N.H. may delay proposed 25 cent cigarette tax hike
CONCORD, N.H.—House budget writers proposed delaying a potential 25 cent cigarette tax hike Thursday to see if a pending tax hike in neighboring Massachusetts will drive smokers to New Hampshire despite high gas prices.
If New Hampshire doesn't get $50 million from cigarette sales between July 1 and Oct. 1, the state's $1.08 tax will go up a quarter.
The state's grocers and convenience stores had told the Finance Committee they could sell more packs without a tax hike. Massachusetts is considering raising its $1.51 per pack tax by $1. Massachusetts also has a 5 percent sales tax that New Hampshire retailers say makes New Hampshire price's more attractive.
Gov. John Lynch proposed the increase as part of his overall plan to deal with a possible $180 million revenue shortfall in the two-year state budget. He also proposed $125 million in spending cuts and wants to borrow $80 million to pay the state's share of school construction costs that currently is paid with cash.
The committee rejected the borrowing proposal, but accepted some cuts.
The committee also modified Lynch's proposal to cut a discount wine retailers get when they buy wine from the state. Lynch had proposed cutting the 20 percent discount in half, but the committee would exempt wine boutique shops. It also would leave the discount as is for retailers with beer and wine licenses who sell no more than $350,000 annually.
The judicial and legislative branches also would be asked to make cuts -- $2.6 million and $1.5 million respectively.
The full House next considers the budget changes. If the House approves them, the Senate then would consider them.
