Tobacco Control and Prevention

Increasing Taxes on Tobacco Products

Raising the tax on tobacco products is scientifically proven to be the most effective way to prevent children from starting to use tobacco and help adult users quit.

A $2 increase on cigarettes with an equivalent increase on other tobacco products will have far reaching health benefits including preventing 12,100 New Mexico kids from becoming smokers and preventing 7,700 premature deaths due to smoking.

Raising tobacco taxes to deal with revenue challenges is strongly supported across party lines in New Mexico. A poll conducted by Public Opinion Strategies shows 83 percent of New Mexicans support raising the tobacco tax. In the impending budget battle, raising taxes on tobacco products is one of the few options that everyone can agree on.  

New Revenues, Public Health Benefits & Cost Savings from a $2 Cigarette Tax Increase in New Mexico


  • The current state cigarette tax is $2.00 per pack (18th among all states and DC).
  • Annual health care expenditures in New Mexico directly caused by tobacco use are $844 million.


Projected New Annual Revenue from Increasing the Cigarette Tax by $2.00 Per Pack:  $28.63 million



New Annual Revenue is the amount of additional new revenue the first full year the tax increase is in effect.  The state will collect less new revenue if it fails to apply the rate increase to all cigarettes and other tobacco products held in wholesaler and retailer inventories on the effective date. 



Projected Public Health Benefits for New Mexico from the Cigarette Tax Rate Increase

Percent decrease in youth (under age 18) smoking:


Youth under age 18 kept from becoming adult smokers:


Reduction in young adult (18-24 years old) smokers:


Current adult smokers who would quit:


Premature smoking-caused deaths prevented:


5-Year reduction in the number of smoking-affected pregnancies and births:


5-Year health care cost savings from fewer smoking-caused lung cancer cases:

$2.81 million

5-Year health care cost savings from fewer smoking-affected pregnancies and births:

$3.75 million

5-Year health care cost savings from fewer smoking-caused heart attacks & strokes:

$5.98 million

5-Year Medicaid program savings for the state:

$10.85 million

Long-term health care cost savings from adult & youth smoking declines:

$476.06 million

12.28.20 ACS CAN/January 12, 2021

For other ways states can increase revenues (and promote public health) beyond just raising cigarette tax rates, see the CTFK factsheet, The Many Ways States Can Raise Revenue While Also Reducing Tobacco Use and Its Many Harms & Costs,

                       Additional information and resources to support tobacco tax increases are available at:

For more on sources and calculations, see or

Ann Boonn, Campaign for Tobacco-Free Kids

Frank J. Chaloupka, Tobacconomics

Katie McMahon, American Cancer Society Cancer Action Network


Funding for Tobacco Prevention Programs

The Tobacco Master Settlement Agreement is an agreement between the states and major tobacco corporations. The states sued big tobacco to recover the costs of tobacco-related diseases affecting people in every state. As a result, New Mexico receives millions of dollars each year from big tobacco. New Mexico also receives millions of dollars from tobacco taxes but spends only 4 percent of these tobacco revenues on tobacco prevention and cessation programs. 

There is no question that our lawmakers are faced with tough budget decisions. We must remember the reason these tobacco settlement payments are made each year, and consider long-term solutions to the state’s recurring budget shortfalls. When tobacco settlement dollars are used for tobacco use prevention and cessation programs, they help fund life-saving work like: school-based programs that prevent youth from using tobacco; community-based programs for people disproportionately impacted by tobacco-related disease; and the statewide Quit Line that helps adults & youth quit tobacco. 




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