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That’s bad enough – and it’s just to cover a putatively fixed bill.<\/p>\n
Now, Governor Minnesotans, being virtuous in a passive-aggressive sort of way, love “sin taxes”; tobacco is a common public policy kick toy in this state. \u00a0And It’s not going to work, of course.<\/p>\n For starters: \u00a0cigarette taxes never, ever deliver the kind of revenue that their proponents expect<\/a>.<\/p>\n Despite fanciful claims to the contrary, many tobacco tax hikes across the country have failed to produce the promised revenue. In 2009, Washington, D.C. raised its cigarette tax from $2.00 to $2.50 per pack. The District projected the new tax would generate $45 million in revenue, about 20 percent above 2009 levels. Instead, revenues came in $12 million below projections and $4.2 million lower than before the tax was imposed. Similarly, New Jersey reported a $52 million shortfall in tobacco tax revenues after it raised its cigarette tax by 17.5 cents in 2007.<\/p><\/blockquote>\n The reason for this? \u00a0Addiction notwithstanding, cigarette smokers are people – and people alter their behavior to avoid paying taxes on discretionary things like smoking. \u00a0If a tax increase jacks up the price of a pack of smokes by 10%, then all other things being equal, people cut their spending.<\/p>\n “Yay!” say the tax’s proponents. \u00a0“10% of people quit smoking! \u00a0Or they smoke 10% less!”. \u00a0Some do. \u00a0Others switch to cheaper cigarettes, or buy from the black market<\/a>\u00a0that always, inevitably burgeons<\/a> whenever government cracks down on something people want; at any rate, people avoid paying the tax as best they can<\/a>. \u00a0It’s Econ 101.<\/p>\n (Indeed, the public health benefits of taxing smoking seem to have stalled<\/a> over the past twenty years)<\/p>\n But government can’t seem to avoid the spending that was to be based on all that tobacco money, and goodness knows no DFL administration would ever roll back an expenditure that we can’t afford. \u00a0Which means:<\/p>\n Due to these declining revenues, states often turn to broad-based tax increases to pay for an overspending problem. A recent NTU study also showed that 41 of 59 state tobacco tax increases from 2001-2006 were followed by more expansive tax increases within two years, as states attempted to make up for tobacco revenue that never appeared.<\/p><\/blockquote>\n Just like the Vikings stadium; they’ll be after us to fill in the shortfall.<\/p>\n Oh, yeah – and for all of Governor Messinger<\/del> Dayton has started coming out with budget proposals. \u00a0And along with some of those proposals (although, notably, not the one to repay part of the education budget “shift”) come some “mechanisms” to pay for them. \u00a0Gimmicks, if you will.<\/p>\nMessinger<\/del> Dayton intends to jack up the price of cigarettes by 94 cents a pack<\/a>.<\/p>\nMessinger’s<\/del> Dayton’s palaver about making the rich pay their “fair share”, it’s worth noting that the cigarette tax is the most regressive tax of all – according to that noted conservative tool, Governor Mark Messinger<\/del> Dayton<\/a>.<\/p>\n