Bloomberg reported that New Jersey Governor Chris Christie has come up with a way to get extra cash in case of a $1.06 billion state government shortfall: e-cigarette tax. The news agency said that Christie has plans to introduce a measure that would lean harder on smokers.
According to the Bloomberg, this move has highlighted the state governor's difficulty to be able to turn the current state of New Jersey's fiscal stability. The 51 year-old Republican has been trying to convince lawmakers from the Democratic Party to reduce its spending after his administration had overshot its revenue projections in the last three years.
Politics professor Peter Woolley at Fairleigh Dickinson University in Madison said, "As far as fiscal distress goes, we are veterans in this state, and we have either raised taxes or we have reneged on obligations to close a gap. Thirty-five million dollars in the scheme of things sounds like a lot, but really isn't."
According to Moody's Investors Service, the $1.06 billion shortfall ballooned thanks to the proposed $34.4 billion budget for the fiscal year beginning July 1st. With the $807 million deficit announced by Christie last week, it has prompted Moody's senior analyst Baye Larsen to call the move a "credit negative development."
Bloomberg said that New Jersey is the only state in the US that spends none of its own money to combat nicotine addiction in its jurisdiction. From the proposed measure, New Jersey would reportedly use the estimated $35 million in yearly revenue for state general spending. The news agency said that this is not the only proposal Christie has done that contributed a credit downgrade for its state general-obligation debt worth $2.4 billion In March, Christie has managed to arrange a deal on tobacco bonds.
Vice president for state issues Peter Fisher for Tobacco-Free Kids voiced his opinion on how money from e-cigarette tax should not go towards the state alone. In a telephone interview, he said, "E-cigarettes are being marketed just like tobacco products used to be. We would certainly support his proposal to tax e-cigarettes just like combustible ones, but we would strongly urge that the revenue be used for anti-smoking efforts."
