Editorial: Drop in tobacco use statewide signals tax hike is having an effect

IBJ has editorialized several times over the years in favor of an increase in the state’s cigarette tax, most recently last spring after lawmakers approved a two-year state budget plan that tripled the fee smokers pay on all kinds of tobacco products.

Although we’ve been consistent in our support, we’ve always endorsed the increase with some trepidation. IBJ’s editorial board isn’t generally all in on tax increases—and trying to tax away behavior isn’t our favorite thing.

Still, we were convinced by evidence that higher tobacco costs lead more people to quit smoking, vaping or using other products—and that less smoking leads to better overall health for Hoosiers and lower health care costs for employers and employees.

So we were thrilled this week to see that state health officials have estimated that cigarette consumption in Indiana dropped 40% during the first three months after the tobacco tax increases took effect. The Indiana Department of Health also reported that enrollment in its smoking cessation program jumped nearly 40% over the same period.

The tax increase is “a huge policy factor for public health,” Miranda Spitznagle, director of IDOH’s Division of Tobacco Prevention and Cessation, said in a story written by the Indiana Capital Chronicle’s Leslie Bonilla Muñiz.

And Spitznagle told Bonilla that lawmakers’ decision to increase the tax on all types of tobacco means users can’t simply switch products to avoid the taxes. If they want to avoid the tax increase, they need to cut back or quit.

The Health Department used the State Budget Agency’s reports about tax receipts to calculate the drop in consumption. We’re a bit cautious about the efficacy of that approach, given that it’s likely at least some smokers in neighboring states probably came to Indiana to buy cheaper cigarettes, an advantage that disappeared with the higher tax.

But we are still confident that the tax hike is having an impact. The additional enrollments in the smoking cessation program is a positive sign, as well.

Meanwhile, the state is collecting more in taxes, despite the drop in sales.

The Capital Chronicle reports that Indiana collected $188 million in cigarette taxes from July through October—nearly three times its take over the same period last year.

We suspect that’s why lawmakers finally approved the increase. They were trying to fill a gap in the state budget that appeared after a revenue forecast predicted the state would collect less in taxes than lawmakers had believed when they started working on the two-year spending plan.

But as we said in a May editorial, we’re less concerned with why lawmakers approved the increase than that they did it.

We’re thrilled to see signs that tobacco use is falling already and are crossing our fingers that the health of Hoosiers will soon benefit.•

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