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Maine Lawmakers Consider Another Cigarette Tax Hike
05/06/2013   Reported By: A.J. Higgins

Higher tobacco prices were in the spotlight today in Augusta, where lawmakers considered a pair of bills that would raise state taxes on cigarettes by $1.50 a pack. During a public hearing, proponents claimed the new taxes would generate more than $50 million a year in new revenue for the state. But opponents argued that the increases would hurt profits for businesses that sell tobacco products. A.J. Higgins has more.

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The tax on cigarettes has been raised more than a half-dozen times since 1995. Ed Miller, of the American Lung Association of the Northeast, says when those costs go up, there are always two predictable results.

"Every time we've raised it, two things have happened: Our smoking rates and consumption have dropped and the revenue has increased," Miller said. "Good tax policy, and it's very good health policy."

Miller led a small army of supporters and allied advocacy groups to the Legislature's Taxation Committee to endorse two bills that would increase the state tax collected on cigarette sales from $2 to $3.50 per pack. The proponents are also backing a second bill that would close what they say is a loophole in Maine tax laws that permits some tobacco products, such as little cigars and chewing tobacco, to be taxed at a lower rate than cigarettes.

Tobacco costs do influence behavior, according to Joanne Joy of the Maine Network for Healthy Communities. Joy said low-income Mainers and those struggling with psychological issues have turned to other tobacco products as the current $6 to $7 cost for a pack of cigarettes becomes increasing prohibitive.

Joy says she has a family member with schizophrenia who switched from cigarettes to lower-taxed loose tobacco.

"And believe me, he smokes more now that he rolls his own," Joy said. "And there has been this loophole for counselors. The counselors tell me that folks will not discuss the cost of tobacco because they're so pleased with their ability to budget around the cost and buy other tobacco products. We have left these populations most at risk out of the equation of motivation to quit smoking by raising the prices."

Tyler Lang, a junior at Maranacook Area Community High School in Readfield, tells a legislative panel that students at his school support higher taxes on tobacco products. Photo: A.J. Higgins.Supporters of the two bills pointed to studies showing that increasing the cigarette tax would lower the level of high school smoking in Maine by nearly 16 percent, and prevent nearly 12,000 kids from becoming adult smokers.

Tyler Lang (left), a junior at Maranacook Community High School in Readfield, led a group of students who had signed petitions supporting the tax increases.

"We urge you to close the loophole and equalize the tax on other tobacco products. These candy-coated tobacco products need to be taxed at the same rate as cigarettes so they aren't affordable to young people -- please raise the price, so kids won't pay," Lang said.

But opponents of the bills say the statistics are flawed. Mary Green, of Monticello, works for The Cigarette Shopper, and she says when she's on the register, the price of cigarettes for young smokers is irrelevant.

"I can ask a customer, 'Do you think if the price goes up, the kid next door is going to quit?' What do they tell me? They tell me they don't even look at the cheap tobacco," Green said. "The kids that want to be cool and smoke already purchase the premium cigarettes."

Meanwhile, retailers argued that a higher tax would drive smokers to buy their cigarettes on the the Internet and fuel a black market for cigarette sales within the state. Will Beck represents the Maine Energy Marketers Association and he worries about lost sales to neighboring New Hampshire.

"What other potential tax revenue could be lost while they're over there? If someone could save $1,000 a year on cigarettes, they have to go over there quite a few times - what other purchases will they have? Groceries, alcohol, maybe a TV or a couch, while they're over there," Beck said.

Should the bills pass the House and Senate, Gov. Paul LePage could issue a veto. LePage threatened to veto a similar tax increase on cigarettes two years ago.

Photo: A.J. Higgins


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