TOPEKA – The free-market grassroots group Americans for Prosperity-Kansas today released a study on the effects of cigarette taxes on the state’s economy.

The study “Masters of Tax Avoidance: Kansans and The Cigarette Excise, 1927-2009” by Patrick Fleenor, chief economist of Fiscal Economics, Inc., outlines the history of Kansas cigarette taxes and the results on the state economy.

“This study clearly shows that raising cigarette taxes simply drives Kansas consumers to other states to purchase tobacco products,” said AFP-Kansas state director Derrick Sontag. “It clearly results in lower cigarette tax revenues, not because more people are quitting, but because people go elsewhere to avoid paying those higher per-pack taxes.”

In 2002, Gov. Bill Graves proposed solving a large budget shortfall with a 65-cent increase in cigarette taxes. After a legislative deadlock with lawmakers, a compromise 55-cent tax increase was passed. Fiscal forecasters had predicted an initial drop in cigarette sales that would rebound the following year, but those projections were too optimistic. In fact, sales taxes dropped by more than 20 percent in fiscal year 2003, and continued to fall another 5 percent in fiscal year 2004.

“It’s obvious that raising cigarette taxes to help fund state programs has not provided the desired revenue stream to pay for these programs,” said Sontag. “This isn’t new information – cigarette taxes have led to numerous unintended economic consequences since they were first imposed in Kansas in 1927.

"However, despite what history has shown us, our Governor and legislators are still talking about cigarette tax hikes.

“We hope this document will show to lawmakers that raising cigarette taxes is an ineffective deterrent to smoking and that it is simply unwise to fund government programs with revenue that is likely to dwindle once the new tax takes effect.”