Stateline.org story: Tobacco taxes and recessions
My first story at Stateline.org — “Recession ushers in more tobacco taxes” — went live today. Here’s an excerpt:
Clipping away at a $590 million deficit, Rhode Island this April raised its taxes on cigarettes by $1 to $3.46 a pack – the highest rate in the country. With the backing of its governor, a former tobacco lobbyist, Mississippi in May imposed its first tax hike on smokers in more than two decades – up 50 cents to 68 cents a pack – and is already considering another increase.
For lawmakers scrounging to balance state budgets in a recession, tobacco taxes were one of the most popular options on the table this year. Seven states — Arkansas, Florida, Hawaii, Kentucky, Mississippi, Rhode Island and Vermont — tapped smokers’ wallets to help fill their budget gaps, up from two states in 2008. More than 20 additional states debated whether to follow suit, according to the National Conference of State Legislatures.
But there are growing signs that tobacco, which generated about $19 billion for states in revenues from sales and excise taxes last fiscal year, might not deliver the new money state lawmakers are hoping for.
Classic tobacco cigarettes are so pass