Cigarette tax becomes healthy habit

By JOSIE HUANG, Portland Press Herald Writer

May 3, 2002

Michele Gildard of Portland is down to 10 cigarettes a day from the 40 - two packs - she used to smoke. She just doesn't want to pay Maine's excise tax on cigarettes, the fourth-highest in the nation.

"It's coming out of my pocket," said Gildard, 41, a personal-care attendant. When the tax went from 74 cents a pack to $1 six months ago, Gildard grimly said, "I've got to learn to quit."

Many other Maine smokers will join Gildard in cutting back or quitting, smoking opponents predict. State analysts forecast that retailers will sell 3 million to 4 million fewer packs in the 12-month period ending June 30, down from 100 million the previous year.

The tax increase is expected to generate a record $94.9 million for the General Fund this fiscal year - $17 million more than last year - despite the reduced sales volume. That figure would make tobacco taxes the state's third-highest moneymaker, dropping the corporate income tax to fourth.

Smoker groups and tobacco companies are frustrated by the state's windfall. Collecting money from a few - adult smokers make up 22 percent of the population - for programs that benefit everyone is wrong, they say.

"We actually refer to it sometimes as 'tax profiling,' because you're taking a minority of the state's population and imposing a disproportionate tax burden on that group," said John Singleton, spokesman for tobacco giant R.J. Reynolds.

What is more, critics say, the tax increase is encouraging people to smuggle cigarettes across state borders and make purchases over the Internet. Both practices are illegal in Maine, said Elmer Pelletier, an analyst for Maine Revenue Services.

"If you buy cigarettes to be used in Maine, you're required to pay the excise tax," Pelletier said.

Anti-smoking leaders do not deny such practices - the Maine Lung Association has had talks with the Attorney General's Office about curbing Internet purchases. But they say the health benefits of bumping up taxes, when coupled with outreach efforts, far outweigh unintended consequences.

Tobacco is the "only product that we know of which when used as intended, it kills," said Dr. Lani Graham, Maine's acting health director.

In Maine, tobacco use kills about 2,500 residents each year and leads to $1.15 billion in health care costs, Graham said.

She said it may take a year or two to see the full impact of the tax increase, but that the outcomes appear good. Cigarette sales have dropped 19 percent since 1997, the year the state doubled the cigarette tax from 37 cents a pack to 74 cents and launched an aggressive anti-smoking campaign. The teen smoking rate, once among the highest in the country, has dropped 36 percent since 1997.

Ed Miller, executive director of the Maine Lung Association, called higher cigarette taxes "the single most-effective strategy for reducing smoking rates, especially among young people," who are especially sensitive to prices.

The association, in conjunction with the Maine Coalition on Smoking or Health, would like to see another tax increase. It reviews each legislative session to decide whether to advocate for one, Miller said.

"I think many people are predicting that we're going to have budgetary problems coming up, and this is a way to both solve those problems and at the same time reduce the consumption of cigarettes," he said.

A. Steve Waterman, 47, an artist from Portland, said he could not afford higher cigarette taxes, but he's too "hooked" to scale back on his unfiltered Monarchs.

"It bothers me, every time (the state) needs money they hit the smokers," said Waterman. He goes through 10 to 15 packs a week.

State government won't convince Waterman to quit, but health concerns might, he said.

The smoking is "starting to take a toll," he said. "I get short of breath."

Only three other states have higher excise taxes on cigarettes - New York ($1.50 a pack), Washington ($1.42) and Connecticut ($1.11). Four other states - Alaska, Hawaii, Maryland and Rhode Island - also tax cigarettes at $1 a pack.

Maine has received hundreds of millions of dollars to fight smoking as part of a settlement of a 1998 lawsuit filed by 46 states against the tobacco industry.

The Fund for a Healthy Maine, which will receive about $50 million a year for the next two decades, helps support the state's tobacco prevention and control program called The Partnership for a Tobacco-Free Maine.

One of the state's initiatives has included a hot line and the No Buts program. Launched last August, No Buts teaches retailers how to prevent the under-18 set from buying cigarettes, and rewards stores that comply with state law.

Staff researcher Beth Murphy contributed to this story.

Staff Writer Josie Huang can be contacted at 791-6364 or at: