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Home » News » News » How would banning flavored tobacco products impact Maine’s budget?
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How would banning flavored tobacco products impact Maine’s budget?

Nick MurrayBy Nick MurrayFebruary 11, 2021Updated:February 7, 2022No Comments6 Mins Read
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This week, the anti-tobacco organization “Flavors Hook Kids” held an online news conference for Maine media. During the event, leaders decried the availability of flavored cigarettes and other tobacco products, claiming their existence is oppressive, specifically to the Black, Indigenous, and LGBTQ communities.

“It would be difficult to name another widely available commercial product that has caused more deadly harm to African Americans than menthol cigarettes,” remarked Kaylin Kerina, a Portland resident, in the Monday news conference.

The campaign is urging Maine to join the ranks of just two other states, California and Massachusetts, in banning the sale of flavored tobacco products, including menthol cigarettes. They say that the sale of flavored tobacco amounts to the “appropriation” of Black and Indigenous culture. 

But, is the availability of menthol cigarettes a facet of society-wide, institutionalized racism? Those making these claims point to the history of slavery during the first 100 years after the founding of the United States, and the tobacco industry’s role in perpetuating slavery through plantation farming across the South. Of course, we must reckon with and condemn this history, but how does banning flavored tobacco products in 2022 help repair the multi-generational trauma of slavery?

This narrative comes out of Flavors Hook Kids’ parent organization, Tobacco Free California, an advocacy group run by the CA Department of Health, funded by $0.25 tax on packs of cigarettes sold in the state. They claim that “For too long, Big Tobacco has been strategically killing the Black community with menthol cigarettes.”

Advocates point to studies showing that menthol cigarettes are more popular among Black Americans than white Americans, as if this is the fault of slick advertising, not conscious, consumer behavior. Do adults in the Black community not have the same wherewithal to make decisions like anyone else?

This narrative is simply not supported by evidence; it is the exploitation of data on racial inequities as a means to implement misguided policy. Significantly fewer African-American youth smoke than their white or hispanic neighbors. According to the 2019 National Health Interview Survey, Black and white adults smoke at similar rates. Of course, in many areas of American life, racial disparities are real and present, but it is difficult to see this campaign as anything more than a solution in search of a problem.

Especially in difficult economic times, raising sin taxes might look like a good move for virtue-signaling politicians, but doing so only hurts the tobacco-addicted, no matter their race, because ever-expanding taxes and prohibitions do not lead to lower rates of smoking. Regional data has shown us that free adults adapt to state-by-state tobacco policy differences. 

Take the case of Massachusetts. In 2019, Governor Charlie Baker signed into law a bill that instituted a ban on all flavored tobacco products in the state and a new 75% tax on e-cigarettes. The state Department of Revenue projected that, even with the extra tax, the ban would still cost Massachusetts $93 million over the fiscal year. 

Since the ban went into effect in June 2020, Massachusetts has lost more than $10 million per month. The state is on pace to forgo more than $120 million in tobacco taxes over this fiscal year. After bringing in $557 million over the previous fiscal year, the state is on pace to forgo 20% of the tax revenue it expected from tobacco sales this year.

Did 20% of smokers and tobacco users quit once the tax was implemented? No, smoking didn’t disappear. Users just switched to a different, unflavored tobacco product, or they drove to New Hampshire and Rhode Island to find their preferred flavored product. 

The New England Convenience Store and Energy Marketers Association (NECSEMA) has been tracking the ban’s effect on the regional market. In a recent report, they note that between June and December, compared to the last six months of 2019, total cigarette sales in New Hampshire jumped 46%, menthol cigarette sales grew by 90% and sales of mint/wintergreen smokeless tobacco more than doubled. 

In Rhode Island, total cigarette sales increased 20%, menthols were up 29% and mint/wintergreen smokeless tobacco sales were up 59%. Cigarette sales in Massachusetts are down nearly 24%, as total convenience store sales fell 10%. In New Hampshire, those stores saw their overall sales nearly double, a clear sign that consumers are simply reacting to the recent policy changes, not changing their personal behavior. 

What could a similar ban mean for Maine if the nanny-staters get their way? New England is a small region, so no doubt our neighbor to the west would welcome it as yet another boon to their economy.  Why wouldn’t Maine experience a similar exodus as Massachusetts has? It strains reason to believe flavored tobacco enthusiasts, when faced with an outright ban, would simply give up their habit. Data show us this is not happening. When shelves are fully stocked just over the border, the money simply walks.

In Fiscal Year 2019, from July 2018 to June 2019, the state of Maine brought in $126 million in revenue from cigarette and tobacco taxes, 5.7% under state budgeters’ projections. The following fiscal year, the state made $137 million from tobacco sales, which was 9% more than the previous year but 3% lower than expected. Maine Revenue Service ascribed the increased growth over FY20 to the 2019 law that equalized taxes on other tobacco products (including e-cigarettes) to the 43% tax on cigarettes.

During the first half of this fiscal year, from July to December 2020, Maine took in nearly $80 million in cigarette & tobacco revenue. This would put the state on pace to bring in $160 million over the year, which would be a nearly 17% jump from FY20. But if we took the advice of West Coast activists, as Massachusetts has, those gains could go up in smoke.

Adults are adults, no matter their color, ethnicity, or background. We all possess the same inherent right to personal and economic liberty, the freedom to spend our paychecks the way we see fit. To use Black people as a fulcrum to launch an economically illiterate, prohibitionist campaign unintentionally robs this community of their agency.

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Nick Murray
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Nick Murray, a resident of Poland, currently serves as Director of Policy with Maine Policy Institute, developing MPI's policy research, analysis, and strategic advocacy priorities. He is the author of numerous articles and publications such as the 50-State Emergency Powers Scorecard, Long-Term Growth vs. Short-Term Gimmicks: Maine's Economy and Gov. Mills' Second Biennial Budget, Sticker Shock: Maine's Burdensome Vehicle Inspection Mandate, and COVID Catastrophe: the Consequences of Societal Shutdowns.

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