THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

N.H., Vt. raising cigarette taxes

Rates are a boon to state revenues

Email|Print|Single Page| Text size + By
Associated Press / June 30, 2008

WEST LEBANON, N.H. - Cigarette taxes are on the rise in Vermont and may be in New Hampshire, too, though the Granite State will remain a relative bargain compared with states around it.

Vermont's cigarette tax rate climbs by 20 cents to $1.99 per pack effective tomorrow, a jump that follows a 60-cents-per-pack increase in 2006.

Both of the increases were pegged to pay for the state's new Catamount Health insurance program.

New Hampshire's cigarette tax, now $1.08 per pack, is slated to jump to $1.33 in October if it doesn't generate at least $48 million in revenues between July and October.

While both states like the revenue, both also are encouraging and welcoming the gradual decline in the numbers of people lighting up.

"Certainly, raising taxes on cigarettes is good public policy if you are trying to curb smoking," said Dennis Delay, deputy director of the New Hampshire Center for Public Policy Studies.

"But I think the state is stuck between wanting to discourage smoking in public places and still relying on cigarettes as a revenue source, and I think that source will become perhaps not as stable as it has been going forward," Delay added.

Jim Reardon, commissioner of Vermont's Department of Finance and Management, is more in the business of managing revenues than protecting public health, but he says he does not mind if higher taxes lead to fewer smokers.

"If there is a revenue decline in tobacco, that has a correlation with less people consuming tobacco products.

"That is certainly a revenue problem I'd like to have, because that's a positive outcome," Reardon said.

Even with Vermont's increase, Reardon said merchants along the state's border with New York may see an increase in cross-border traffic. That's because the Empire State recently raised its cigarette tax to $2.75 per pack, the highest in the country.

The federal government takes a tax bite, too, at 39 cents a pack.

In New Hampshire, a rate of $1.33 per pack would leave that state's tax easily the lowest in the region.

Massachusetts charges a cigarette tax of $1.51 a pack and is considering raising it. Maine's tax rate is $2 per pack.

The result is a boon to New Hampshire state revenues, but any increase may be dampened a bit by the high cost of driving to save money on smoking.

"We sell a lot more cigarettes than we smoke, and the question is how far we've gone down on that curve because of the price of fuel," said Representative Susan Almy, Democrat of Lebanon and chairwoman of the House Ways and Means Committee.

  • Email
  • Email
  • Print
  • Print
  • Single page
  • Single page
  • Reprints
  • Reprints
  • Share
  • Share
  • Comment
  • Comment
 
  • Share on DiggShare on Digg
  • Tag with Del.icio.us Save this article
  • powered by Del.icio.us
Your Name Your e-mail address (for return address purposes) E-mail address of recipients (separate multiple addresses with commas) Name and both e-mail fields are required.
Message (optional)
Disclaimer: Boston.com does not share this information or keep it permanently, as it is for the sole purpose of sending this one time e-mail.