A price worth paying

Our view : Drop in cigarette tax collections is welcome news

August 03, 2008

One of the latest shortfalls to hit the state budget may also prove the healthiest: People are buying fewer cigarettes in Maryland. Sales are down 25 percent since the tax on cigarettes was doubled to $2 per pack in January; the budget approved last spring anticipated a 17 percent drop.

As a result, the state comptroller's office is expected to collect $20 million to $25 million less in tobacco tax revenue in the current fiscal year.

There are only two explanations for this - either smokers are buying (and smoking) fewer cigarettes or they are getting their cigarettes elsewhere. While a greater amount of illicit tobacco trade is likely - state investigators seized about 10 percent more in smuggled cigarettes this year than the year before - it's almost certain that the bulk of the decrease is from people smoking less.

It can't be proved statistically, at least not yet, but that's exactly what happened when the tobacco tax was increased in the past - in Maryland and elsewhere. Anti-smoking advocates expect those results to be documented by health department surveys next year.

Raising the cigarette tax was never going to be a reliable way to finance state government. But this was one case where burdensome taxes have proved to be in the public interest.

Gov. Martin O'Malley's decision last year to decouple the cigarette tax from an expansion in Medicaid eligibility was a wise move. The state will still need to reduce spending to compensate for the lost tax revenue, but the savings won't have to come from working families who can't afford health insurance.

The health benefits of curbing tobacco use are so clear that it's a wonder the White House continues to oppose giving the Food and Drug Administration the power to regulate it. The House may have approved the measure by an overwhelming majority last Wednesday, but the chances the Senate will pass the bill with a veto-safe margin appear slim at best.

It's fine for government to encourage people to stop smoking, but more strictly regulating and taxing the tobacco trade works even better.

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