Stakeholder Update: Statehouse Smoke Signals

The 2018 election is in the books, and it was a good day for business advocates: As we reported last week, all Indy Chamber-endorsed legislative candidates earned victories, including challenger J.D. Ford in Senate District 29; Indianapolis Public Schools referenda won overwhelming support for safer schools and higher salaries for educators, and we maintained a pro-reform majority on the IPS board.

It’s also notable that voter turnout was up sharply across the region and statewide from the 2014 midterm elections, including strong interest in early voting.  That’s good news for a healthy democracy.

Sadly, good news about public health is harder to find.  As the smoke clears on last week’s results, it’s time to turn our attention to priorities at the Statehouse – and Indiana’s high rate of tobacco use has become a burning business issue.

Raise it for health:

Yesterday, we joined a press conference in support of the Raise It for Health campaign, a broad coalition of business, health and community leaders, seeking a $2-per-pack increase in the state cigarette tax.

Indiana is among the states with the highest smoking rates, costing billions in added healthcare and lost productivity every year.  Every time an employee misses work because of smoking-related illness – or is pushed from the labor force by more chronic ailments – it erodes our human capital.  And higher insurance rates for smokers in the workplace amount to a hidden ‘tobacco tax’ on business.

We can’t sustain a healthy economy without a healthy workforce, but our taxing and spending priorities don’t address this fundamental truth.  Indiana ranks 49th in public health spending, even as we battle an epidemic of opioid addiction and rates of chronic respiratory and cardiovascular disease higher than the nation.  And while one of every four Hoosiers smoke, our cigarette tax is the lowest in the region.

A simple cost-benefit comparison makes an overwhelming case for increasing the cigarette tax in 2019.  Among the human and economic consequences of smoking:

  • More than 11,000 Hoosiers die every year from tobacco-related causes;
  • For every Hoosier fatality from smoking, 30 suffer from smoking-related illnesses that limit their workforce participation;
  • Each smoker costs a business $6,200 extra per year (including the equivalent of three weeks’ paid vacation in smoke breaks!);
  • Monetizing these breaks, absences and other issues, Hoosier businesses lose over $3 billion a year in productivity from smokers in the workforce;
  • Businesses also pay billions more in added health premiums associated with tobacco use, while all taxpayers share the estimated $600 million in annual health costs from smokers who qualify for public health programs (i.e. Medicaid).

To confront tobacco’s mounting toll, raising the state’s cigarette tax by $2 per-pack would begin to ease the impact on employers as it improves – and extends – the lives of Hoosiers.  It’s estimated that:

  • 70,000 adults would quit smoking, immediately leading to a healthier workforce;
  • 60,000 kids, our future workforce, would never start smoking;
  • Curbing smoking would make an impact beyond those who quit, lessening the effects of second-hand smoke and even extending to opioids and other drugs – studies show that smoking is a common gateway to other addictions and disorders (90% of those abusing opioids are also smokers, for example);
  • Indiana would raise $360 million in the first year for urgent health issues, including opioid addiction;
  • And while it’s been noted that revenues from cigarette taxes would gradually dwindle with the positive effect of smokers quitting the habit, even a cursory glance at the bigger picture shows that gains in productivity and reductions in preventable healthcare would generate more tax revenues while cutting Medicaid costs.

A future with lower tobacco use, higher productivity and a healthier workforce equals a stronger economic outlook.  Cutting the costs associated with smoking creates opportunities for businesses to reinvest in Indiana, create new jobs and grow the tax base for future biennial budgets.  We look forward to making this case to the General Assembly as a top priority of our Legislative Agenda in 2019; check out for more details and ways to get involved.d

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