Florida Governor Charlie Crist and members of the legislature have been weighing an increase in the cigarette tax to cover up the state’s $2.14 billion overspending problem. While initial reports put the tax hike at 50-cents per pack, the number is subject to change. Additionally, proponents of the tax hike have falsely been labeling it as a "user fee" to court votes in the Florida legislature.
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Dear Governor Crist and Members of the Florida Legislature,
As Florida faces serious budgetary challenges, it is critical now more than ever to oppose attempts to increase taxes. In the face of a slowing economy, tax hikes will hit hardworking Florida families and consumers the hardest and further diminish the state’s economic growth.
A recent proposal under consideration calls for a 50-cent hike in Florida’s cigarette tax. Too often, policymakers attempt to disguise excise tax increases as “user fees”. This is another example of such disingenuousness. An income tax is not a user fee on your job. A sales tax is not a user fee on purchasing products. The same holds true for an excise tax on tobacco – a tax increase is a tax increase no matter what you call it.
Additionally, evidence from other states proves that this tax hike will do little to address the state’s current $2.14 billion overspending problem. After New Jersey raised the cigarette tax just 17.5 cents in 2007, the state lost $24 million in tobacco tax revenue from consumers who sought cheaper products across state lines or from other venders.
Florida’s nearby states have an average cigarette tax of just 33-cents per pack. If this proposed tax hike passes, Floridians will have to pay 84-cents per pack, nearly triple that of their neighbors. In a similar situation, Maryland raised the tobacco tax last year to cover a budget projection shortfall. However, the problem was only exacerbated when sales fell 25% after consumers drove to nearby states with lower tax rates.
Florida’s budgetary problems have been caused by a slowing economy combined with unsustainably high government spending. During the recent economic boom, states found it easy to spend taxpayer dollars. In fact, Florida has increased spending by approximately $10 billion since 2002. However, that revenue is now gone and Florida has overspent by $2.14 billion this fiscal year. Out-of-control spending caused this problem and tax increases are not the solution.
It is critical to revitalize the Florida economy with tax cuts, not tax increases. We must lift the burden of larger government from the backs of hardworking taxpayers and consumers instead of furthering depressing economic activity. As you continue to weigh options to rectify the state’s overspending problem, I urge you to stand up for taxpayers and oppose all tax increases. If you have any questions, please contact Kelly Cobb or Nathan Pick, state affairs managers, at (202) 785-0266.