How effective is a state-approved ban if its neighbors don't follow suit?
Not very, if at all.
This appears to be the case with Massachusetts' first statewide ban on the sale of menthol-flavored tobacco products.
When tax levies are signs, menthol smokers have not only quit, but jumped across the borders into New Hampshire, Rhode Island, New York, and other states to pacify their habit, and have other convenience store-related businesses taken away.
This comes from a new report from the New England Convenience Store and Energy Marketers Association (NECSEMA).
That group, which opposed legislation that included a 75% excise duty on vaping products, said the menthol ban cost Massachusetts more than $ 62 million in lost tax revenue.
Meanwhile, New Hampshire has received more than $ 28 million in tobacco excise taxes since the ban went into effect June 1.
According to the New Hampshire Department of Revenue Administration, tobacco taxes have been $ 25.4 million since July 1.
Overall, New Hampshire cigarette sales rose 46% while Massachusetts fell nearly 24%.
Jon Shaer, managing director of NECSEMA, noted that the ban costs small businesses more than just cigarette money. Hardest hit, he says, are the larger minority gateway communities, where menthol cigarettes are more popular.
Our state lawmakers were poised to absorb an economic blow if the ban reduced demand for menthol cigarettes, but it doesn't seem to have happened.
By now, this trend should come as no surprise.
Back in December, Ulrik Boesen, senior analyst at the Tax Foundation, said in an editorial meeting of InsideSources' Boston Herald columnist Michael Graham that the government's 2019 ban on flavored vape products and menthol cigarettes last June had led to a decline in government revenue, but no corresponding decline in smoking.
According to Boesen, Massachusetts raised approximately $ 550 million in excise tax revenue on cigarettes in fiscal 2019, and lawmakers are forecasting a loss of $ 93 million in fiscal 2021 revenue due to the flavored tobacco ban.
"If all these people had quit right away, I would assume that lawmakers would see this as a gain," said Boesen. In reality, according to Boesen, what has happened is that consumers have crossed national borders to make their tobacco purchases.
He presented statistics showing that sales in Massachusetts were down 17% year over year in June 2020. During that time, sales in Rhode Island and New Hampshire grew 56%, Maine 31%, Vermont 21%, and New York 17%.
A New Hampshire think tank went so far in July that granite state companies recently avoided tax hikes, thanks in part to "Massachusetts cigarette smokers and flavored tobacco hunters."
If revenue from general funds and education funds had fallen at least 6% below New Hampshire estimates in fiscal 2020, it would have triggered automatic business tax increases, said the Josiah Bartlett Center for Public Policy.
However, due to tobacco tax revenues that are 7.3% above estimates and 6.9% higher than last year, tax revenues appear to be only 5.4% below estimates, the center said.
"If these numbers are correct, entrepreneurs could appropriately thank Massachusetts smokers and lawmakers for helping prevent these automatic tax hikes," the center's report said.
Obviously, falling tobacco sales and tax revenues in Massachusetts, and corresponding opposing results in related states, cannot accurately gauge the effectiveness of our state's menthol tobacco ban, but it is a fairly reliable barometer.
Government-mandated lifestyle changes – even those with proven health benefits – often don't work if they can be easily circumvented.
It didn't work with a statewide ban on the manufacture and consumption of alcohol, and a century later Massachusetts achieved the same result on a far smaller scale.