Building an Economy that Works for Everyone

Impacts of Initiative 773

I-773 will raise the current Washington state cigarette tax by $0.60 and impose a comparable surtax on other tobacco products. The additional tax revenues ($160 million in fiscal year 2003) will be used to:

  • expand access to the Basic Health Plan (BHP),
  • fully fund the state’s tobacco prevention and control program, and
  • provide funding for other programs that effectively improve the health of low-income families in Washington state.

The expansion of these services to improve the health of Washington families will result in the following:

Increased Health Insurance Coverage through the Basic Health Plan

The Basic Health Plan (BHP) provides a no-frills package of health care coverage to Washington families with incomes at or below 58% of the state household median income (200% of the Federal Poverty Level). Typically, these are low-income working families whose employers do not provide health insurance. The participants pay a sliding scale premium share for their BHP coverage. Within two years, funding from the new tax will increase enrollment by 50,000 to cover 175,000 people.

Decreased Smoking and Smoking Initiation Rates

The cigarette tax will have significant public health impacts. The higher cost of cigarettes will deter youth and adults from starting to smoke, encourage individuals to quit smoking, and reduce cigarette consumption among continuing smokers.  This is particularly true for adolescents, young adults, and low-income people who are more sensitive to price factors.

As with most consumer products (including addictive products), the demand for cigarettes is expected to decrease when price is increased. Over the past decade, many states have raised their cigarette tax rates. These tax increases significantly reduced cigarette consumption in every one of these states.  Economic studies show that a 10% increase in the price of cigarettes will reduce overall smoking among adults by approximately 4%.  The U.S. General Accounting Office has estimated that smoking rates among youth will decline by 7-12% for every 10% increase in the price of cigarettes.

Cigarette price increases are most effective in reducing youth smoking rates when integrated into a comprehensive tobacco prevention and control program. Youth smoking rates declined significantly in Oregon, California, and Massachusetts as a result of the combined effect of a tax increase and a strong tobacco control program.

For Washington state, a $0.60 tax increase (or 15% price increase) should result in a 10.1% decline in youth smoking and prevent over 33,300 kids from smoking. The effect of the price increase combined with the implementation of a fully funded tobacco prevention and control program should result in even further health and economic savings.

  • Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

More To Read

March 20, 2024

I-2111: The Income Tax Ban Is A Spectacle, but One We Can’t Ignore

A way to waste time, energy, and money, I-2111 is costing more than just taxes

March 20, 2024

Let’s Go Washington: Three initiatives threatening to roll back years of progress

Here’s what you need to know about the initiatives on your November ballot

March 12, 2024

Washington’s Women Are More Protected This Equal Pay Day

Thanks to an update to the state's wage discrimination protections, Washington woman are closer to closing the wage gap