Penny More Per Pack: Where Does The Money Go?

ST. PAUL, Minn. (WCCO) — Smokers may or may not notice it but they are now paying more for their cigarettes. A penny a pack, in fact. It’s part of an annual adjustment for inflation.

The penny increase brings the total of taxes and fees to about a $1.59 per pack of cigarettes. Here’s how it breaks down:

  • $0.48 excise tax
  • $0.75 health impact fee
  • $0.35.5 in-lieu tobacco settlement fee

Taxes and fees on tobacco products really add up in Minnesota, totaling $368 million for the state in 2010. Yet that pool of money is shrinking.

“Generally, we’re seeing a drop in revenues and I think it’s mainly related to less consumption. I think prices are kind of holding constant but we’re seeing less and less consumption,” said Jack Mansun with the Minnesota Department of Revenue.

The Centers for Disease Control’s latest survey shows smoking is definitely down in Minnesota, dropping from 22 percent to 16 percent in the past 10 years.

Revenues on tobacco leaped in 2006 with the new Health Impact Fee which was a 75-cent per pack charge on cigarettes. But then the decline in smokers is mirrored in a $50 million decrease in taxes and fees on sales. A penny tax increase per pack won’t move the revenue needle much.

Even if prices don’t cause a noticeable increase in costs, the manager of one shop says smokers will still be unhappy because they’re paying more than their fair share already.

That share put about $163 million into Minnesota’s general spending fund and $192 million into a Health Impact fee fund.

Minnesota’s first tobacco tax in 1947 was 3 cents per pack. Today’s $1.59 per pack is small compared to the $5.35 charged in New York City.

  • Mary Lehan

    To pay for vacations of others in the government. . You certainly will never see any of the money. It is called squandering.

    • Eric

      Do you have any source to site there? i am guessing your making it up. Can you show your evidence?

  • Obvious

    Smokers have never hurt anybody, stupid big gov’t taking more of everyones money for no reason! I’ve had enough!

  • Kevynn

    i think obamma shoud make smoaking illegal all together

  • lee

    Make them pay $10.00 for a pack.

    • markH

      Yeah, then they can charge $25 six pack tax on beer, 15% surcharge on cheeseburgers and fries….see what happens when Big Brother has your “best” interests at heart?

  • Jake

    I’ll tell you where it goes…. right down the toilet, and smokers get vilified all the way. If I had a dime for every 250 lb. PLUS person I’ve seen in the last year, I would be a VERY RICH MAN right now.

    • Jeepneasy

      Taxing food at 47% would fix that!

  • Jeepneasy

    Hey Dennis,
    How about giving ALL of the CORRECT info for a change.
    Nice job to leave out the Fed Tax, which brings the TOTAL tax Minnesotans pay to $2.60 per $5.50 pack of cigarettes. The highest tax any Minnesotan pays for anything. 47%.
    Hmmm, what if we taxed everything at this rate?

  • Jake

    I’ll tell you where it ain’t goin’. It isn’t going to smokers who suffer from the effects of smoking for decades, who deserve humane treatment and a humane death, instead of being vilified as some kind of enemy of America, even if they have led a law-abiding life, paid taxes every year, and didn’t beg their favorite politician for another handout that they didn’t deserve. Hell, even the dopers get treated better than smokers.

  • In The Middle

    Yeah if you don’t smoke fine but you ALL are losing your rights and paying more for less of them. This is not the same America I grew up with, only changes for the worse.

  • Archie

    Mr. Douda has been having a “love in” with the anti smoking cartel since he came to minneapolis, Dennis likes to be a stenographer that parrotts statistics.

    Mr Douda and enablers can not face the fact that the minnesota smoking rate has bees at 24-25% for the last fifteen years, The loss of revenue is not from people quitting but from Insulted tobacco consumers that have stopped buying Minnesota mafia “Fixed priced ” tobacco.

    The Dangerous and slippery slope created by public funded anti smoking non profits and a dysfunctional enabling democrat legislature have created a situation where a Bullying and un representative government will go TAX WILDING on any “target they choose.”

    On 07 2007 the legislative auditor warned Minnesotans , the legislature ,and the media that a dysfunctional legislature had allocated ONE BILLION DOLLARS of public funds to non profits. with very little or no legislative oversight, Mr Nobles said many of the grants were “designer grants” from the legislature to Guess who ?
    How many people ever heard the auditors report in the Minnesota media ? or heard it discussed on the house floor, How many legialators and public funded non profits benifitted at the expense of a bulging Minnesota deficit?

  • Archie

    57 sixpacks of beer
    87 bottles of wine need to be sold to equal the taxes on ONE carton of cigarettes.

    Not That i want a tax mafia to jump on other “sin taxes” to satisfy their addiction to The “Easy Button Taxation” maybe AARP and people that do not enjoy the freedom to indulge simply love sintaxes gasoline taxes and anytax that can be loaded on to productive Americans that were under the impression that they live in a free nation.. Huge dependentant on government allocations directly to them, lobbies see working and living people as a cash cow. Now I shall SU

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