New Report: States Should Increase Tobacco Taxes to Reduce Tobacco Use and Raise Revenue to Fund Critical Public Health Programs

New Report: States Should Increase Tobacco Taxes to Reduce Tobacco Use and Raise Revenue to Fund Critical Public Health Programs

January 22, 2026

WASHINGTON, D.C. - States should significantly increase tobacco taxes to reduce tobacco use and raise billions in new revenue that can help fund critical tobacco prevention and other health programs, according to a new report released today by leading public health organizations.

The report is being released as state legislatures are convening for their 2026 sessions and need to address revenue shortfalls, including those caused by deep cuts to federal health programs made in the past year. These include efforts to eliminate the CDC's Office on Smoking and Health, which provides financial and technical assistance to every state, and large Medicaid spending cuts that shift costs to states.

The scientific evidence is clear that tobacco tax increases are one of the most effective strategies to reduce smoking and other tobacco use, especially among youth. Tobacco tax increases have also been a reliable source of revenue for governments while reducing health care costs, including state Medicaid costs.

The report details the extensive health and economic benefits to each state from increasing its cigarette tax by $1.50 per pack. If every state and the District of Columbia did so, they would collectively:

• Prevent 231,600 kids from smoking;
• Prompt 860,300 adults to quit smoking within the first year;
• Prevent 275,400 premature, smoking-caused deaths;
• Save $14.3 billion in long-term health care costs, including $363 million in Medicaid costs in the first five years; and
• Raise over $6 billion in new revenue in the first year alone.

The report also calls on states to increase funding for tobacco prevention and cessation programs. These programs prevent kids from using tobacco, help people quit using tobacco, save lives and reduce tobacco-caused health care costs. However, the report finds that most states continue to fall short in funding these lifesaving programs:

• This year (fiscal year 2026), the states will spend $728.6 million on tobacco prevention and cessation programs, which is less than a quarter (22%) of the $3.3 billion recommended by the CDC for all states combined.
• Only one state, Maine, currently funds its tobacco prevention and cessation program at CDC-recommended levels.
• Only eight other states provide at least 50% of CDC-recommended funding levels.
• 17 states are spending less than 10% of CDC-recommended funding levels.
• Nationwide, tobacco companies are outspending tobacco prevention funding in the states by nearly 12 to 1. Tobacco companies spend more than $8.6 billion annually - nearly a million dollars per hour - to market cigarettes and smokeless tobacco products in the U.S.

"The United States has made enormous progress in reducing tobacco use, but these gains are at risk unless states step up their efforts and Congress restores funding for the CDC's tobacco control program that is the foundation of our nation's efforts to combat tobacco use," said Yolonda C. Richardson, President and CEO of the Campaign for Tobacco-Free Kids. "Tobacco tax increases present a win-win solution to the states - a health win that will reduce tobacco use and save lives and a revenue win that can help fund tobacco control and other lifesaving public health programs."

Tobacco use remains the leading cause of preventable disease and death in the U.S., killing nearly 500,000 Americans every year and costing over $241 billion in annual health care expenses, more than 60% of which is paid by taxpayers through government programs like Medicare and Medicaid. While smoking rates have been greatly reduced, nearly 10 percent of U.S. adults - more than 26 million people - still smoke. In addition, an estimated 2.25 million U.S. youth currently use a tobacco product, including over 1.6 million who use e-cigarettes.

"Tobacco use is the number one cause of cancer-related death, making reducing tobacco use a critical component in reaching the American Cancer Society Cancer Action Network's (ACS CAN's) goal to end cancer as we know it, for everyone," said Lisa Lacasse, President of ACS CAN. "Cancer prevention and cessation programs are proven to protect kids from tobacco and help individuals who use tobacco quit. Yet, as this report shows, these programs are woefully underfunded. ACS CAN urges lawmakers to work toward reducing suffering and death from cancer by prioritizing increased funding for these lifesaving programs."

"Tobacco and nicotine use continue to drive cardiovascular disease and threaten the health of our nation, especially our kids. And make no mistake - the tobacco industry continues to relentlessly market products that put a new generation at risk of addiction. Leadership at every level of government is essential to counter these efforts," said Mark Schoeberl, Executive Vice President of Advocacy, American Heart Association. "By increasing tobacco taxes and fully funding proven prevention and cessation programs, states can curb the use of dangerous products, protect kids and advance health and hope for everyone, everywhere. Sustained investments in these evidence-based policies will move us closer to ensuring every person has the opportunity to live a longer, healthier life."

"We're at a critical turning point where cuts to tobacco control funding threaten hard-won progress. While overall youth tobacco and nicotine use is declining, many of those who do use are showing troubling signs of dependence as illegal flavored, high-nicotine products surge," said Kathy Crosby, CEO and President of Truth Initiative. "We must use every tool available to protect young people from a lifetime of nicotine addiction and help people quit - pairing strong policies and funding to reduce access and appeal with proven, effective cessation resources like EX Program ."

The report was released by the Campaign for Tobacco-Free Kids, American Cancer Society Cancer Action Network, American Heart Association, American Lung Association, Americans for Nonsmokers' Rights, and Truth Initiative.

View the report, including state-by-state information, and a ranking of the states.