEE 62 KENTUCKY 60 ILLINOIS 98 WISCONSIN 252 MICHIGAN 200 IN 99.5 OHIO 125 WV 55 30 VIRGINIA PENNSYLVANIA 160 NEW YORK 275 MAINE 200 VT NH: 178 MA CT: 300 NJ: 270 DELAWARE: 160 MARYLAND: 200 DC: 250 HAWAII 260 ALASKA 200 States that have recently passed or implemented a cigarette tax increase (since 1999) WYOMING 60 State Cigarette Tax Rates (cents per pack) State Average: $1.34 Per Pack CT MA: 251 87 VT: 224 States that have not passed tax increases since 1999 NH 45 NORTH CAROLINA State tax rates on tobacco products other than cigarettes vary greatly between states. December 2009

32. A Political Win Note: If you have data from your own state poll, use those data; otherwise, you can use the following slides from a January 2010 national poll.

33. Support For Increasing State Tobacco Taxes National Survey of 847 Registered Voters January 2010

34. Poll Highlights Increasing the tobacco tax is the most preferred way to address state budget shortfalls. –A strong majority of voters favor raising the tobacco tax as a way to address the state budget deficit, while no other option tested received majority support. –In fact, voters overwhelmingly oppose other tax increases or spending cuts that may be necessary to address the budget deficit. Two-thirds of American voters support increasing the state tobacco tax by $1.00 per pack. –This support remains strong across all demographic groups, including party lines. A majority of Democrats, independents and Republicans favor increasing the tobacco tax. There is no difference in support between a $1.00 and a 50-cent tobacco tax increase. A majority of voters across party lines would vote for a candidate who supports increasing the tobacco tax over a candidate who opposes increasing the tax.

35. Total numbers are rounded Darker shading indicates stronger intensity Increasing The Tobacco Tax Is The Most Preferred Way To Address State Budget Deficits As you may have heard, virtually all states are currently facing severe budget deficits. I am going to read you a list of proposals that have been suggested as a way to address the state budget deficit. After I read each one, please tell me if you FAVOR or OPPOSE that proposal. Reduce funding for education Increase the state gasoline tax Increase the state tobacco tax Oppose Favor 60% 17% 22% 74% International Communications Research Survey January 2010 Reduce funding for health care programs Increase the state income tax 20%76% 19%80% 81% 38% Increase the state sales tax 72% 25% Reduce funding for Medicaid services Reduce funding for road maintenance and construction Reduce funding for state law enforcement 81% 70% 78% 16% 26% 20%

36. Total Favor: 67% Total Oppose: 31% Would you FAVOR or OPPOSE a one dollar per pack increase in the state tobacco tax, with part of the revenue dedicated to a program to reduce tobacco use, particularly among kids, and the rest dedicated to addressing the state budget deficit? Voters Favor A One Dollar Increase in the State Tobacco Tax Darker shading equals stronger intensity Total numbers are rounded International Communications Research Survey January 2010

37. Total numbers are rounded Support for a One Dollar Tobacco Tax Increase Remains Strong Across Party Lines International Communications Research Survey January 2010 Would you FAVOR or OPPOSE a one dollar per pack increase in the state tobacco tax, with part of the revenue dedicated to a program to reduce tobacco use, particularly among kids, and the rest dedicated to addressing the state budget deficit?

38. Total numbers are rounded A One Dollar Tobacco Tax Increase Receives Majority Support Across the U.S. Would you FAVOR or OPPOSE a one dollar per pack increase in the state tobacco tax, with part of the revenue dedicated to a program to reduce tobacco use, particularly among kids, and the rest dedicated to addressing the state budget deficit? International Communications Research Survey January 2010

39. 50% strong 24% strong $1 Increase Voters Support a Tobacco Tax Increase There Is No Difference In Overall Support Between A $1 And A 50-Cent Increase 50-cent Increase Darker shading equals stronger intensity Total numbers are rounded 53% strong 24% strong International Communications Research Survey January 2010 67% 31% 67% 31%

40. Darker shading equals stronger intensity Total numbers are rounded Candidate X supports a one dollar per pack tobacco tax increase with part of the revenue dedicated to a program to reduce tobacco use, particularly among kids, and the rest used to address the state budget deficit. Candidate Y opposes the plan to increase the tobacco tax one dollar per pack because our state taxes are already too high. 59% 35% Voters Prefer A Candidate Who Supports Increasing the Tobacco Tax International Communications Research Survey January 2010

41. Voters of All Parties Prefer a Candidate Who Supports the Tobacco Tax 59% 66% Candidate Who Opposes Tobacco Tax Candidate Who Supports Tobacco Tax 35% 40% 30% Darker shading equals stronger intensity Total numbers are rounded 58%36% +24 +22 +36 54% Candidate X, who supports the one dollar per pack tobacco tax increase Candidate Y, who opposes one dollar per pack tobacco tax increase International Communications Research Survey January 2010 +14

42. Total numbers are rounded Even 4 out of 10 Smokers Support a One Dollar Tobacco Tax Increase International Communications Research Survey January 2010 Would you FAVOR or OPPOSE a one dollar per pack increase in the state tobacco tax, with part of the revenue dedicated to a program to reduce tobacco use, particularly among kids, and the rest dedicated to addressing the state budget deficit?