Tobacco-tax revenue
should not become
a growth industry


Taxes from sales of tobacco products have boosted state revenues significantly in the past fiscal year.

A TINY stamp, a focused law-enforcement effort and a habit many view as offensive have brought the state a windfall of funds to bolster the state's skinny piggy bank. If not for the fact that the money comes from a tax on cigarettes, the increased revenue could be considered a bright spot for Hawaii.

More than $62.6 million in cigarette taxes was collected in fiscal 2002, a $22.5 million increase from the previous year. Officials attribute the significant rise to the small, green stamp that the law requires wholesalers and dealers to affix to tobacco products, showing that taxes have been paid.

The law, which went into effect in January 2001, makes it easier for the state's tobacco-enforcement unit to spot untaxed products. Further, the unit, an arm of the attorney general's office, has been making a concerted effort to rein in illegal cigarette sales, logging 112 felony arrests, confiscating more than 2 million cigarettes and collecting about $80,500 in fines.

The tax will go up from $1 on a pack of 20 cigarettes to $1.20 in October. Next July, the tax will grow to $1.30 and to $1.40 in 2004. At that point, Hawaii's tax will be among the highest in the nation with only five states having higher tariffs.

The revenue generated goes into the state's general fund. Hawaii does not earmark the money for tobacco control or related health programs. Only New Jersey and Utah dedicate funds from higher tobacco taxes for those. Since Hawaii has raided money from its share of a federal lawsuit against tobacco companies, which was supposed to be used for health programs, state officials should consider returning some of the tax revenues for those purposes. Douglas Yee, president of the American Lung Association of Hawaii, says higher taxes work to discourage people, especially the young, from the nicotine habit. However, tobacco and health education are still necessary.

The state is always seeking new ways to generate revenues and the cigarette tax has brought in a strong infusion of cash. However, the windfall isn't all good news when you consider the funds are derived from a deadly human habit. A decrease in tobacco sales would mean smaller tax assessments, but better health and quality of life for Hawaii's citizens. Loss of revenues from cigarette taxes would be a better result.


Published by Oahu Publications Inc., a subsidiary of Black Press.

Don Kendall, Publisher

Frank Bridgewater, Editor 529-4791;
Michael Rovner,
Assistant Editor 529-4768;
Lucy Young-Oda, Assistant Editor 529-4762;

Mary Poole, Editorial Page Editor, 529-4790;
John Flanagan, Contributing Editor 294-3533;

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