The Centers for Disease Control (CDC) reports that cigarette smoking in America has decreased over the last decades. While the news is encouraging, a recent report commissioned by Indianapolis-based Richard M. Fairbanks Foundation cautions Indiana business owners that they are still paying big bucks – to the tune of billions of dollars -- from the habit every year.
The foundation, which works to strengthen education, health and vitality in and around the state’s capital city, collaborated with experts from the University of Illinois Chicago to produce the report, which examines four categories, including the hidden tax of smoking, how an increase in tax could help, the economic impact of tobacco, and the vaping epidemic. The report furthers the foundation’s efforts in lobbying for a tax increase on cigarettes and e-cigarettes to help improve health, lower insurance costs, boost the local economy and save businesses money.
The report notes that Indiana has the eighth-highest smoking rate and the seventh-highest vaping rate in the country. Researchers found that 11,000 Indiana residents die each year due to smoking and that businesses incur about $3.1 billion in what the foundation labels “hidden taxes” due to things like absenteeism and lost productivity from smoke breaks and other factors.
“While the $3.1 billion in total costs to employers is alarming, what’s even more disturbing is the actual number is likely far higher than estimated, as this study does not account for items such as higher health insurance premiums for employers who purchase private insurance, higher workers’ compensation costs for smokers, higher life insurance premiums for smoking employees, and the cost of secondhand smoke on non-smokers in workplaces where smoking is permitted,” the report notes.
Taylor Hughes, chief strategy office for the Indy Chamber, said the organization has been in support of action to raise the tobacco tax, an occurrence he said hasn’t happened for 20 years.
“The rest of society should not have to pay a portion of those costs for tobacco use,” he said. “Everyone is feeling the pinch with insurance costs. They shouldn’t have to fund the tobacco industry. This isn’t about individual choice. People should and are able to make their own choices when it comes to behaviors like smoking. However, we want them to be responsible for that choice they are making rather than something all the rest of us are paying for.”
The Indy Chamber partnered with the Indiana Chamber to launch the True Cost of Tobacco campaign in October 2024. The hope of the campaign is to ensure that Hoosiers and business leaders are aware of the findings from the Fairbanks Foundation and other research.
“We are focused on grassroots. We have partnerships to produce the ad content in various media outlets. The campaign relies heavily on the research that details the impact of smoking and vaping in the state,” he said. “It is important to raise a level of awareness and make sure that both residents and business leaders have the data that we are seeing.”
Hughes said while the campaign supports public health, the larger focus is on business and economic developments and how tobacco impacts those areas. In terms of economic impact for residents, he said while many may know the health risks of smoking, fewer realize the financial impacts.
“Anyone in the state can tell you at any given time exactly what price they are paying at the pump for gas or how much their grocery bills are. But not many can tell you about the impact they are facing because of the cost of tobacco,” he said. “It is important to us that we make sure the public understands those realities.”
He said the campaign’s approach for business leaders focuses on things like the tobacco-related costs to Indiana’s Medicaid program, which is about $756 million annually. It is a massive impact to the budget.
“Government services, public safety, roads, economic development investments, they are all affected. They are all hampered by the cost of smoking,” he said. “When we explain to business owners how resources get tied up in Medicaid costs, they are able to see how it affects them, and they are concerned about that.”
