A New Hampshire Giveaway to Big Tobacco

July 28, 2011

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When the New Hampshire Legislature cut the state's cigarette tax by 10 cents a pack, effective July 1, it was touted as a way to boost the state's economy by reducing cigarette prices and attracting smokers from neighboring states.

It's outrageous enough that a state would encourage sales of a deadly and addictive product — one that kills 1,700 New Hampshire residents and costs the state $564 million in health care bills each year.

Now it turns out that the promised cigarette price cut is a total mirage. As reported by The Portsmouth Herald, tobacco companies immediately hiked prices, pocketing the increased revenue instead of passing it on to consumers.

As Mike Rollo of the American Cancer Society told the paper, 'They basically gave a bailout to the tobacco companies.  They certainly didn't help the consumer or the small-business owner.'

The tax cut will cost New Hampshire millions in revenue at a time when the state is making deep cuts to funding for hospitals, the state university system and other vital programs.

So who's behind the Big Tobacco giveaway? New Hampshire newspapers point the finger at House Speaker William O'Brien, who insisted that any budget agreement include the cigarette tax cut.

'The millions of dollars in tax revenue that could have helped the state during these troubled times was literally given to the tobacco companies by O'Brien and his minions,' The Portsmouth Herald stated in an editorial.

O'Brien had plenty of help from tobacco companies. 'In all my years up here, I've never seen an industry twist and push our Legislature the way the tobacco industry pushed,' Sen. Jack Barnes said in a speech on the Senate floor.

New Hampshire's experience is a lesson for legislators and voters across the country.  When tobacco companies and their allies advocate for cigarette tax cuts, the ultimate winner will be Big Tobacco, not consumers.

The right policy is to increase the cigarette tax — a proven way to reduce smoking, especially among kids, and raise much-needed revenue at the same time.  It's a health win, a revenue win and also a political win because polls show voters overwhelming support increasing the cigarette tax.