Tobacco taxes in Md. still falling

With fewer smokers, revenues dip $6.7 million

`It's certainly not a surprise'

August 14, 2004|By Jamie Smith Hopkins | Jamie Smith Hopkins,SUN STAFF

One sign that Maryland's stop-smoking campaign is paying off is what isn't - the state collected $6.7 million less in tobacco taxes last fiscal year as sales continued to dip.

Revenue decreased almost 2.5 percent, which is typical in recent years and slightly less than the state had expected, the comptroller's office said yesterday.

While cigarette purchases edged downward, revenue from lesser-used tobacco products such as snuff increased 12 percent, or $800,000.

All told, the state took in $272.4 million in tobacco taxes in the fiscal year that ended June 30.

That amounts to $3 of every $100 in the state's general fund, a small but significant portion.

"Everyone's expectation is that this is a declining revenue source, so it's certainly not a surprise and not a concern," said David F. Roose, director of the Bureau of Revenue Estimates for Comptroller William Donald Schaefer. "People are quitting smoking."

State revenues from cigarettes have been dropping almost continuously for nearly 30 years as health concerns and steep tax increases prompt Marylanders to give up the habit, Roose said.

"Declining use of tobacco products is significant in terms of health," said Joan Stine, director of the state's Center for Health Promotion. "It's the most preventable cause of death we have in the state and the country."

Although the state is getting less money from tobacco levies, revenues are rising from another "sin tax." Maryland collected almost $27 million from taxes on wine, beer and distilled spirits last fiscal year, an increase of about 4.5 percent.

The state taxes cigarettes at $1 a pack and alcohol at a variety of rates, from $1.50 a gallon for distilled spirits to 9 cents a gallon for beer. Chewing tobacco and similar products are taxed at 15 percent.

Maryland has spent about a decade trying to persuade residents not to smoke, an effort helped in recent years by its share of the huge national tobacco settlement. Its public awareness campaign includes billboards emblazoned with the slogan "Smoking Stops Here."

In January, the state Department of Health and Mental Hygiene said cigarette use dropped 12 percent among adults between 2000 and 2002. The department's surveys also found that about 30 percent fewer children of middle school age and almost 25 percent fewer of high school age were smoking cigarettes.

Overall tobacco use also decreased, but less sharply, a trend echoed by the tax revenues.

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