Maine Governor Janet Mills Proposes Tobacco Tax Increase for Budget Balance

Jan.13.2025

Maine Governor Janet Mills proposes raising tobacco taxes to balance budget, citing low cigarette tax and high smoking rates.

According to a report by Halfwheel on January 12, Governor Janet Mills of Maine has released her two-year budget proposal, suggesting increases to tobacco taxes to achieve a balanced budget.

Mills pointed out that Maine's cigarette tax has not been adjusted since 2005 and currently stands at just $2 per pack. She proposed raising it to $3 per pack. The governor stated that currently, Maine has the lowest cigarette tax in the New England region, while the smoking rates among adults and teenagers are the first and second highest, respectively. These are the reasons she is pushing for a tax increase.

According to state law, if the cigarette tax is adjusted, the tax rate for other tobacco products must also be increased accordingly. The tax rate for cigars will be raised from 43% of the wholesale selling price to 65%. This new tax rate will also apply to chewing tobacco, e-cigarettes, and other products made from or containing natural or artificial nicotine.

According to supporting documents for the Miller proposal, it is estimated that raising tobacco taxes will generate an additional revenue of approximately $80 million for the state general fund over the next two years.

If the proposal is passed according to the current plan, the tax rate adjustment will take effect on January 5, 2026.

References:

[1] Maine's Governor Calls for 50 Percent Increase in Cigar & Tobacco Taxes

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