NJ Considers a Cigarette Ban But Worried About Losing Tax Revenue

As New Jersey lawmakers and the federal government consider an outright ban on the sale of menthol cigarettes, some groups and researchers suggest that the move would result in more financial pain than physical gain.

But anti-smoking advocates say money shouldn't be a focus in the debate.

Study promotes additional taxes over menthol ban

New research out of the University of Washington — in response to some states, counties, and towns implementing their own menthol cigarette bans — claims that a higher menthol tax is a preferable policy to scattered bans.

The study looked at spending patterns in and around Massachusetts, which implemented a statewide ban in 2020. Stores in the state lost sales following the ban, while cigarette sales in nearby out-of-state locations shot up significantly.

According to researchers, state-specific bans decrease menthol consumption by 46% and overall cigarette consumption by nearly 5%, but also decrease tax revenues by more than 20%.

An added tax on menthol products of $6 per tax, according to the study, would increase tax revenue by 14%, decrease menthol cigarette consumption by 28%, and decrease overall cigarette consumption by 2.7%.

But which numbers matter more?

"Increasing taxes doesn't resolve the underlying health problem," said Karen Blumenfeld, executive director of Global Advisors on Smokefree Policy, based in Summit. "It's not sound public health policy."

Blumenfeld said increasing a tax on a product, rather than banning it due to its health effects, sends mixed messaging to the public.

NJ's smoking rules and statistics

State data, Blumenfeld said, show that 11% of adults smoke, and 71% of them want to quit.

New Jersey implemented a ban on all flavored vaping products in 2020.

State lawmakers advanced a measure in June 2023 to prohibit the sale of menthol cigarettes. It has not seen any action since.

New Jersey's $2.70 tax per pack is currently the 13th highest in the nation, according to the Tax Foundation. The nonprofit notes that New Jersey would lose hundreds of millions of dollars per year by banning the sale of menthol cigarettes.

But border shopping may not be a factor in the debate if the nation as a whole does away with menthol.

In spring 2022, the U.S. Food & Drug Administration announced a proposal to include menthol as one of the prohibited flavors of cigarettes, noting that the move could reduce disease and death, as well as youth experimentation with tobacco. Earlier this month, CNN reports, the FDA took another step forward in the process by sending its rules to the White House Office of Management and Budget for review.

Menthol cigarettes account for more than a third of the cigarettes sold in the U.S. Experts claim that they are more dangerous than traditional cigarettes because menthol creates a cooling sensation that helps to mask the tobacco flavor, allowing the user to inhale more smoke per puff.