A New Hampshire Senate committee is holding a hearing today on Governor John Lynch’s proposal to raise the cigarette tax 25 cents a pack, among other budget measures.
The measure is part of Lynch’s overall plan to deal with a projected $225 million revenue shortfall in the two-year state budget. He would cut spending $125 million, raise revenues $40 million and borrow $80 million to pay the state’s share of school construction costs that currently is paid with cash.
The cigarette tax increase would raise $22 million toward the hole. Lynch said Massachusetts and Maine are considering raising their tax rates, which will make New Hampshire’s prices attractive even with a hike in its tax. The current tax is $1.08 per pack.