Investing in Tobacco-Free Youth, http://investinginyouth.org. For additional information, contact Shelly Kiser at skiser@ohiolung.org or Cresha Auck-Foley at cresha.auck@heart.org Common Sense Approach Today's tobacco industry is evolving for the 21st century, innovating products and finding new ways to hook nonsmokers while keeping existing customers addicted. The products may be changing but their goal remains the same -to profit from a deadly addiction. Ohio's laws governing tobacco have not kept up with the rapidly changing tobacco products market. As a result, many tobacco products are either skirting existing laws or are not covered at all. Ohio's tobacco taxes have not kept pace with national trends, and our unchecked smoking rate among Medicaid recipients begs for reform. Also, with a looming budget deficit, we need to eliminate tax credits that no longer make sense and prevent tax evasion to maximize revenue. The Tobacco Modernization Act of 2011 is a common-sense solution that will modernize Ohio's tobacco laws, reduce tax evasion and reduce youth access to tobacco products. Tax Reform -Increase the Cigarette Tax: Unlike many states, Ohio has not increased its tax in over five years.An increase of $1.25 could generate $347.3 million new additional dollars in the first year while reducing youth smoking. -Equalize the Tax on Other Tobacco Products (OTP): Equalizing this tax with the cigarette tax would generate $50 million per year which is greatly needed to fund tobacco prevention and cessation programs. -Eliminate the Tobacco Tax Credits: The discount for cigarette tax stamps and the discount for timely payment of the other tobacco products’ excise tax are unnecessary perks, and their elimination would provide the state almost $30 million over the biennium. -Institute High-Tech Tax Stamps: High-tech tax stamps are difficult to counterfeit. Therefore, they reduce cigarette tax evasion, increase government revenue and stop illegal cigarette sales at below-market prices.21st Century Reform-Fund Tobacco Prevention and Cessation Programs Using Funds Generated from the Equalization of the Tobacco Taxes:Smoking rates are poised to rise in Ohio, due to the elimination of tobacco prevention and cessation programming. Comprehensive programming is proven to reduce the high smoking rates that affect the healthcare costs of Ohio businesses, the state budget, and every Ohio taxpayer.-Reclassify Filtered "Little Cigars" as Cigarettes. Many "little cigars" manufacturers are using strategies to create products that meet very minimum qualifications as cigars, and therefore qualify in the lower tax category and skirt other regulations, despite the products being used as cigarettes.-Change Existing Smokeless Tobacco Language to Cover New Tobacco Products: Update the existing language that defines tobacco to ensure that new forms of tobacco currently test marketed in Ohio are covered by existing tobacco regulations.Medicaid Reform-Provide Cessation Counseling to Medicaid Recipients for Medicaid Cost Containment: Since 43.1% of Ohio’s Medicaid recipients smoke, a comprehensive Medicaid cessation benefit would further reduce tobacco’s impact on the Medicaid budget. Ohio Tobacco Modernization Act 2011Closing the loopholes is common sense and good for businessBusiness ImpactHealthcare Impact *$1.25 cig. tax increase•5-year health savings from fewer smoking-affected pregnancies & births: $37.0 million •5-year health savings from fewer smoking-caused heart attacks and strokes: $35.4 million •Long-term health savings in state from adult & youth smoking declines: $3.0 billion Healthy Workforce Impact •Businesses want to contain costs -healthcare, productivity, absenteeism, etc. Increasingly, businesses are opting to not hire smokers. By reducing smoking rates, the state can ensure that Ohioans are ready for the realities of the 21st century workplace and that Ohio businesses remain competitive. •The U.S. Surgeon General estimates that smoking results in more than 81 million lost workdays annually. The absenteeism rate is 57% higher for smoking men and 45% higher for smoking women than for nonsmokers. Solutions Ohioans Support OTP polling data•Voters support equalizing the tobacco taxes with funds going to tobacco prevention and cessation. In a recent poll, 74.9% of Ohioans support taxing all products at the same rate and using the new funding for tobacco programs. •Ohio can refund tobacco prevention and cessation to previous levels. Basing the program on CDC recommended components will further reduce the burden of tobacco in Ohio. Cigarette Polling data •Given six budget solutions, Ohioans only supported increasing the cigarette tax (63.5% supported). •Since Ohio’s last tobacco tax adjustment, 57 adjustments have occurred in 37 states or territories. •Since the tax does not increase with inflation like other taxes (e.g., sales taxes), the tax must be raised regularly or it loses value over time. Just the Numbers Medicaid Impact•Ohio Medicaid smoking rate is 43.1% (The non-Medicaid rate is 22.3%). •Through sustained state investments in tobacco prevention, Ohio can save Medicaid dollars: •$16,474,098 -Direct healthcare costs •$27,137,276 -Workplace productivity losses •$43,611,373 -Total Average Potential Annual Savings Tobacco Impact in Ohio •Every pack of cigarettes sold in Ohio costs $9.19 in related healthcare costs to businesses and the state. •Equalizing the tobacco taxes (making the OTP tax 55% of wholesale price) will decrease consumption by 13%, reduce youth users by 25%, and prevent users from simply switching to lower taxed tobacco products. |