Sponsor Statement for CSHB 1 (STA)

"An Act relating to taxes on cigarettes and tobacco products;

and providing for an effective date."

CSHB1 (STA) is aimed at Alaskan youths who use tobacco products. Youth smoking and smokeless tobacco use rates in Alaska are higher than the national average. Within Alaska, the highest smoking rate is in the Bush (33%) and the lowest in the urban areas (25%). Nearly 84% of Alaskan adults started smoking between 10 and 20 years of age. In 1995, 36.5% of high school students were identified as current smokers; 23.5% of the high school boys were identified as current users of chewing tobacco.

Youth who use tobacco quickly become addicted to nicotine and most often become long-term users who suffer the damaging long-term health effects of smoking. Withdrawal from nicotine addiction is like withdrawal from other highly addictive substances: difficult and painful. Seventy percent of smokers say they want to quit, and millions try each year, but only 2.5% succeed in any given year. CSHB1(STA) seeks to stop our youth from ever using tobacco, and to decrease the number of adults already using tobacco. When passed, CSHB1 (STA) will move Alaska far ahead of other states in the fight against youth access to tobacco.

There are some enormous health and economic costs which flow from tobacco use. Some of these costs are easy to measure, some are difficult to measure and some are beyond measurement. Getting an idea of these costs can help the move toward health and economic policies that help control tobacco.

The costs that can be easily measured are those involved in delivering direct health care services which would not have been needed if tobacco was not used. In 1996 the state collected $16.7 million in cigarette tax revenues. That same year, the estimated economic impact of smoking in Alaska was over $194 million in direct health care costs related to smoking and tobacco products. Approximately $9.8 million of the direct health care costs were paid by state Medicaid. CSHB 1 (STA) will help recover some of the excessive medical costs created by the use of tobacco.

Other easily measurable costs that have been researched are: the costs of disability, increased illness, fire losses and forgone income due to early mortality. Tobacco use is the leading cause of death in Alaska. One out of five deaths in Alaska are tobacco related. The U.S. Centers for Disease Control estimates that 18,000 Alaskans currently under the age of 18 will die from tobacco-related diseases if effective action is not taken to end this epidemic. CSHB1 (STA) contains a tobacco tax of $1 per pack and provisions to inflation-proof the tax. This tax is the single most effective way to reduce tobacco consumption among children and adults, and thereby prevent premature deaths.

There are some costs related to tobacco use which are more difficult to quantify. There is the work of someone who becomes ill from tobacco use; the responsibility of trying to replace that person's work; the lack of access to advanced health care that creates a significant burden for an entire family; the illness or premature death of a tobacco user, which can hinder their children's education and doom them to a dead-end career and the disposable income devoted to maintaining a nicotine addiction. In some cases a significant portion of a family's disposable income is spent on maintaining a tobacco addiction, thereby preventing this money from being spent on family nutrition, education, or investment in productive capacity. Not only does this perpetuate the cycle of poverty, but it is a loss to the local economy, since the money goes instead toward the profits of large outside tobacco companies.

There is evidence that the poor quit smoking in larger numbers in response to price increases. Therefore, they will benefit to a greater extent than more affluent socioeconomic groups by a tobacco tax increase of $1 per pack. Additionally, since the number of children who will start to smoke is clearly inversely related to price, a large tax increase will make it possible to save large numbers of another generation from tobacco addiction. For every price increase of 10% we can expect to reduce consumption of tobacco products by an equal or greater amount among children and teens. The $1 per pack tax increase proposed in CSHB1 (STA) would reduce youth smoking in Alaska by an estimated 32% and prevent over 5,700 premature deaths among Alaskans currently under the age of 18.

There are costs that are very real but cannot be measured. These include reduced quality of life for the tobacco user, for those affected by second-hand smoke and for those people whose lives are torn apart due to the loss or illness of a loved one. The value of human life and human potential cannot be measured in economic terms. But our inability to quantify these aspects of tobacco use should not leave us blind to them. They are by far the largest of the true costs of tobacco industry products.

Legislators in our state have a constitutional duty to provide for the promotion and protection of public health. A $1 per pack increase in the tobacco tax and the provision to inflation-proof the tax will help ensure a continuous decrease in the use of tobacco products by the youth and adults of Alaska, as well as promote a continued trend toward healthier people and decreased health care costs.

Finally, a January 1996 statewide survey conducted by Mathematica Policy Research of Princeton, New Jersey found that 74% of Alaskans support an increase of $1 per pack in the state excise tax on cigarettes. This includes 75% of those identified as conservative, 75% of those identified as moderate, 73% of those identified as liberal and 55% of those identified as smokers. This legislation had wide public support in 1996 and it still does. CSHB1 (STA) is long overdue. I urge the passage of House Bill 1, a fair tobacco tax for all Alaskans.