State Cigarette Excise Tax

Establishing a basis to grade state cigarette excise taxes begged a question: “What is the appropriate level to tax tobacco to protect public health?” Our review of literature did not determine a magic level for an excise tax. We know that as the price of cigarettes increases, consumption decreases. For each 10 percent price increase, consumption drops by about 7 percent for youth and 4 percent for adults.² So the answer for the cigarette excise tax is simple: The higher the better. The CDC reported that each pack of cigarettes sold in this country costs the economy $10.47 in direct medical costs and lost productivity.³

The average cigarette tax is often seen as an indication of where states are in their cigarette taxing policies. The cigarette tax grades are based on the average (mean) of all state taxes as the midpoint, or the lowest C. The average state excise tax is $1.11 per pack. The range of state excise taxes ($0.07 to $2.575) is divided into quintiles.

The excise tax grades break down as follows:
A = $2.21 and over
B = $1.66 to $2.209
C = $1.11 to $1.659
d = $0.555 to $1.109
F = under $0.555

This methodology reflects the dynamic nature of cigarette excise taxes and the need to continue increasing taxes to keep up with inflation and decrease consumption. For instance, in 2002 Massachusetts had the highest cigarette tax at $1.51 per pack. As cigarette taxes rise in the future, the mean will change and the grades will be adjusted to reflect the new mean.

Youth Access Laws

The youth access grading system is based on the criteria developed by an advisory committee convened by the National Cancer Institute. The criteria were presented in the article, “State Laws on Youth Access to Tobacco in the United States: Measuring Their Extensiveness with a New Rating System,” Marianne H. Alciati, Marcy Frosh, Sylvan B. Green, Ross C. Brownson, Peter H. Fisher, Robin Hobart, Adele Roman, Russell C. Sciandra and Dana M. Shelton, Tobacco Control, 7:345-352 (Winter 1998).

This approach provides scoring in nine categories: Minimum Age, Packaging, Clerk Intervention, Photographic ID Required, Vending Machines, Free Distribution/Samples, Graduated Penalties, Random Inspections and Statewide Enforcement. All laws are open to interpretation and our analysis may differ from those of the authors noted in the above study. In addition, there have been significant changes in state laws since the publication of the Tobacco Control paper.

In 2007, a review of the youth access laws and regulations contained in the American Lung Association’s compendium of state tobacco control laws, State Legislated Actions on Tobacco Issues was undertaken, and some youth access scores and grades in the State of Tobacco Control 2007 were adjusted based on this review. Therefore, youth access scores and grades from the State of Tobacco Control 2006 are not comparable to the 2007 report.

The youth access grades are based on the highest state score of 26. Individual state scores were divided by 26 to arrive at the grades. Grades were given following the standard grade school system. States receiving scores in the top 10 percent of the standard (90-100 percent) got an A. Those receiving scores that fell between 80-89 percent got a grade of B, between 70-79 percent a C and between 60-69 percent a D. Those that fell below 60 percent received an F. The grades break down as follows:

A = 26 to 24
B = 21 to 23
C = 19 and 20
D = 16 to 18
F = 15 and below

The exception to the grading system:

Preemption: State preemption of stricter local ordinances is penalized by a reduction of one letter grade. States with preemption that rate a perfect score of 36 points would not be penalized for preemption.

Key to Youth Access Laws Ratings by Category
For each category, a state without a specific provision receives a score of zero (0).

1. Minimum Age (4 points): Target is “prohibits the sale or distribution of any tobacco products to persons under 18 years of age through any sales distribution outlet and a warning sign is required at point of purchase with a specific penalty for failing to post a sign.” Score is lowered if laws meet the target age but do not require sign-posting, there is no specific penalty for not posting a sign, or both. A bonus point (+1) was available if the laws met the target criteria and exceeded the minimum age requirement of 18 years.
2. Packaging (4 points): Target is “prohibits all cigarette sales other than in a sealed package conforming to federal labeling requirements.” Score was lowered if minimal exceptions were provided.
3. Clerk Intervention (4 points): Target is “prohibits access to or purchase of tobacco products without the intervention of a sales clerk.” This does not apply to sales of tobacco products from vending machines. Score was lowered if the laws specified an exception.
4. Photographic ID Required (4 points): Target is “requires merchants to request photographic identification for people who appear to be under 21 years of age.” Score was lowered if laws required identification but did not meet target age, no age was specified or photo identification was not specified. A bonus point (+1) was available if the laws met the target criteria but required a minimum age of appearance greater than 21 years.
5. Vending Machines (4 points): Target is “total ban on sale of all tobacco products through vending machines in all locations.” Score was lowered if laws depended on location and/or level of supervision required for vending machine sales.
6. Free Distribution/Samples (4 points): Target is “total ban on distribution of free tobacco samples, coupons for free samples or rebates.” Score was lowered if ban only applied to certain locations or certain types of samples. A bonus point (+1) was available if the laws met the target criteria and included a specific ban on sampling through the mail.
7. Graduated Penalties (4 points): Target is “establishes system of graduated penalties or fines applicable to all youth access laws, to be levied within three years, plus possibility of suspension or revocation of a required tobacco retail license for repeated sales to minors.” Score was lowered if penalties did not include possibility of suspension penalties were not graduated and only applied to certain offenses or penalties could be delayed. An affirmative defense clause or intent requirement received a score of zero (0).
8. Random Inspections (4 points): Target is “establishes random, unannounced inspections of retailers as part of the enforcement mechanism, using underage buyers for the purpose of identifying violators and does not prohibit other use of minors to test compliance.” Score was lowered if laws required inspections but with limitations. Any laws that included a provision that specifically prohibited the participation of minors in enforcement efforts received a score of zero (0).
9. Statewide Enforcement (4 points): Target is “establishes a clearly designated statewide enforcement authority for sales.” Score was lowered if laws designated some enforcement authority other than statewide.

LIMITATION OF GRADING SYSTEM

State Tobacco Control Expenditures

We do not evaluate each state’s expenditure in each of the CDC categories nor do we evaluate the efficacy of any element of any state’s program. Therefore, a state may receive a high grade but be significantly underfunding a component or components of a comprehensive program. It also may be true that a state with a low grade is adequately funding a specific component or program in one community. The CDC recommends a comprehensive program and simply funding an element of the program will not achieve the needed results. The CDC explicitly calls for programs that are comprehensive, sustainable and accountable. That said, we believe the total funding is a fair basis for grading state programs and a state’s tobacco control funding performance.

1. Data on local ordinances is obtained from the Americans for Nonsmokers’ Rights Foundation, www.no-smoke.org.
2. There is general consensus among tobacco researchers that every 10 percent increase in the price of cigarettes decreases cigarette consumption by about 4 percent in adults and about 7 percent in children. Tauras J, et al. “Effects of Price and Access Laws on Teenage Smoking Initiation: A National Longitudinal Analysis,” Bridging the Gap Research, ImpacTeen, April 24, 2001.
3. Centers for Disease Control and Prevention. Sustaining State Programs for Tobacco Control: Data Highlights 2006. Available at: http://www.cdc.gov/tobacco/data_statistics/state_data/data_highlights/2006/2006.htm