Tobacco Tax Cut Likely to Lose Millions in Revenue, Leave FY12-13 Budget Out of Balance

House and Senate lawmakers agreed to reduce the state’s cigarette tax by 10 cents per pack and lower taxes on other tobacco products as part of the two-year budget starting July 1. Based on the latest data available from state revenue officials, this is likely to reduce tax revenue by at least $14 million to $30 million. It now appears that budget negotiators failed to account for any such revenue loss, meaning that the budget for the coming biennium will likely end up out of balance.

Testimony on CACR 6 and Supermajority Requirements for Tax Increases

NHFPI Executive Director Jeff McLynch testified on May 11 before the Senate Internal Affairs Committee on a proposal to amend the state’s constitution to require a three-fifths supermajority vote of in the House and Senate to pass any tax or fee increase.

“In brief, CACR 6 would undermine sound fiscal policy. It would unduly constrain the flexibility New Hampshire needs to respond to changing economic circumstances and would likely lead to a great reliance upon temporary solutions to future budget shortfalls, more frequent legislative stalemates and higher borrowing costs,” he said.

Business Taxes in New Hampshire: Where Do They Stand? How Much Do They Matter?

Some of the current proposals to reduce business taxes ignore facts about N.H.’s tax structure and, more generally, about the impact taxes have on economic activity. Here’s an overview to help put things in perspective.