This morning, Scioto Analysis published a cost-benefit analysis on the potential impacts of raising Ohio’s cigarette tax by $1.50 per pack, from $1.60 to $3.10, on Ohio’s economy. An increase of this size was proposed in Governor DeWine’s Fiscal Year 2026-2027 Governor’s Executive Budget in light of Ohio’s smoking rate, which is one of the highest in the country.
In this report, analysts estimate that the increase would generate $18.9 billion in social benefits and $816 million in social costs. Many of the associated health gains are expected to accrue over the next eight decades. They estimate that the benefits would be:
$18 billion in health benefits to teenagers who quit and never start smoking, discounted to present-day value
$100 million in environmental savings through reduced pollution and fires caused by smoking
$69 million in healthcare savings for nonsmokers who pay into pooled-risk programs like Medicaid and life insurance
$66 million in reduced healthcare and productivity costs to employers who employ smokers
$550,000 in reduced costs of secondhand smoke to a smokers’ family members
Analysts' estimates involve several sources of uncertainty, so they examine how changes in key inputs affect the results through sensitivity analyses. After running 10,000 simulations of potential scenarios of costs and benefits, analysts estimate the program will generate $5 to $95 in benefits for every $1 in costs. The net present value of benefits and costs is estimated to be between $4 and $73 billion. These results suggest substantial variation in potential outcomes but indicate that the benefits are likely to be positive overall.
This study is the latest in a series of cost-benefit analyses conducted by Scioto Analysis to demonstrate the use of cost-benefit analysis to analyze state policies. Past cost-benefit analyses and other analyses can be found here.
