Oklahoma raised the state tax on cigarettes by $1 a pack last year, reducing cigarette sales and increasing state revenue.
After a decade of debate about how to fund better state education budgets, the Legislature approved House Bill 1010xx last year. It raised tax rates on gross production, cigarette and fuel taxes.
Even if the cigarette tax didn’t raise an extra penny for the state, it was the right policy. A higher cigarette tax discourages all smokers and especially discourages younger smokers.
Smoking is the No. 1 cause of preventable death. If the state can reduce smoking, it will save itself health care costs and, at least hypothetically, raise sales and income tax revenue as people live and work longer.
But that only looks at the situation from the bottom line of state finance.
More important, if Oklahomans quit smoking — or if they never start — they will be healthier, happier and richer as a result.
If you want less of something, tax it.
That strategy is working in Oklahoma. Last year, tribal smoke shops and nontribal cigarette retailers sold 59,638,490 fewer packs of cigarettes, according to Oklahoma Tax Commission records.
While a higher price point discouraged demand for cigarettes, it didn’t push the cost beyond the point of diminishing returns. State revenue on cigarette taxes rose $133 million. The state has to share some of that money with the tribes. We only have 11-month figures on the tribal rebate so far, $44.9 million, but clearly the state is going to have a lot more money to spend because of the tax hike.
The state could do more to discourage smoking and raise money. The state’s cigarette tax doesn’t apply to e-cigarettes, which are subject only to the state sales tax.
E-cigarettes are certainly addictive and almost certainly dangerous. The surgeon general says that nicotine exposure during adolescence can harm the developing brain and can affect learning, memory and attention. The aerosol that users inhale and exhale from e-cigarettes can potentially expose them and bystanders to heavy metals, volatile organic compounds and ultrafine particles that can be inhaled deeply into the lungs, the surgeon general says.
Oklahoma’s cigarette tax increase is saving lives, reducing demand for cigarettes, funding public schools and putting more money in the pockets of people who are smoking less.
It’s a policy that has worked and an indicator of what the state should do next.
Mayor G.T. Bynum speaks during the 1921 Mass Graves Public Oversight Meeting.