With Tobacco Tax Hikes, a Wave of Montanans Try to Kick Habit

By Daniel Testa, 5-01-09

On April 1, the price of a pack of cigarettes rose 62 cents across the country when a new federal tax kicked in – causing the average price of a pack to hit around $6 in Montana. The result of President Barack Obama’s reauthorization of the Children’s Health Insurance Program, which helps pay the healthcare costs of kids in families whose incomes are too high to receive Medicaid, the new tax is expected to raise tens of billions of dollars in CHIP funding. The decreasing number of smokers due to the higher cost of cigarettes is also aimed at decreasing national healthcare costs.

But while the long-term effects of the cigarette price hike may prove beneficial, the dramatic increase in smokers trying to quit, because they can no longer afford the habit, has put enormous strain on Montana’s tobacco prevention program. And with a statewide smoking ban set to hit bars and casinos in October, the number of smokers trying to quit in Montana seems as if it will only grow.

The new excise taxes on tobacco, coupled with the recession and a move by tobacco companies to increase their prices earlier this year in anticipation of revenue falling off when the tax took effect has created a kind of perfect storm for Montana smokers – and those who counsel smokers trying to quit.

Call volume to the Montana Tobacco Quit Line in March of this year was up 65 percent over the same month in 2008, from about 800 to more than 1,300 calls. In the first two weeks of April, the Quit Line received 559 calls. In Flathead County, call volume increased from 58 calls in March 2008 to 107 in March of this year.

While the Montana Tobacco Quit Line boasts of answering 97 percent of the calls it receives with a live person, the recent surge in callers meant many have been put on hold or asked to leave a message.

“It was swamped, completely swamped,” Stacy Campbell, coordinator of the state’s tobacco use prevention program, said. “There’s just no way to staff for that – I don’t think anybody knew that was going to be the case.”

Although Montanans experienced delays, other states have it worse. Michigan’s quit line shut down in March after it received 65,000 calls in five days, and ran out of nicotine replacement products. It is scheduled to reopen in October. In Colorado, where lawmakers are trying to cover a budget shortfall, deep cuts to the tobacco prevention program are in the works.

When a Montanan calls the state Quit Line they are actually routed to National Jewish Hospital in Denver, which handles the Quit Lines for several Western states. Following the surge, the hospital hired 12 new counselors to help answer calls, Campbell said.

But beefing up staffing at the call center to accommodate increased volume could force Campbell to cut back in other areas as Montana’s Tobacco Prevention program serves more people with a stagnant budget. Beyond the free counseling and coaching provided by the Quit Line, the program also does community outreach at schools and offers nicotine replacement products, including a relatively new cessation medication called Chantix. The medication is expensive, but the state offers a discount that gets someone trying to quit a month’s supply for a $25 co-pay.

While she emphasized it’s too early to tell, if the number of Montanans trying to quit continues to increase at the current rate, Campbell may have to consider raising the Chantix co-pay, or shortening the period of time the program offers nicotine replacement products. The Tobacco Prevention Program’s budget is comprised of an annual grant from the Center for Disease Control, the state Legislature and payout from the Tobacco Master Settlement Agreement, when states sued tobacco companies in the 1990s.

Her decision could depend on how high the increase of people trying to quit grows in the fall and the implementation of a statewide smoking ban at bars and casinos draws near.

“When Montana is 100 percent smoke-free, a lot of those people who do smoke will decide that it is time to quit,” Campbell said. “We’ll probably see another bump then.”

But Campbell and other tobacco prevention workers in the state are not complaining about their increased workload, and are encouraged by the number of people trying to quit. The Campaign for Tobacco-Free Kids estimates the 62-cent increase will prevent some 2 million teens from becoming smokers, and encourage 1 million adults to quit. According to the Campaign, for every 10 percent increase in the cost of cigarettes, 7 percent fewer young people smoke, and tobacco use by adults drops by 4 percent.

Not everyone is singing the praises of the new tax, however. Greg Betthauser owns the Cigarette Depot in Kalispell and his customers are none too pleased with the recent price jump in tobacco. The tax on one pack of cigarettes in Montana is now $2.71, of which $1.01 is federal taxes and $1.70 is state taxes. The cost of a carton of cigarettes ranges from about $43 to $70. And the tax on loose tobacco for hand-rolled cigarettes leaped from $1.09 per pound to $24.68 per pound.

“Every time we have a price increase from taxes, you see a shift in what consumers are willing to buy,” Betthauser said. “If they can still afford what they enjoy, than they continue with that, but if it’s a matter of making ends meet, they look for whatever’s affordable.”

Betthauser believes the price of cigarettes has increased to a point where bootlegging and smuggling of cigarettes from other countries is going to become widespread, and cartels could develop around tobacco like what exists currently around illegal drugs. He also criticizes the taxation on tobacco as morally unfair in that other consumer products with proven harmful effects aren’t taxed nearly as heavily.

As for how customers are coping, Betthauser said one just told him he mail-ordered tobacco seeds over the Internet. He’s going to grow his own tobacco to smoke.