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Michigan Department of Treasury Preliminary Report Shows Smoke-Free Law has Little Impact on Business

Contact: James McCurtis Jr. (517) 241-2112
Agency: Community Health, Department of

December 21, 2010

LANSING - The Michigan Department of Treasury recently released results from its report, The Early Impact of Michigan's Smoking Ban, with preliminary data showing that Michigan's smoke-free air law has had little to no impact on the state's food and beverage industry, including restaurants, bars, and nightclubs. The results are based on a year-over-year statistical comparison of statewide sales tax collections from this industry.

Since the smoke-free law was implemented in May, total sales tax collections have increased from 2.73 percent to 2.84 percent among taverns with beer/wine only; night clubs; family restaurants and cafeterias; and fast food, pizza, and lunch counters.

Some of the highlights of the report include:

- The state saw increases in year-over-year sales tax comparisons after the smoke-free air law went into effect among the following business groups: taverns with beer/wine only, night clubs, family restaurants and cafeterias, and fast food, pizza, and lunch counters.

- While taverns with liquor are seeing a 1.57 percent decrease in year-over-year sales tax collections since the smoke-free law took effect, taverns with beer and/or wine only have seen a 1.54 percent increase since May 1.

- Night clubs appear to be benefiting the most from the new smoke-free law. In the six months prior to the enactment of the law, night clubs were showing a 16.67 percent decrease in year-over-year sales tax collections. Since May 1, the sales tax collections are 0.19 percent above the previous year.

- The state saw a 6.9 percent decrease in cigarette sales from June through October 2010 over the same time period in 2009.

"The intent of the smoke-free law is to eliminate the exposure to secondhand smoke and provide a healthier environment for Michigan workers, the public and visitors," said Michigan Department of Community Health Director Janet Olszewski. "The recent Surgeon's General report provides irrefutable evidence that there is no "safe" level of secondhand smoke and brief exposure to secondhand smoke can do immediate damage and even prove fatal."

"The smoke-free law has been a success in making our communities healthier," said Dr. Gregory Holzman, Chief Medical Executive for the State of Michigan. "Now an employee does not have to choose between their health and a paycheck. Since the law has passed more people have attempted to quit smoking by calling the statewide Quitline. The Treasury report also indicates people are smoking less. These are both positive health trends. A secondary benefit of this law may be lower health care costs. Time will tell, but currently in Medicaid alone we spend $1.1 billion a year on tobacco-related illnesses."

The Michigan Department of Treasury report also concluded that drawing long-term conclusions about the effect of the smoke-free air law from this data would be premature. Data from other states show the best measure of the law's impact is through evaluating data that has been compiled over at least one full year following implementation of a smoke-free air law.

The MDCH released a report in September that showed 70 percent of Michigan residents support the statewide smoke-free air law. More than eight months after the enactment of Michigan's smoke-free air law, it remains very popular, and businesses and residents are showing an extremely high rate of compliance. To compare, Ohio public health departments received 36,558 complaints on non-compliance in the first year after going smoke-free, whereas Michigan health departments received fewer than 800 statewide. For more information, the report can be found at http://www.michigan.gov/treasury/0,1607,7-121-44402_44404---,00.html.

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