As part of a plan to help remedy a projected $900 million shortfall in the state’s budget over the next 18 months, Kansas Gov. Sam Brownback is proposing a doubling of the state’s taxes on tobacco products, which includes premium cigars.
Brownback announced the plan on Wednesday, part of a number of tax increase proposals that includes a $1.29 per pack increase on cigarettes as well as a doubling of the state’s liquor tax from 8 to 16 percent.
Currently, Kansas taxes cigars and other tobacco products at 10%, but Brownback would like to see that go to 20%. For a cigar with a $9.50 suggested retail price, a consumer would see the cost at the register go from $10.45 to $11.40 by halfwheel estimates, before any sales taxes are added.
Additionally, the governor proposed selling future proceeds from the Master Settlement Agreement, an agreement between 46, five U.S. territories, the District of Columbia and the five largest tobacco companies.
The Kansas Legislature will now take up the task of drawing up its own budget and responding to the governor’s proposed tax increases and spending cuts.