Tobacco & Revenue: Town Hall Recs Relevant

Given the Academy’s long track record of supporting health initiatives through our Town Hall processes, and most recently (2014 Town Hall) recommending support of “a state tax increase on all tobacco products . . ,“ the Oklahoma Tobacco Research Center invited the Oklahoma Academy to a meeting where a new study was to be released.  Entitled “A Significant Tax Increase in Oklahoma Would produce a Large Sustained Increase in State Tobacco Tax Revenues,” the report, unveiled by Dr. Frank Chaloupka, an economist from the University of Illinois-Chicago, detailed the positive revenue impacts and health outcomes the state would likely see.  He has been performing such research nationally and internationally for over 30 years.

Julie asked if Richard Wansley and Craig Knutson could attend on behalf of the Academy, since both have health or health research/policy backgrounds.  The specific results of the report can be found at the following link .

What interested both Richard and Craig, as it relates to the Academy, was the timeliness of the report’s findings to recommendations emanating from the last two Town Halls.  The report projected that “a $1.50 per pack cigarette tax increase in Oklahoma will . . . save the state $1.22 Billion in future health care costs, and generate more than $183 Million in new revenue in the first year.”  The report also stated that “when Oklahoma last increased its cigarette tax rate in January 2005, revenues increased sharply and have stayed at a relatively high level since then.”  That is on cigarettes only; should the tax increase apply to all tobacco products, the revenue and health costs savings numbers would be even higher.

So, attendees at the 2014 TH (Health) had great foresight to recommend “a state tax increase on all tobacco products, with a portion of the revenue directed to tobacco cessation products.”  Given the report’s expectation of a sustained high revenue stream for years following the initial increase, it appears that attendees at the 2015 TH (budget) also had great foresight by stating that “each year, Oklahoma faces both a budget problem and a budget process problem.  On the first, the TH found that the state of Oklahoma is “not taking in and spending tax dollars sufficiently to meet core state needs.”  Increasing “tobacco taxes by $1.00 to $1.50 (which would have the dual benefit of improving health and reducing health care costs)” was one of several TH suggestions to generate new revenue for the state.

The “aha moment” for us was that, despite the skepticism on the part of some that town halls don’t generate much that is meaningful or substantive, this example, pulled from a one hour meeting at the Oklahoma Hospital Association on March 1, helps quell such skepticism.  While two and ½ days of discussion and deliberation don’t always yield recommendations implementable the very next legislative session, it is reassuring to know the “gestation period” of Academy recommendations aren’t always long-term, but always topical. 

Jennifer Engleman | Mar 28, 2017