Maryland cigarette sales have dropped by 16 percent since last year, the sharpest drop in at least two decades and evidence that last year's tax increase is prompting some smokers to quit.
Health advocates and Gov. Parris N. Glendening, who combined forces to push the 30-cents-a-pack increase through the General Assembly last year, said the sales figures vindicate their claim that higher cigarette taxes are good for public health.
"It looks like we're clearly headed in the right direction," said Glendening, who initially sought a $1-a-pack increase. "Sixteen percent in one year is really dramatic."
Vincent DeMarco, who organized the campaign to increase the state cigarette tax, noted that nearly 60 million fewer packs were sold this fiscal year than last.
"That's a tremendous achievement," he said. "Clearly, we're saving lives."
The sales figures, based on sale of cigarette tax stamps by the state comptroller's office, show that just over 304 million packs of cigarettes were sold in Maryland in the year ending June 30, compared to 363 million the previous fiscal year.
The state tax increase, from 36 to 66 cents a pack on July 1, 1999, came on top of a price increase of up to 60 cents imposed by major cigarette makers to pay for the 1998 tobacco settlement. And in January of this year, the federal tax increased 10 cents to 34 cents a pack.
Nationally, the average price of a pack of cigarettes - including carton sales and discount brands - was $2.78 in June, compared with $1.96 two years earlier, said David J. Adelman, a tobacco industry analyst with Morgan Stanley Dean Witter in New York.
Some of the state's sales decline might result from Maryland smokers' crossing into nearby states with lower taxes to buy their cigarettes more cheaply or from an increase in illegal sales of smuggled cigarettes.
Nearby states all have per-pack taxes lower than Maryland's 66 cents: Virginia, 2 1/2 cents; West Virginia, 17 cents; Delaware, 24 cents; Pennsylvania, 31 cents; and the District of Columbia, 65 cents.
Mike Tyler, vice president of Columbia Vending, which owns five discount cigarette stores in Delaware - including one in Delmar, just over the Maryland line - said more Marylanders have crossed the line to buy cigarettes since the tax hike. A carton of Marlboros that sells for $31.54 in his Baltimore stores goes for $26.09 in Delaware, he said.
"You're driving your business away," he said of the Maryland tax.
But Comptroller William Donald Schaefer, who has cracked down on cigarette smuggling in the past year, said he does not think those factors explain the sales drop.
"People who are close to the border may go across to buy cigarettes," Schaefer said. "But I don't think the numbers are that great. I think the drop in smoking is real."
Health researchers say raising prices is the most certain way to reduce smoking, since it makes the habit unaffordable for some people and gives others the nudge they need to quit. Taxing cigarettes has more consistently cut smoking than anti-smoking advertising campaigns, school health courses or smoking cessation programs, researchers say.
But Maryland will be trying all those measures on an unprecedented scale starting in January, as the governor implements his pledge to spend $30 million a year from the 1998 tobacco settlement on anti-smoking programs. Plans include $10 million annually for "counter-marketing" of cigarettes, a huge increase over the $600,000 a year budgeted for anti-smoking ads in previous years.
The percentage of adults who smoke has been shrinking for decades, and the annual decline in cigarette sales in Maryland has averaged about 2 percent in recent years, according to the comptroller's office. The largest previous sales drop was 11 percent in 1993 - following the last cigarette tax increase, from 16 cents to 36 cents a pack.
Then, the chief motivation to raise the tax was to plug holes in the state budget during a recession. But last year, with the economic boom producing a budget surplus, the cigarette tax hike was promoted mainly as a health measure.
"It took courage for legislative leaders to stand up in face of a surplus and say, `We're not doing this for revenue, we're doing it for public health,'" Glendening said.
Nonetheless, the latest tax increase did pour an additional $69 million into state coffers, boosting cigarette tax revenue from $128 million to $197 million, according to the comptroller's office.
The Maryland sales figures shed no light on trends in youth smoking, which baffled health officials by increasing throughout the 1990s in the face of both the adult smoking decline and increased anti-smoking rhetoric.
