CONCORD — Smokers may be asked yet again to help pay for spending in New Hampshire’s next budget after the House voted to raise the tobacco tax 20 cents yesterday, a dime less than Gov. Maggie Hassan counted on in her budget.
The 193-167 vote sends the bill to the Senate.
The proposed increase would raise the tax to $1.88 per pack of cigarettes. The proposed increase also would apply to other tobacco products.
The tax is $1.68 now but will rise automatically to $1.78 on Aug. 1 if lawmakers take no action.
House Ways and Means Chairwoman Susan Almy said the primary reason to raise the tax was to pay for state services. She said the tax increase also will discourage teens from starting or continuing smoking.
“When you smoke as a teen, you have a much harder time quitting,” said Almy, D-Lebanon.
Hassan said she will continue to advocate for the 30-cent increase she counted on in writing her budget.
“We want to make sure we have the revenues we need to address our priorities, so I will continue to talk with the House and Senate about that,” she said after the House vote.
Each dime raises $10 million a year.
Even with the increase, New Hampshire would have a lower tax than neighboring states. According to the Campaign for Tobacco-Free Kids, Rhode Island’s tax rate is $3.50; Connecticut, $3.40; Vermont, $2.62; Massachusetts, $2.51; and Maine, $2. New Hampshire’s rate also is lower because it has no general sales tax unlike other states.
Opponents argue it nevertheless puts New Hampshire at a competitive disadvantage in attracting cross border business.
“When you raise a tax, you discourage a certain behavior,” said state Rep. Laurie Sanborn, R-Bedford.
Republicans cut the tax 10 cents two years ago to $1.68 to encourage cross-border shopping. At the time, the New Hampshire Grocers Association and others argued the reduction would make New Hampshire more competitive. House Republican leaders insisted on cutting the tax to encourage people from other states to shop in New Hampshire.
The rate cut was contingent upon revenue not dropping below receipts for the previous two years, but revenue has dropped and the rate is due to rise automatically back to $1.78 on Aug. 1.
Under former Gov. John Lynch New Hampshire raised its tax repeatedly from 52 cents per pack in 2005 to the $1.78 rate in effect until Republicans dropped it a dime in 2011.