Reporting Heather Brown
Filed underBusiness, Consumer, Good Question, Local, News, Politics, Seen On WCCO-TV, Syndicated Local, Watch + Listen, WCCO-TV Shows
MINNEAPOLIS (WCCO) – Starting Monday, Minnesota’s tax on tobacco is the sixth-highest in the country.
The tax just jumped to $2.83 from $1.60, making the average pack of cigarettes in Minnesota now $7.51. Lawmakers who upped the tax said they did it not only to raise money, but to get people to quit.
There’s no doubt in researchers’ minds that price matters.
The question is how much, and how many people will stop smoking because of the cost?
“It’s the final push I needed,” said Becky Harvey of Shakopee. She said she’s going to try to quit for the second time over the next few months.
According to Clearway Minnesota, a nonprofit that works to reduce smoking, 36,000 of the state’s 625,000 smokers will quit and 47,000 people under age 18 won’t start.
The nonprofit uses data from the Campaign for Tobacco-Free Kids and the American Cancer Society.
“It’s a significant reduction in the number of smokers in Minnesota,” said Mike Sheldon, communications manager for Clearway Minnesota.
The Minnesota Department of Revenue estimates a larger drop.
Their models show stores will sell 28 percent fewer cigarettes because fewer people will start smoking, current smokers will cut back and people will get cigarettes elsewhere, such as North Dakota. The tax there is one of the lowest in the country at 44 cents.
“I don’t know that there’s a price that will get everyone to stop smoking, but we know that price is the biggest impact,” Sheldon said.
A Clearway study found smoking rates fell by 29 percent in Minnesota between 1993 and 2011. They attribute 43 percent of it to price, 20 percent to smoke-free laws, 19 percent to anti-tobacco campaigns, 11 percent to cessation treatment programs and 7 percent to youth access laws.
Economists with the National Bureau of Economic Research found small tax increases don’t have big effects on smoker choices.
“The pool is reduced to a strong preference for smoking, so it takes particularly large price increases to reduce their smoking propensity,” said Kevin Callison, an economist at the University of Illinois at Chicago.
He estimates Minnesota’s tax increase will cause 5 percent or less of its smokers to quit.