CONTRIBUTORS

Raising tobacco tax makes sense

Posted May 15, 2011, at 7:06 p.m.

Maine businesses are all feeling the effects of the recent economic downturn. Many have found it more difficult to maintain staffing levels, pay the bills, invest in new equipment and grow their companies to their highest potential. While many factors have led to these financial challenges, one of the most significant is the high cost of health insurance.

In 2006, Maine employers paid an average of $8,700 a year for a family insurance policy. While certainly a high price at the time, that same policy in 2012 is expected to exceed $15,000. This trajectory of costs is not sustainable for the average business in Maine.

In last year’s “Making Maine Work” report from the Maine Chamber of Commerce and Maine Development Foundation, business leaders identified health insurance costs as the No. 1 priority for the governor and Legislature to address this year. This is because health insurance costs have proved to be a wound that won’t heal; they are relentless, making it almost impossible for businesses to grow and thrive.

National and international businesses, acknowledging the devastating impact growing health care costs can have on profit margins, are now looking at state health data before setting up new operations. So while Maine workers are known and valued for our work ethic, that won’t always be enough to bring new jobs here. We need to show we’re taking an aggressive approach to preventing the diseases that lead to such crippling health care costs for all of us.

The Fund for a Healthy Maine is revenue from the 1998 tobacco settlement. It was carefully designed to create opportunities for better health and lower costs for everyone. And it is working.

Yet, lawmakers are now considering a budget that would dismantle the fund and the special legacy it provides to the people of Maine. This is exactly the wrong signal to be sending to these new and expanding companies about Maine’s commitment to creating a thriving business environment and healthy work force.

There is a win-win solution that protects the Fund for a Healthy Maine and does even more to help our young people be ready for good jobs right here in Maine when they get out of school. That solution is an increase in the price of tobacco products.

Raising the price of tobacco is proved effective at helping smokers quit and keeping kids from starting to smoke. It saves lives and lowers costs, and that’s a formula for success that every business can appreciate.

Maine’s youth smoking rates are on the rise for the first time since 1997. But a $1.50 increase in the cigarette tax will bring Maine’s youth smoking rates back to Healthy Maine 2010 goals. It will help save more than 6,000 lives and keep 13,000 kids from ever picking up a cigarette. It also will prevent $295 million in health care costs to the state, and save Maine businesses nearly $20 million in lost productivity.

What does this all add up to? Healthier families, strong communities and much more productive employees: all things which Maine needs in order to ensure a vibrant economy that supports business growth.

But a tobacco tax does more than save lives and dollars, it generates revenue. By increasing the cigarette tax, the state will raise nearly $35 million in new revenue. This is enough to preserve the Fund for a Healthy Maine and still invest $15 million every year in new economic development opportunities for Washington, Aroostook, Somerset and other hard-hit counties.

According to a recent poll, 66 percent of Maine voters support a $1.50 increase to the cigarette tax, and more than 90 percent believe that the Fund for a Healthy Maine should be used as it was intended — to prevent disease and promote good health. Businesses support the fund as well: in May 2011, more than 150 businesses signed an open letter to the Maine Legislature, encouraging them to defend the fund and the role it plays in keeping businesses prosperous.

Companies throughout Maine know that dismantlement of the Fund for a Healthy Maine will only lead to greater costs that threaten their bottom line, a reality none of us can afford.

Healthy families are the key to lowering health costs and sustaining a strong economy. The Fund for a Healthy Maine has allowed communities across the state to improve the health of their children and their workers. We urge lawmakers to see the fund for what it is — an essential tool in our state’s economic development strategy — and to look to revenue generators that protect this investment in our future.

Susan Corbett is the CEO of Axiom Technologies in Machias. Edward Miller is the senior vice president for health promotion and public policy at the American Lung Association of New England in Augusta.

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