Maine's high cigarette tax far from being tapped out

Wednesday, May 8, 2002-Portland Press Herald

Maine's cigarette tax - among the highest in the nation - appears to be enjoying a banner year. Generating almost $95 million in this fiscal year, it surpassed last year's total by $17 million and has now passed corporate income tax as the third-highest money-maker for the state.

The real cause for celebration, however, is that state analysts are predicting that retailers will sell 3 million to 4 million fewer packs by the end of the 2002 fiscal year than in 2001.

Not everyone thinks that's good. Some worry that state government has become too dependent on taxing bad habits, and that as smoking declines, so will revenues from cigarette taxes. The King administration argued earlier this year that Maine had reached the tipping point, where a further increase in the cigarette tax would lead to a decrease in tax revenues, as smokers kick a habit they can no longer afford.

We disagree. The Maine Lung Association says that Maine is nowhere near its tipping point. New York levies a $1.50 per pack tax and is still generating higher revenues than it did at lower tax rates.

Of course, the cigarette tax can be measured in savings, not just in tax costs. Every year tobacco products kill 2,500 residents and add $1.15 billion in health care costs. If more smokers kick the habit because of the tax, both they and the state's taxpayers win.

The greatest value of a high cigarette tax is the effect it has on young smokers. When butts cost too much, young smokers not yet dependent on nicotine will quit. Since 1997, when the state doubled the cigarette tax from 37 cents to 74 cents, Maine's teen smoking rate dropped by 36 percent.

State officials shouldn't panic over the state's heavy dependence on the cigarette tax. They should, on the other hand, remain deeply concerned about the continuing addiction to cigarettes and the cost it places on all Mainers.