California's tax revenue hit by lower cigarette sales

Cigarette sales in California plunged to their lowest level in a decade last year as smokers were squeezed by new taxes and restrictions on where they could light up.

While tobacco use has been steadily declining, the 8.1 percent sales drop was the largest year-over-year decline since 2000, according to the state Board of Equalization.

The number of cigarette packs sold in the state fell to 972 million — down from from 2.8 billion in 1980.

State officials said higher taxes drove more people to kick the habit. Last year, the federal government increased the per-pack tax on cigarettes by 62 cents, bringing the levy to $1.01 a pack.

In California, a pack of smokes now costs an average of $5.09.

"As smokers go to the checkout counter and pay that higher price, they've reduced their smoking," said Anita Gore, a spokeswoman for the state Board of Equalization.

Certainly, the drop is good news for public health. Smoking is tied to a number of deadly ailments, including heart disease, cancer and emphysema.

According to state studies, the lifetime health cost for a smoker is $16,000 more than a nonsmoker.

But for the state, the decline in smoking also means $74 million in tax revenues have disappeared like a puff of smoke, leaving health programs that rely on cigarette taxes to look for other ways to pay for services.

In all, the state collected $839 million in cigarette tax revenues during the just-completed fiscal year, compared with $913 million the year before.

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