Additional Sales Tax On Cigarettes Is Short Sighted

March 28, 2006

One of the most challenging tasks I face as a state legislator is working out the details and complexity of the state budget. The number one priority of each legislator is making sure there is funding for the necessary services that are provided for the benefit of our constituents. Since coming to Albany, I have fought hard to oppose taxes and promote good budgeting. To maximize service yet balance the budget, streamlining services and government reform are some of my first thoughts of how to get the most out of each taxpayer dollar.

This year’s Executive Budget includes levying an additional dollar to the state tax on cigarettes. I believe that this is not a prudent thing to do and I want my constituents to know I strongly oppose this idea. The simple act of another surcharge on a package of cigarettes symbolizes poor government planning. All too often the group-think in Albany places an emphasis on stop-gap measures like raising revenue through taxes or fees, only to become self-defeating in the end.

Over the last six years, New York State has continuously increased the tax per pack of cigarettes driving many smokers to seek cigarettes from other sources such as the internet, neighboring states, and Indian-owned convenience stores. This additional levy would be the latest installment of taxes on cigarettes dedicated to paying for government programs that have become dependent on this diminishing source of revenue. To sustain revenue levels, New York State has had to continuously increase the state sales tax on cigarettes, first in March of 2000 with a 55 cent per pack tax and again in April of 2002 with a 39 cent increase.

As the tax continues to rise, the efforts to sustain and grow revenue become counter productive, forcing people to purchase their cigarettes elsewhere. I feel that increasing the state tax on cigarettes will, over time, further decrease revenues. In the alternative, consider that last year the state Legislature enacted a law requiring the Tax Department to collect taxes on Indian sales of tobacco and other products sold to non-Indian New Yorkers, effective March 2006. For a myriad of reasons, the start date is being delayed, potentially costing New York state millions of dollars in lost revenue. I am confident that a solution will be found; allowing the state to soon begin tax collection on tribal sales to non-Indian New Yorkers and in effect recapturing existing tax revenue going uncollected. This issue should be resolved before adding a new tax on the purchase of tobacco products.