HomeMy WebLinkAboutAgenda - 03-05-2003 - 5cs
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: March 5, 2003
Action Agenda
Item No. 5- C,
SUBJECT: Resolution In Support of An Increase In North Carolina's Tax On Cigarettes
DEPARTMENT: Health PUBLIC HEARING: (Y /N) No
ATTACHMENT(S): INFORMATION CONTACT:
Resolution Rosemary Summers, ext 2411
TELEPHONE NUMBERS:
Hillsborough
732 -8181
Chapel Hill
968 -4501
Durham
688 -7331
Mebane
336- 227 -2031
PURPOSE: To consider adopting a resolution to forward to Orange County's legislative
delegation and the North Carolina General Assembly in support of increasing the tax on
cigarettes.
BACKGROUND: The Orange County Board of Health adopted a resolution at its last Board
meeting that called for supporting a $.75 per pack increase in the tax levied on cigarettes. This
same resolution has been adopted by the North Carolina Alliance for Health and by the North
Carolina Association of Local Health Directors. The current tax on cigarettes in North Carolina
is 5 cents per pack - 49th among all states. The resolution being proposed also includes a
provision that these funds be used for health services or for reducing or preventing tobacco use.
The benefits from increasing cigarette taxes by 75 cents per pack include the following:
Decrease youth smoking by 16.1 %
• 14,050 fewer smoking- affected births in North Carolina
• 73,700 current adult smokers would quit in the State
• $16 million saved over 5 years from fewer smoking- affected pregnancies and births
• $25.3 million saved over 5 years from fewer smoking- caused heart attacks and strokes
• Generate $540.7 million in state cigarette tax revenues each year
• Generate $12.1 million in additional sales tax revenues each year (based on total price of
pack)
In a survey of states that have enacted significant tax increases from 1995 to 2000, research
has shown that states have gained significant revenues (the lowest being South Dakota at $6.1
million and the highest being California at $555.4 million) and have contributed substantially to
the decline of smoking (South Dakota 5.6% decline and California 18.9% decline).
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Cigarette companies argue that cigarette tax increases are regressive taxes that fall
disproportionately hard on lower- income persons. Research has shown that smokers with
family incomes at or below the national median are four times as likely to quit because cigarette
price increases as those with higher incomes. Those that quit because of the tax increase will
actually end up saving all the money they used to spend on cigarettes. The resultant health
benefits will also end up saving money in health care costs for families.
According to the Campaign for Tobacco -Free Kids, smoking in North Carolina is responsible for
only a tiny fraction of the overall demand for the burley and flue -cured cigarette tobacco grown
in North Carolina or elsewhere in the US. Even if all cigarette sales in the State were totally
eliminated, that would reduce the total annual sales of American -grown burley and flue -cured
leaf by less than two percent. It is estimated that an increase of 50 cents per pack would
reduce the overall demand by only a bit more than one -tenth of one percent.
FINANCIAL IMPACT: None for the County directly. The tax increase on cigarettes would
enable more revenue to be used at the State level for various programs that the State
designates as high priority. More revenue may result in fewer state budget cuts to local entities.
This resolution asks for the revenue to be used for health programs or for programs that
reduce or prevent tobacco use.
RECOMMENDATION(S): The Manager recommends that the Board consider adopting the
resolution and forwarding it to Orange County's legislative delegation and the North Carolina
General Assembly.
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ORANGE COUNTY BOARD OF COUNTY COMMISSIONERS
RESOLUTION IN SUPPORT OF AN INCREASE IN NORTH
CAROLINA'S TAX ON CIGARETTES
March 2003
WHEREAS, the Orange County Board of Commissioners joins the Orange County Board of
Health in carrying out the responsibility of protecting and promoting the health of the people of
Orange County; and
WHEREAS, a goal of Healthy People 2010 is to "reduce illness, disability, and death related to
tobacco use and exposure to secondhand smoke "; and
WHEREAS, death rates from heart disease and cancer, the leading causes of death in North
Carolina and Orange County are partially attributable to smoking and tobacco use; and
WHEREAS, North Carolina's cigarette tax is currently $.05, the 3rd lowest in the nation; and
WHEREAS, the use of tobacco products costs the State $4.75 billion in medical costs and lost
productivity annually; and
WHEREAS, each year 24,090 children in North Carolina start smoking each year (66 a day); and
WHEREAS, the best way to prevent and reduce tobacco use by children is to substantially
increase the cost of cigarettes; and
WHEREAS, such a tax increase would result in a 16.1 % decrease in youth smoking rates,
preventing 105,750 North Carolina children from starting to smoke and saving 33,750 premature
smoking- related death; and
WHEREAS, North Carolina expects to suffer approximately a $2 billion deficit in fiscal year
2003, the third year of significant deficits; and
WHEREAS, these deficits have caused cuts to important programs affecting the health and
wellness of the citizens and more reductions are threatened; and
WHEREAS, North Carolina targets almost no state funds towards preventing tobacco use; and
WHEREAS, such a tax increase would generate $573 million in new revenue;
NOW, THEREFORE, BE IT RESOLVED that the Orange County Board of County
Commissioners supports an increase in the cigarette tax in North Carolina of at least $.75 per
pack to be used for health programs and for reducing and preventing tobacco use.
This the 5th day of March, 2003.
Margaret Brown, Chair
Orange County Board of Commissioners