Compromise State Budget Includes $2.00 Cigarette Tax Increase

Hoosiers who smoke, chew or dip will be paying more for cigarettes and other tobacco products under a final compromise on the state’s new two-year budget by the House and Senate.

At the same time, lawmakers protected school vouchers and promised income tax cuts.

The latest state budget forecast projects a $2.4 billion budget shortfall for the next two years.

The $2 per pack cigarette tax increase is expected to provide about $800 million over the next two years.

It’s the first hike in the state’s cigarette tax in 17 years.

The tax hike also impacts all other tobacco products.

While the goal exists to curb smoking as a side benefit, that could also put a dent in the projected revenue the new taxes are expected to generate.