In Michigan
5:12 pm
Tue August 11, 2009

Study shows cigarette tax increase would reduce revenue

LANSING, MI – A new study shows Michigan could begin to lose revenue from cigarette sales if the state increases the tax by 25 cents per pack.

The study was conducted by economists with Western Michigan University. They say if the state keeps raising the tobacco tax it will reach a tipping point where people will cross state lines to buy cheaper cigarettes.

Mark Griffin is with the Michigan Petroleum Association, which commissioned the study. He says the tax would hurt the gas stations and convenience stores he represents.

"They sell pop, they sell candy, they sell all those in-store items, that's what keeps us in business," he said. "Cigarettes - that's a legal product that's part of our revenue stream. And our concern is that this would diminish that revenue stream and probably cause some of them to have to make the decision to whether they'd stay in business."

Those who support a tobacco tax increase say every revenue stream should be considered when facing a $1.8 billion budget deficit.