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Smoke Clears To Show The Ugly Truth

It didn't take long for the truth to emerge on House Speaker William O'Brien's nonsensical insistence on a 10-cent-a-pack cigarette tax cut.

It was a giveaway to big tobacco, plain and simple.

The minute the tax cut went into effect, the tobacco companies raised their prices.

The millions of dollars in tax revenue that could have helped the state during these troubled times was literally given to the tobacco companies by O'Brien and his minions.

As the House and Senate wrestled with painful cuts to our state's hospitals, universities, schools and its neediest and most vulnerable citizens, O'Brien stopped negotiations and said nothing would happen without a 10-cent-per-pack tax cut on cigarettes, arguing it would bring jobs and business to the state. Republican state Sen. Chuck Morse, the Finance Committee chairman, accused O'Brien of holding the budget hostage. "I want to make it perfectly clear the Senate is totally offended by the actions of leadership in the House," Morse said, according to a June 16 article in the Concord Monitor.

But O'Brien got his way and the cigarette tax cut became law. "This tax cut is an important step to regain our advantage and bring business here to New Hampshire," O'Brien said. "We strongly believe that reducing this tax will result in more revenue, more economic growth and more tax cuts."

Who knew the New Hampshire advantage was cheap smokes?

O'Brien's logic was tortured at best. New Hampshire, at $1.78, already had the lowest cigarette tax rate by far. Maine's tobacco tax is $2 a pack, Massachusetts $2.51 and Vermont is $2.61 a pack. It was hard to see what difference lowering it to $1.68 would make.

Let's put aside the moral considerations of boosting our economy by attempting to increase sales of a deadly product. Simply looking at the dollars, it made no sense.

At a time when the state was desperate for revenues, slashing $250 million from hospitals and $49 million from the University System of New Hampshire, this tax cut essentially gave away between $12 million and $16 million on the spurious notion that the state would come out ahead through increased volume and sales of other related convenience store products such as lottery tickets and slushies.

What was really going on here?

The group Granite State Progress said that, immediately before taking the budget hostage, O'Brien traveled to Washington to meet with The Heritage Foundation, a conservative think tank that receives funding from tobacco company Altra/Phillip Morris.

"Speaker O'Brien returned from his meetings with a big tobacco-funded special interest group and immediately fought tooth and nail for a decrease in the tobacco tax," said Zandra Rice Hawkins, Granite State Progress director.

Sen. Jack Barnes, in a speech on the floor of the Senate, also reportedly said big tobacco had pushed the Legislature hard. "In all my few years up here, I've never seen an industry twist and push our Legislature the way the tobacco industry pushed," Barnes reportedly said. "The robo-calls that came in, calls I got the poor people were coughing and hacking, begging me to vote for the cigarette tax reduction. I do object to an industry pushing the way they did to get this 10 cents reduction."

And now that O'Brien has given the badly needed tax revenues to the tobacco companies, the grocers and the "coughing and hacking" masses are shocked.

At Cabot Street Market in Portsmouth, the cost of a pack of smokes went down for three days following the tax cut, then went right back up as the tobacco wholesalers raised their prices. "Because we did go down in price, there have been questions about why we went up again," said Fred Heick, a store clerk. Heick can feel comfortable telling his customers the prices went up again because O'Brien, a Robin Hood in reverse, took from the poor, the disabled, the sick and those seeking a higher education and gave their money to the tobacco companies.

We certainly hope voters remember this in November 2012.