MARSHALL - For smokers, the cigarette and tobacco tax hike that kicks in Monday in Minnesota is about as welcome as finding a cigarette butt at the bottom of one's drink. But people like Mike Sheldon see the tax as a motivating force that carries enough to muscle to help people finally kick the habit and save money in the long run.
"We're basically looking at this with a view of public health," said Sheldon, the senior communications manager for ClearWay Minnesota. "We know that increasing the price of tobacco is really one of the most effective ways of helping to prevent youth from ever starting smoking and getting current smokers to quit."
ClearWay is a non-profit established in 1998 that was entrusted with overseeing 3 percent of the state's tobacco settlement funds. ClearWay said the adult smoking rate in Minnesota fell to 16.1 percent in 2011 - the lowest rate in the history of the state.
Minnesota's new law will eliminate the health impact fee and bump the state's per-pack excise tax on smokes by $1.60 to $2.83 and raise the average price of a pack of cigarettes from about $6 per pack to more than $7.50.
Tobacco products known as "little cigars" will be taxed and regulated as cigarettes.
If that doesn't get your attention, this might: Minnesota's national rank for cigarette taxation will jump from 28th to sixth.
Minnesota smokers now pay a $1.23 tax per pack, which is lower than the national average. New York has the highest tax on cigarettes at $4.35 per pack. South Dakota's tax is $1.53.
The tobacco tax increase is part of the $2.1 billion tax bill that passed during the 2013 session.
Retailers that sell cigarettes and distributors are required to pay a one-time floor stock tax of $1.73 per 20-pound pack and $2.16 per 25-pound pack that will go toward paying off the state's share of the new Vikings stadium.
Sheldon said the one problem with the tax increase is where the funding will be funneled to. The Legislature, after realizing the revenue from electronic gambling that was earmarked for the Vikings' new stadium was coming in far lower than projected, decided to funnel the extra tobacco tax revenue - roughly $25 million - toward the stadium.
"Taxes, regardless of what they are, are always controversial," Sheldon said. "Where the tax goes sometimes strikes people as off-putting, but it's up to the Legislature to determine where that revenue goes. Obviously, we would love to see it go toward tobacco prevention programs or health. But our concern is that by increasing the tax it will help prevent youth from starting the habit."
According to ClearWay, research shows that raising the price of tobacco is a proven method to reduce adult and youth smoking. The Campaign for Tobacco-Free Kids and the American Cancer Society Cancer Action Network said raising the per-pack price will prevent more than 47,700 kids from becoming addicted adult smokers and help more than 36,600 smokers quit.
But those are speculative statistics, and Sheldon admits there are no guarantees when it comes to getting people to quit. Whether or not the new tax rate will make a difference remains to be seen.
"We know it's tough to quit, but the fact is we all pay more for smoking in Minnesota, whether through health care premiums or excessive health care costs," Sheldon said. "We know there are people who don't want to quit, but there's so much influence from the tobacco industry; they're spending $150 million or more every year in Minnesota alone to market their products and trying to hook people, so it's not necessarily a fair fight. One of the ways to fight it is with a price increase."
Sheldon said smokers who want to quit should know there are free programs available to help, and programs like ClearWay can offer them access to free nicotine patches, lozenges and gum.
"We understand tobacco is not an easy addiction to quit," Sheldon said. "We want to help. We're not anti-smoker, we're anti-industry."