Cigarette Tax

I have to hand it to our friends over at Blue Hampshire, they sure know how to pick and choose facts for a story.

Take for instance the article found HERE, "What a surprise! Cigarette Tax revenues down!"

In their article they post this single quote from an article on WMUR:

"Administrative Services Commissioner Linda Hodgdon said Wednesday that revenues are $4 million below estimates. She said the biggest disappointment was the tobacco tax, which was $2.6 million behind projections for the month and now is $3.5 million behind for the year. The Legislature cut the tax 10 cents hoping to spur sales, but Hodgdon said sales are behind last year's numbers."
(From WMUR story below.)

The WMUR story can be read HERE.

Read the title Blue Hampshire gave to this article and read the quote posted very carefully before going on.

Let's start with the simple fact that less revenue equals less smokers.  Since smoking leads to health problems and more need for health care which puts a drain on the system for the rest of us I fail to see how anyone could see this as a bad thing.

But I go on...

If you go to the WMUR story you'll find this part conveniently left out of the Blue Hampshire version:

Despite the poor month, the state is still almost $11 million ahead of projections. Through October, the state has collected $498 million for the fiscal year that started July 1.

It turns out what our liberals friends are claiming is not true.  Cigarette revenue is down for a single month, over all it's up $11 over projections.  It's revenue as a whole (from all sources) that's down for the year.

One other factor to consider is that while Blue Hampshire is implying that somehow the cut in taxes is directly responsible for the loss in revenue if you look at other facts you'll see it isn't the case.  Any reasonable thinking person should question any claim that decreasing the price resulted in fewer sales (as pointed out in the article). Reality can be found in the version of the story posted by the Nashua Telegraph which shared this additional bit of information:

The state issued 55.7 million tax stamps for cigarette packs from this past June through October.

Over the same period last year, 57 million tax stamps were bought.

Tobacco sales have been going down steadily in New Hampshire and other states as fewer people smoke.

The state sold 71.5 million tax stamps during the five-month window five years ago.

So over all fewer people are smoking as evident by the salves over the past 5 years. If we want to look at true cause and effect then perhaps the smoking ban passed by Democrats in 2007 (4 years ago) should be considered as well for its impact on cigarette revenue.

Comments

[C. dog]

Please, stop calling taxes revenues. That's the epitome of gov-speak and demo-blogery. I expect more from you. Other than that, this is clearly yet another sales tax masquerading as something else in order to preserve the ruse that the Grate State of NH is a sales-tax free zone.
– C. dog digs up another bone to contend

[Chris]

I don't understand this post. The WMUR excerpt states that the tobacco tax "is $3.5 million behind for the year." The other WMUR excerpt (seemingly referring to overall revenue) says that state is "still almost $11 million ahead of projections. Through October, the state has collected $498 million for the fiscal year that started July 1."

The post then goes on to say "Cigarette revenue is down for a single month, over all it's up $11 over projections. It's revenue as a whole (from all sources) that's down for the year."

That seems to completely contradict the info from WMUR, which indicated that cigarette revenue is below projections for the year, while revenue from all sources is up for the year.

[Rick Barnes]

Chris, my best guess in the confusion in numbers is that they are blurring a line before projected estimates and comparisons to last years sales.

As I pointed out in the very last quote, sales have dropped significantly over all since the smoking ban went into effect and has continued to drop every year since. What looks like happened is they estimated we've have less in sales then last year so we expected a drop in tax revenue but with the tax cut the amount collected, while still less then last year, is more then they projected for the year.

Add to that the confusion between monthly sales/estimates and yearly sales/estimates.

[C. dog]

Hence –
Budget smudget.

[Ed Naile]

Here is ONE thing that is perfectly clear.

They will spend it no matter what.

[Chris]

I pulled up another article to help clarify, and the tobacco tax is definitely under projections for the year (as well as less than last year), not $11 million above projections as original the post states. The $11 million above is indeed for overall tax revenue.

Referring to tobacco tax:
"Through the first four months of the financial year, the tax brought in $77.5 million, which was $3.5 million or 4.3 percent less than legislative budget writers predicted."

Referring to tax revenue overall:
"As for all state taxes and fees, the state brought in $106 million last month. That’s $4.2 million off this month since legislative budget writers assumed $110 million would come in the door over that time. For the year thus far, the state has taken in $10.9 million over projections."

http://www.nashuatelegraph.com/newsstatenewengland/938717-227/4-months-in-cigarette-tax-cut-no.html