Lawmakers approved the largest cigarette tax hike in state history this year. The 75-cent hike brings Massachusetts' cigarette tax up to $1.51 per pack, the highest of any state in the country.

Maine's cigarette tax is among the nation's highest. Effective Oct. 1, 2001, Maine's excise tax on cigarettes increased from 74 cents to $1 per pack of 20 cigarettes. The increase made cigarette taxes the state's third largest revenue line, behind the individual income and sales tax lines.

Each time Massachusetts lawmakers have increased cigarette taxes during the past two decades, the state has enjoyed an injection of new cash, according to an Associated Press review of revenue statistics.

Each high is followed by a steady but small decline.

In 1985, two years after lawmakers hiked the cigarette tax from 21 cent to 26 cents, the state pulled in nearly $175 million in tobacco excise taxes. By 1992, revenues had fallen 21 percent, to $140 million.

Lawmaker then raised the cigarette tax to 51 cents, sparking another spike in revenues up to $237 million in 1994, the first full year the tax was in effect. Three years later, revenues had slipped to $233 million.

In October of 1996, lawmakers again hiked the cigarette tax, up to 76 cents a pack. Revenues jumped to $300 million, but by 2001 had slipped 10 percent to $270 million.

The pattern in part reflects declining smoking rates, a result that thrills public health officials, but could undermine the effectiveness of cigarette taxes to bail out fiscally strapped states.

"We want to put ourselves out of business," said Dr. David Rosenthal, chairman of the anti-smoking Massachusetts Coalition for a Healthy Future.

"There is a projection of a decline of 17 percent in teen smoking next year," he said. "This is what we see every time we raise taxes for cigarettes. We make cigarettes not as affordable for teens who don't have a lot of expendable cash."

Dwindling numbers of smokers hasn't stopped lawmakers from relying on higher cigarette taxes.

This year the Legislature doubled the tax to $1.51. The increase, which took effect at the end of July, is expected to bring in about $462 million in 2003, a 71 percent jump.

Lawmakers said higher taxes will help avoid deeper cuts to state services, although anti-smoking advocates complained that programs designed to discouraged smoking sustained some of the deepest budget cuts.

Early indications are that the higher tax is doing what lawmakers hoped.

In August, the first full month the tax was in effect, the state took in $38.5 million in cigarette excise taxes, compared to $25 million in August of last year.

Revenue officials say it's impossible to predict a trend from a single month, and warn revenues could slip if sales slide. Some store owners have reported declines in sales.

Many smokers aren't happy at being singled out to help the state balance its books. A pack-a-day smoker in Massachusetts will spend an extra $274 dollars a year as a result of the tax hike.

Amy Mrozowski, puffing on a cigarette outside a Boston office building, said there are other places the state could turn for tax dollars.

"There are so many other things that are bad for you," said Mrozowski, 21, a Northeastern University student. "As college students, we don't have much money."

Higher taxes could also drive smokers to the Internet or neighboring states in search of cheaper cigarettes.

Nationwide, about 17 states have raised cigarette taxes this year in part to help shore up dwindling revenues.

That trend not only punishes smokers, but is fiscally untenable, according to tobacco industry representatives.

"From a long term budget perspective, it doesn't make sense. You are basically funding the expansion of existing programs or new programs through a revenue source whose base is declining," said Brendan McCormick, a spokesman for cigarette manufacturer Philip Morris.

Several studies have linked higher taxes with declines in smoking.

A 2001 study in the American Journal of Public Health found higher cigarette taxes reduced smoking rates among pregnant women.

An April, 2001 study by researchers at the University of Illinois and University of Michigan concluded "increases in the real price of cigarettes ... will decrease the number of adolescents who start smoking."

Higher cigarette taxes in Massachusetts, combined with the state's anti-smoking campaign, have helped whittle down tobacco use, particularly among young people, according to state health officials.

Between 1996 and 2000, smoking among 8th and 10th graders in Massachusetts fell by 40 and 27 percent respectively, far faster than the nationwide drop of 17 and 16 percent.

From 1995 to 2000 smoking among all high school students in Massachusetts dropped 25 percent.

Even those who continued to smoke were smoking less. From 1993 to 1999, during which time lawmakers approved two tax hikes, the average number of cigarettes smoked by adult smokers fell from nearly 20 to just over 15.

article from gazettenet.com

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