Legislature Kills Another Tobacco Tax Hike, Will It Go To The Ballot?

The state Senate killed another tobacco tax hike today.

This time it was SB2322, introduced by Senator Tim Mathern (D-Fargo). Like Rep. Jon Nelson’s bill in the House, which failed by a wide margin last week, Mathern’s bill also flopped. The vote was 17-30 against.

[mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#000000″ txt_color=”#ffffff”]The crusade by anti-tobacco zealots really is a sort of modern prohibitionism. But they learned their lesson from the prohibition of alcohol in another era. Rather than going for a blanket ban on the target of their jihad they instead seek to enact prohibition through a myriad of regulations and taxes which make tobacco harder to get.[/mks_pullquote]

Had Mathern’s bill passed it would have raised the per-pack tax on cigarettes to $2.00 per pack, a 354 percent increase, along with some significant tax increases for other tobacco products. But the Legislature hasn’t been keen on tobacco tax increases in past sessions, and that doesn’t seem to have changed in this one.

I thought the best point made during the floor debate came from Senator Kelly Armstrong (R-Dickinson) who referred to these tax hikes as “prohibition by price.”

He’s exactly right. The crusade by anti-tobacco zealots really is a sort of modern prohibitionism. But they learned their lesson from the prohibition of alcohol in another era. Rather than going for a blanket ban on the target of their jihad they instead seek to enact prohibition through a myriad of regulations and taxes which make tobacco harder to get.

But it’s still prohibitionism, and prohibitionism doesn’t work.

I’ve written several pieces here on SAB about the impact a tax increase on tobacco would likely have on smuggling in the state. Currently North Dakota sees very little smuggling, and what little there is sees tobacco leaving our low-tax state to other high-tax areas. But if we changed our policies and made North Dakota a high-tax state we’d create incentives for smugglers. Whether it’s casual smugglers – people driving to Indian reservations or lower-tax areas to buy smokes for personal use – or large-scale commercial smuggling by gangs and organized crime, it would create a problem.

Meaning that these bills, intended to solve tobacco use, would simply be trading one problem for another. Lawmakers rejected that fool’s bargain, and rightfully so.

The question is, will the tobacco zealots bring this issue to the statewide ballot? My guess is they probably will – they have very, very deep pockets – and they’ve been successful when they’ve gone to the ballot before.