Near the close of their conference committee deliberations last week, negotiators from the House of Representatives and the Senate added provisions to the fiscal year 2012-2013 budget that, effective July 1, will both drop New Hampshire's cigarette tax rate from $1.78 per pack to $1.68 per pack and lower taxes on other tobacco products. As NHFPI's latest Issue Brief notes, based on the latest data available from the Department of Revenue Administration, those provisions will likely reduce tax revenue by at least $14 million over the biennium and perhaps by as much as $30 million. However, it now appears that House and Senate negotiators failed to account for any such revenue loss in completing the conference committee's version of the FY 12-13 budget, meaning that the budget for the coming biennium will likely end up out of balance. Consequently, to offset any revenue lost to a cigarette tax cut, the House and the Senate may have to add to the hundreds of millions of dollars in spending cuts that they have already imposed, further undermining critical investments in education and public infrastructure and weakening protections for the state's most vulnerable citizens.
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