NJ Fiscal Folly

Wednesday, March 22, 2006

Up In Smoke

According to pages 47 and 55 of the Corzine budget, raising the cigarette tax to $2.75 per pack will generate an additional $80 million in revenues.

According to the revenue schedule on page 104, total cigarette taxes will decrease from $640 million in FY 2006 to $491 million in FY 2007.

Maybe they should lower the tax instead.

Update: Great minds think alike. Enlighten New Jersey has a similar post on this topic.

Update: An explanation has emerged. Back in FY 2005, the state sold $2.5 billion in bonds to "balance" the budget. The bonds were backed in part by future cigarette taxes. The FY 2007 budget includes the first bond payments of $211 million, which reduce total cigarette tax revenues.

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