Changes in tobacco use create trade-offs

How the restaurant and bar smoking ban will affect restaurant or tobacco revenues is unclear. Other states with similar bans say business falls off, then resumes without a haze.

Prevention Partners say the Jan. 2, 2010 ban, and the state and federal tax hike in 2009 will keep an estimated 89,000 children a year from starting to smoke tobacco.

Added to a state tobacco-free schools and hospitals law already in place, this new smoking ban prompted the state prevention group to up its N.C. grade for prevention from an “F” to a “C.”

Tobacco and money have been joined at the hip in North Carolina for more than three centuries.

Colonial farmers hoed, primed and barned their way into the global economy with tobacco.

Poor farm workers patted the tobacco money in their back pockets on the way to town on Saturdays to pay for life’s basics.

Early 20th century farmers and share croppers got the cash and the hopes for better years from fall tobacco sales in towns made rich by the golden leaf.

Big tobacco money in North Carolina— American Tobacco Company’s James B. Duke in Durham and R.J. Reynolds in Winston Salem — made work for the masses and helped build universities, hospitals, and a banking and transport industry. Joined by Virginia-based tobacco giant Phillip Morris, which bought and manufactured here, North Carolina ranked, and still ranks, first in the U.S. in tobacco production.

As a farm commodity, tobacco accounted for 7 percent of North Carolina’s $9.75 billion agriculture economy in 2008, less than half the 15.5 percent of total crop value in 2005.

Though a fraction now of what it once was, tobacco remains an institution that continues to bring money to the state.

The per pack federal tax on cigarettes increased from 39 cents to $1.01 in 2009 and North Carolina jacked the tax another 10 cents from 35 cents to 45 cents, still leaving the state ranked 44th in combined cigarette tax.

New York City has the highest combined federal, state and local tax rate at $4.25, with Chicago second at $3.66 per pack. New Jersey at $3.58 and Massachusetts at $3.52 are highest for combined federal and state tax.

The justification for tax hikes was increased government revenue for health care, particularly for children.

According to N.C. Prevention Partners, “the effects of tobacco use account for nearly one in five deaths a year in the U.S.,” higher than the combined total of alcohol use, motor vehicle injuries, suicides, murders, illegal drug use, and HIV.

One in four North Carolinians between 22 and 55 smokes and about one in three young people between 18 and 24 do so, the partner’s group maintains.

When the federal tax increase kicked in last spring, cigarette manufacturers said a previous 10 percent increase cut consumption by about 4 percent. They expect the new tax hike to prompt about 1 million of the country’s 45 million adult smokers to quit.

A U.S. Bancorp tobacco industry analyst said a 9 percent annual decrease is anticipated as a result but will not hurt major tobacco companies like Phillip Morris and R.J. Reynolds because they planned ahead and increased prices from 40 cents to 70 cents a pack before the tax.

That spring analysis, however, was called into question last week with Winston Salem-based Reynolds’ announcement that it plans to cut 400 jobs in its cigarette division.

According to a report released Dec. 9 by a coalition of public health organizations, North Carolina ranks 24th in the country in its funding for programs to prevent children from smoking and to help smokers quit.

But the report by the Campaign for Tobacco-Free Kids, American Heart Association, American Cancer Society, Cancer Action Network, American Lung Association and Robert Wood Johnson Foundation maintains the state’s $20 million per year spent on tobacco prevention and cessation programs is only 18.7 percent of the $106.8 million recommended by the U.S. Centers for disease Control and Prevention.

North Carolina will collect a total of $428 million in 2009 from the tobacco settlement and tobacco taxes, the report said, but will spend just 4.7 percent of it on tobacco prevention.

Tobacco companies in North Carolina, now diversified and including some products wholesome enough to get the “WIC” label for Women’s, Infants and Children program subsidies, spend $535.9 million a year in marketing in the state.


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