From WisPolitics.com/WisBusiness.com …
— While declining cigarette use in Wisconsin is a “huge public health win” for the state, it also comes with fiscal implications as related tax revenues have plummeted over the last 15 years.
That’s according to the latest Wisconsin Policy Forum report, which shows revenue from the state’s cigarette tax dropped to $369.6 million over the 12-month fiscal year ending June 2025, marking a decline of 8.2% over the year. That’s fallen from $950.9 million in 2010.
Still, authors emphasize the “numerous” positive impacts of lower rates of cigarette use in the state, leading to longer life for former smokers and “sparing many state residents from life-altering chronic health conditions.”
Both of these impacts are tied to the broad decline in cigarette use among U.S. adults, which had fallen to 9.9% in 2024 based on the National Health Interview Survey, a decline of 4.1 percentage points over five years.
But at the same time, the use of nicotine vaping devices has also risen, reaching 7% of U.S. adults in 2024, according to a CDC survey. Over the same five-year period, that rate had risen by 2.5 percentage points, the report shows.
While those figures aren’t available at the state level, authors say other indicators suggest usage of cigarettes and e-cigarettes alike in Wisconsin “generally tracks” the national rate or is just above it.
“As our state increasingly trades cigarette tax revenues for vapor tax revenues, one implication is that the role of tobacco and nicotine excise taxes is dwindling as a contributor to the state’s general fund,” authors wrote.
While nearly $6 out of every $100 going into the state’s general fund in 2010 came from these taxes, that had declined to just over $2 by 2024.
WPF predicts cigarettes are “all but certain” to keep declining as a major revenue source for Wisconsin. And though revenues from other nicotine products are on the rise, authors note “since those products are taxed much less heavily, those revenues are not offsetting what is being lost.”
See the report and see the release below.
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