Kentucky’s Cigarette Tax Revenue Falling

• {Kentucky}...Kentucky’s cigarette tax revenue is falling, but state officials say it’s not a sign that smokers are kicking the habit. Kentucky state budget officials are predicting a 17.2 percent decline in revenue from the cigarette tax this fiscal year, which ends June 30th. Last fiscal year, the state collected $262.4 million from cigarette taxes, down nearly 6 percent from 2010. Richard Dobson, director of sales and excise taxes for Department of Revenue, says smokers have found alternatives by turning to roll-your-own cigarettes and little cigars that aren’t covered by the state’s 60-cent-a-pack tax. The little cigars, which look much like cigarettes but are wrapped in brown paper, cost about $1.25 a pack, compared to about $3.25 for the cheapest pack of cigarettes. The U.S. Department of Justice estimates that states have lost $5 billion a year because people are using alternatives that have no state retail cigarette tax.