State flag of Massachusetts, where a ban on flavored tobacco and vaping products is proving to be ... [+]
Just because a policy has already been documented to be a proven failure doesn’t mean politicians will cease proposing it. Maryland, Washington, Connecticut and a handful of other states are considering bills to ban flavored tobacco and vaping products, even though this same prohibition has backfired elsewhere.
Early results from the flavored tobacco & vaping products prohibition enacted in Massachusetts show such bans deprive adults of less harmful alternatives to cigarettes, crush small businesses, depress tax collections as commerce shifts across state lines, and fail to curb smoking.
Massachusetts Governor Charlie Baker (R) and his Democratic-run state legislature enacted a ban on flavored e-liquids and tobacco products, including menthol cigarettes, that has been in place since June 1, 2020. There is no indication that smoking has been mitigated, but there is evidence that Massachusetts has lost millions in tax revenue to neighboring states, as consumers have taken their business to stores in New Hampshire and Rhode Island, where the flavored tobacco products demanded by many law-abiding adults are still available for sale.
The numbers are in and tax collection data since the time the Bay State’s flavor ban took effect show that while Massachusetts experienced an expected decline in the sale of taxable tobacco products, often referred to as “stamps,” those sales appear to merely have been pushed across state lines, particularly to New Hampshire and Rhode Island. Though tobacco sales were down in Massachusetts for the second half of 2020 compared to the second half of 2019, that drop is more than accounted for by the marked jump in tobacco sales in states bordering Massachusetts.
“From June 1, 2020 to September 30, 2020, 230,797,000 stamps were sold in the region,” writes Ulrik Boesen, an economist at the non-partisan Tax Foundation. “For the same period in 2019, that number was 225,897,000…In other words, Massachusetts sales plummeted, but not because people quit smoking—only because those sales went elsewhere.”
Massachusetts Ban Causes Cigarette Sales To Increase In Neighboring States
“If we look at individual states, we can see that increases are skewed,” Boesen adds. “The increase in sales in the Northeast region is most notable in Rhode Island and New Hampshire, but all have seen increased sales immediately following the ban.”
"With every month that passes, the state's ban on flavored tobacco becomes increasingly absurd," Jonathan Shaer, executive director of the New England Convenience Stores & Energy Marketers Association, said of the Massachusetts flavor ban. "All anyone needs to do is look at the excise tax stamp numbers from June through November to understand how ineffective and ridiculous this ban is. Rhode Island and New Hampshire have combined to sell 18.9 million more stamps than they did over the same period in 2019 while Massachusetts has sold 17.7 million fewer.”
The Tax Foundation’s Boesen estimates that for Massachusetts state coffers, “the cost of the flavor ban could end up being approximately $120 million for FY 2021 (not including sales tax losses).” That is a real self-inflicted wound to state coffers, but the reduction in sales the flavor ban precipitates for mom and pop retailers, particularly those located near the state border, causes tremendous hardship for individual small businesses.
“10 years of hard work gone in like five minutes since the ban started,” Bahrem Agha, owner VaporZone in Saugus, Massachusetts, said after the initial vape ban was imposed by Governor Baker through emergency order in 2019.
The Massachusetts experience with a flavored tobacco and vaping products ban will be instructive for millions of Californians who will vote in 2022 on whether or not they would like to proceed with imposition of the flavored tobacco and vaping products prohibition that has already been approved by the California Legislature and was signed into law by Governor Gavin Newsom (D) in August of 2020, nearly three months after the Massachusetts flavored tobacco and e-liquids ban took effect. It was confirmed by the California Secretary of State on January 22 that more than 623,000 valid signatures were submitted for a petition to hold a veto referendum on Senate Bill 793, the flavored products ban bill, which qualifies it for the November 2022 ballot.
“This measure is the 50th veto referendum in California since that process was adopted in 1911,” according to Ballotpedia. “Of the previous 49 veto referendums, voters upheld 20 (41%) of the laws and repealed 29 (59%).”
Before Californians weigh in on whether or not to proceed with flavored tobacco and e-liquids prohibition enacted by Governor Newsom, lawmakers in a number of other states will decide whether or not to install their own flavored tobacco and e-liquids ban. Right now Maryland lawmakers are considering Senate Bill 177, legislation that would impose such a ban. Flavored tobacco or e-liquids ban bills have been introduced in other state capitals this year, including Connecticut, Kansas, and Washington State. Don’t be surprised if more are introduced before legislative filing deadlines close.
If Maryland lawmakers and legislators elsewhere learn lessons from Massachusetts and heed the advice of non-partisan public finance experts, they’ll reject the pending prohibitions. As Massachusetts’ experience with a flavored tobacco and e-liquids ban has illustrated, such prohibitions have proven to be, as the Tax Foundation’s Boesen described it, “a public health measure that merely sends tax revenue to its neighboring states without improving public health.”
