If you smoke in Indiana, you’ve probably already seen the difference. Since July 1, tobacco prices have risen—significantly. Some packs now run $2 to $3 more, some as high as $14 per pack. That’s a significant jump for something that many people buy on a regular basis.
As a result of this, the majority of Indiana’s smokers are now going to nearby states, like Kentucky, where tobacco is still less costly—just as it was in Indiana before this new levy.
Why did the price go up?
This tax increase is one component of a broader Indiana legislature proposal. The state faced a $2 billion budget deficit, and this measure helps bring in revenue to finance essential costs, including Medicaid and other health-related programs.
And in the meantime, it’s also meant to get people to smoke less. Lawmakers hope that cigarettes and cigars will cost so much that people will finally stop. And for some, it works. Steep prices are giving smokers the push they need to once again try to quit for good.
Not everyone’s happy—but some are
There are many individuals and businesses angry with the new rates. But public health groups like the American Lung Association are pleased. They say it’s a giant win for public health.
They’re relieved that Indiana stepped up, said Mike Seilback, a group spokesperson. The majority of smokers would give up smoking if they could, he said, but nicotine is extremely addictive. By increasing tobacco’s cost, they believe more people will try to quit—and succeed.
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A huge impact on the state budget
State lawmakers have stated that this increase in the tax will yield approximately $800 million from cigarette sales and an additional $50 million from other tobacco products. That will assist in Medicaid, a health care program for low-income people.
Senator Ryan Mishler explained that this funding is vital to keeping the state’s health programs in check. In other words, the increased revenue from cigarettes helps Indiana take care of its most needy citizens.
Smokers are feeling the pinch
Others who smoke say that prices in Indiana now appear as high as they do in California or New York—two states with a high reputation for living standards. The nearly 200% increase in tax puts Indiana among the most expensive states to purchase tobacco, only surpassed by Illinois.
That is why others are now crossing state borders just to make their purchases. Kentucky, for instance, still has significantly lower prices, and stores there are attracting increasing numbers of Indiana shoppers.
What happens next?
We shall have to wait and see. The hope is that increasing numbers of people will give up smoking, and the state will get some fiscal breathing space.
And some members of the legislature remain skeptical about whether it was the best choice. Others are inquiring about how the funds will be spent. But this is definite: for now, tobacco just became an awful lot more expensive in Indiana, and it’s already changing behavior across the state.
