|
Cigarette Tax Hike — It's All About the Money
By State Rep. Richard F. Ferrari, East Granby
Make no mistake about it: The 61-cent per pack increase in the tax Connecticut is imposing on its cigarette-smoking citizens (the total tax increases from 50 cents to $1.11 per pack on April 3) has nothing to do with improving public health. The tax hike gained final legislative approval and was signed into law by Governor Rowland last week.
Even though an economic downturn had taken hold in Connecticut, which was certain to result in revenue shortfalls, the majority Democrats at the General Assembly last year insisted on approving several expensive new spending programs. By fall, it was clear that because of the recession and the new spending programs, the state was facing a substantial deficit. It is expected to grow to as much as $400 million by the end of this fiscal year and to as high as $650 million for the 2002-03 fiscal year.
Although the Democrats agreed to some spending reductions during last November's special session to help reduce the projected deficit, their proposal also relied too heavily on more borrowing and in the end did not completely eliminate the deficit. Even when making prudent spending reductions is the responsible thing to do, the Democrat leaders at the General Assembly invariably choose to deal with deficits by raising taxes—even during economic hard times when tax increases can prolong a recession and when families and employers can least afford them.
In Connecticut, cigarette smokers are a relatively small and not very vocal minority and are an easy target for the legislature's liberal big spenders. Smokers, a mostly low-income minority group already relegated to second-class citizenship because of their addiction (the median income for Connecticut smokers in 2000 was $37,292 compared to $50,087 for all Connecticut households) will now be subject to further discriminatory treatment by virtue of this tax.
The majority of us who do not smoke cigarettes may not be offended by this tax because we are not affected by it personally. However, we should be concerned about the precedent these kinds of taxes set. If you like to eat fast food, your future bills for a double bacon cheeseburger, large order of French Fries and a super-sized soda could be significantly increased by a "fat tax" that is actually being seriously considered by people who should know better. Do you like the safety, security and comfort that you get in an SUV in exchange for relatively low gas mileage? You could someday find the cost of owning one substantially increased by taxes designed to encourage you to buy smaller, more fuel-efficient vehicles that you would otherwise never consider.
Discriminatory taxes that target groups of people—ostensibly to improve public health or safety—often have unintended consequences that make a bad situation worse. In the case of higher cigarette taxes, many smokers who cannot or do not want to quit and who cannot afford to buy a pack of high-tax cigarettes in Connecticut will purchase them online at substantially lower cost, travel across state lines to buy them in low-tax states, or purchase them from criminals who buy them in quantity in low-tax states, smuggle them into Connecticut and resell them at a profit—but at less cost than if purchased legally at retail stores.
In addition, many small businesses and convenience stores that rely on cigarette sales to stay afloat could go under if substantial numbers of smokers switch to underground sources to obtain their cigarettes. In either case, what initially looked like a tax bonanza to everyone who supported it could easily turn into a revenue loss for the state. It could also have unforeseen adverse effects on the economy as small businesses (which also pay taxes) dependent on cigarette sales fold and lay off employees—prolonging the recession and contributing to future deficits.
If taxes are to serve the legitimate purposes of providing critical services for the people of our state, maintaining and improving our transportation infrastructure and ensuring public health and safety, they also must be fair and reasonable. If they are perceived to be discriminatory, punitive or unfair, those who are targeted by them will find ways to avoid them. The cigarette tax hike recently approved by the General Assembly is just such a tax and that is why I voted against it.
Rep. Ferarri represents Connecticut’s 62nd District, which includes the towns of Barkhamsted, East Granby, Granby and New Hartford.
| 
