According to Brian Gottlob, a Dover-based senior economist, the PolEcon Research findings question statements that New Hampshire revenues would improve following a reduction in the excise taxes on tobacco products.

Gottlob performed an analysis of New Hampshire sales of tobacco products and tax changes during the last decade and potential influence on other sales revenues of the products such as alcohol, gasoline and some products. According to the research findings, there is no direct relation between the sales of tobacco products and the abovementioned products, which contribute to the revenues collected for the State budget. The PolEcon Research contradicts the findings introduced by the New Hampshire Grocers Association and presented to the state legislature, which resulted in the passage of bill to decrease the tax on cigarettes by 10 cents per pack and tax on other tobacco products by another 17%.

PolEcon’s research found that the state will likely to face revenue decrease on its tobacco revenues in case it reduces the excise tax.
Kevin O’Flaherty, regional Director of Advocacy for Campaign for Tobacco-Free Kids said during a press conference that the retailers and convenience store owners have become the servant of tobacco industry once again in their misleading effort to decrease the cigarette tax. He stated that higher tobacco taxes haven’t affected local small businesses. In the contrary, the tax increases have been demonstrated to have a positive effect on the state revenues, but protect local adolescents and young adults from taking up cigarettes and develop an addiction.

The research, named “The Fiscal and Economic Impacts of Decreasing the Cigarette Tax in New Hampshire, March 2011” provides the following key conclusions:

• New Hampshire budget will miss $9 million in lost tax as the result of tobacco tax reduction,
• Sales of tobacco products do not have a considerable impact on other products’ sales such as Alcohol, Gasoline and meals.
• With a gallon of gasoline selling above $3 per gallon, it is not likely that too many people will travel to neighboring states to purchase tobacco products.
• Flavored tobacco products, growing into popularity among local teens, such as cherry cigars and flavored sticks, will become even more appealing and affordable to them.

Campaign for Tobacco-Free Kids was joined by other health organizations, such as American Heart Association, American Lung Association, American Cancer Society and others, which called the New Hampshire lawmakers to introduce higher taxes on tobacco products in order to decrease tobacco consumption and spend more on cessation programs.

Smoking is the number one cause of preventable deaths in the country. Health organizations claim that increasing prices on tobacco products is one of the most effective methods of preventing non-smokers from starting to smoke and encouraging smokers to quit. In the past several years many states have increased tobacco taxes, and reported decrease in smoking rates.

A reduction in NH’s excise tax on tobacco products would likely lead to increase in the use of tobacco products and result in more than $20 million in long-term expenses on health care.

By Sara Norton, Staff Writer. Copyright © 2011 Cigarette-Store.org. All rights reserved.