Cigarette Tax Increase Leads to Drop in Smoking

Raleigh, N.C. — A year after North Carolina increased its cigarette tax, cigarette sales statewide dropped by 18.5 percent, state officials said Monday.

At the same time, the tax increase generated an extra $157 million in state revenue, officials said.

The North Carolina Division of Public Health and the North Carolina Department of Revenue compiled the data covering a year from September 2005, when the state raised the tax from 5 cents to 30 cents per pack. Another nickel was tacked onto the tax last July.

"The impact that a tobacco tax makes on smoking cessation, increased revenue and decreasing health care costs is well established in the national literature. It's great to see it play out in North Carolina," said Dr. Leah Devlin, state health director.

Research shows that, for every 10 percent increase in the cigarette tax, there is a 4 percent to 7 percent drop in smoking rates, with the largest effect among youth smokers, Devlin said.

The state's smoking rate has dropped steadily in recent years. Adult tobacco use rates have dropped from 25 percent in 2001 to 22.1 percent last year, and now are 2 percentage points higher than the national average.

Smoking rates among middle school and high school students fell even more dramatically over that time, with middle school rates dropping by 61 percent and high school rates falling by more than a third.

For every percentage point drop, anti-smoking advocates estimate $1 billion in long-term health care savings.

"We have enormous challenges ahead, and this is a very evidence-based, very effective strategy for bringing down those smoking rates," Devlin said.