Cigaratte Sales Remain Down in Maryland
A leading health-care advocacy group in Maryland is preparing to tout numbers showing a sustained drop-off in cigarette sales since the state doubled its tobacco tax in January 2008.
In Maryland, 201.8 million packs of cigarettes were sold during 2008, down from 275.7 million in 2007 and 273.4 million in 2006, according to data gathered from the Maryland Comptroller's Office.
Vincent DeMarco, president of the Maryland Citizens' Health Initiative, attributed the decline almost entirely to the legislature's decision during a 2007 special session to raise the tobacco tax from $1 to $2 per pack.
From a revenue perspective, the higher tax more than offset the drop-off in sales -- in the year after the increase took effect, tobacco tax collections on cigarettes increased from $273.8 million to $418.0 million.
That's less than state fiscal analysts had anticipated, but the money helped fund an expansion of subsidized health care to more than 47,000 newly insured adults in Maryland.
"This was a big success," DeMarco said. "This shows that the dollar tax increase did exactly what public health advocates predicted."
In July 2008, The Post reported that cigarette sales dropped by nearly 25 percent during the first six months the tax increase was in effect. At the time, there was a good deal of speculation that smokers were picking up extra packs in lower-tax jurisdictions, including Virginia, Delaware, Pennsylvania and the District.
The data on that is inconclusive. DeMarco argued that purchases across state lines likely have not been widespread, given that cigarette sales have dropped in both Delware and the District during the same period, and that the District raised its tax to $2 in October. There have been modest upticks in sales in both Virginia (where the tax rate is only 30 cents) and Pennsylvania, but nothing approaching the magnitude of Maryland's decrease.
Data shared by DeMarco's group runs through 2008. In the early months of 2009, sales in Maryland were back up slightly, according to numbers kept by the Comptroller. That likely was in anticipation of a federal tobacco tax increase of 61 cents that took effect April 1, analysts say. Since then, Maryland sales have started dropping off again.
DeMarco's group is pushing the General Assembly to raise Maryland's tax another 75 cents to further expand health care in the state. With election season around the corner, that seems like a long shot for the coming session.
Posted by: maus92 | September 9, 2009 5:26 PM | Report abuse
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