A cigarette tax increase could help Iowa budget problems, organization says

A new proposal suggests increasing the cigarette tax by $1.50, which would nearly double it.

One proposal suggests increasing Iowa's cigarette by $1.50—which would nearly double the current tax—could bring new revenue to the state, which is suffering from slower revenue growth than expected.

Stacy Frelund with the American Heart Association's regional Iowa office told Governor Reynolds and members of her staff at public budget hearing Tuesday that a tax increase on cigarettes could help make up some of the state's budget shortfall and also push more Iowans to quit smoking.

"I know that that’s sometimes daunting, to think about tax increases but we could have approximately 106.14 million that would be brought in from that tax," said Frelund, who is the government relations director.

Iowa hasn't increased this tax in 11 years and Frelund said it could help lower healthcare costs. The state spends approximately $1.28 billion in healthcare costs related to tobacco use, Frelund told the panel, citing number compiled by the American Cancer Society and Tobacconomics, a research firm that looks at tobacco policy.

She also said such a tax could prevent 19,000 young Iowans from becoming smokers in the first place and push 22,000 smokers to quit.

Iowa has the 29th lowest cigarette tax in the country at $1.36. This proposal would nearly double it to $2.86.

Frelund said her organization and 18 others are working to make this proposal a reality next legislative session.

The Legislature convenes for the 2018 session on January 8.

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