N.H. Cigarette Tax Debate Heats Up Senate Chambers

CONCORD, N.H. -- Competing studies have taken center stage as New Hampshire Senators take on the issue of reducing the state's cigarette tax.

As CSNews Online has been reporting since February, a study commissioned by the New Hampshire Grocers Association found that lowering the levy -- by 10 cents per pack -- would generate up to $13 million in additional tax revenue for the state. The study was conducted by Dr. Gregory Randolph and Dr. William Tasto, both economic professors at Southern New Hampshire University, and William D. Keip of Keip Government Solutions.

John Dumais, president and chief executive officer of the New Hampshire Grocers Association, explained to CSNews Online that even though a lower cigarette tax cause the state to lose some revenue from tobacco sales, the increase in the sale of other goods and services will more than make up for it.

The majority of the New Hampshire House of Representatives agreed and sent the bill to the Senate for review with a 236 to 93 approval vote on March 17.

The bill now stands in the Senate, which held a hearing on the cigarette tax rollback last week. No decision has been made in that chamber; however, just-released study by PolEcon Research, which was commissioned by several organizations including Campaign for Tobacco Free Kids, calls into question the study by the Southern New Hampshire University professors. It disputes claims the cigarette tax decrease would draw more people to the state who will spend more money, countering that the decrease in the levy will lead to a $9-million drop in state revenue, according to Seacoast Online.

The governor's mansion has also added to the debate. According to the news outlet, a spokesman for Gov. John Lynch said it would hurt revenues unnecessarily at a time when the state could not afford it. Furthermore, the decrease would have little effect on convincing smokers to cross state borders to buy cigarettes.

Dumais explained that 99 percent of his members support the measure and that many convenience store owners along the Maine and Massachusetts borders have complained that tobacco tax hikes have hurt their business, the Seacoast Online reported.

However, the PolEcon report stressed that any decline in sales has more to do with the cost of gasoline, and not the tobacco tax hikes. "Higher cigarette taxes haven't hurt New Hampshire's economy or convenience stores," Kevin O'Flaherty, the Northeast director for Campaign for Tobacco Free Kids, told the news outlet. "To the contrary, higher cigarette taxes have been shown to improve state revenue and increase the number of convenience stores while preventing kids from becoming addicted to these deadly products."