How Does I-773 Affect Washington Businesses?

What Will I-773 Do?

I-773 will lead to an additional $0.60 tax per pack of 20 cigarettes, generating $160 million in  fiscal year 2003, $159 million in fiscal year 2004, and more than $155 million in every fiscal year  thereafter. These revenues will fund 50,000 additional slots in the Basic Health Plan, fully fund  the state’s tobacco control and prevention program, and finance programs that reduce disease  among low-income families. Through decreases in smoking and increases in access to health care, I-773 will save  Washington an additional $630 million in future long-term, tobacco-related health expenditures.

What Effect will I-773 Have on Smoking?

The increased cost of cigarettes will lead to substantial reductions in cigarette smoking by  deterring smoking initiation, prompting smoking cessation, and reducing the average cigarette  consumption among continuing smokers. This will be particularly true for youth who are more  sensitive to price factors. Over the past decade, many states have raised their cigarette tax rates.  These tax increases significantly reduced cigarette consumption in every single one of these  states.

What Benefits Will I-773 Create for Businesses? Aside from the obvious benefit of reducing youth smoking, a tobacco tax will translate into better  employee health, and financial savings for businesses. Less smoking means a healthier  workforce. A healthier workforce means higher productivity and longevity among employees.

  • Employees who smoke are 50% more likely to call in sick to work than non-smokers,  incurring higher temporary replacement and sick leave costs, as well as productivity  losses.
  • Smokers also tend to have higher turnover rates, die younger, and retire sooner, all of which lead to higher recruitment and retraining expenses.
  • Smokers lose work time to smoke breaks. An employee who spends 30 minutes a day on  cigarette breaks loses 6% of the entire work year.
  • Workplaces that still allow smoking face lower employee morale, higher risks of fire and  property damage, higher cleaning and maintenance costs, and increased costs for  accidental injury and related workers compensation. For these employers, reduced  smoking translates into reduced costs.
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