The Campaign for Tobacco Free Kids (CTFK) study found that states could generate $9 billion by increasing cigarette taxes by $1 per pack.  The study also estimates that decreased cigarette use associated with the tax would save $52.8 billion in health care costs.  Along with the study, CTFK released a poll finding that 67 percent of Americans would support a $1 dollar per pack state tobacco tax increase.  The report also provides state-level data on the effects of the tax increase.

From the report:

• A Budget WIN: Even while reducing tobacco use, higher tobacco taxes have proven to be a reliable and predictable source of significant and immediate new revenue for the states. The declines in tobacco use will also produce considerable health care savings. 
• A Health WIN: Increasing tobacco prices by raising tobacco taxes is one of the most effective ways to reduce tobacco use, especially among youth. States can achieve even larger public health benefits if they use some of their new tobacco tax revenue to fund tobacco prevention and cessation programs.
• A Political WIN: As underscored by a new poll being released as part of this report, large majorities of voters of all political persuasions and demographic groups support increasing tobacco taxes. In contrast, majorities of voters oppose other options for balancing budgets, such as increasing other taxes or cutting important programs.

Full text:   Tobacco Taxes: A Win-Win-Win for Cash-Strapped States (PDF | 994.61 KB)

Campaign for Tobacco Free Kids. (2010). Tobacco taxes: a win-win-win for cash-strapped states.