Where Will the Tax Money Go?

By: Capitol Correspondent Tim Skubick
By: Capitol Correspondent Tim Skubick

With the state tobacco tax going up 50 cents, how will the money be divided?

Michigan schools will get 20 cents of the 50, and 25 cents will go into the state's so called General Fund which pays for a variety of state services. Four cents will go into the Healthy Michigan Fund, which pays for a variety of health related costs. Some of the Healthy Michigan Fund will go for smoking cessation programs but not all of it. The final penny of the tax is earmarked for Wayne County and it's indigent health care program.

State health officials expect the teenage smoking rate to drop with this higher tax. The last time the tax went up, teen smoking fell of by 28 percent.

If older adults join the teens in giving up the habit, the state hopes to save even more health care dollars that won't be needed to treat the illnesses associated with tobacco.

The new tax takes effect on Aug. 1, and will generate over $292 million new dollars for the state budget.


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