New Jersey Governor Chris Christie, seeking cash in the face of a $1.06 billion shortfall, proposes leaning harder on smokers with a tax on electronic cigarettes.

The only U.S. state that spends none of its own money to combat nicotine addiction, New Jersey would use the estimated $35 million in annual revenue for general spending. Christie s plan follows a deal on tobacco bonds in March that contributed to a credit downgrade for $2.4 billion in state general obligation debt.

The proposed tax highlights Christie s struggle to return the state to fiscal stability. The 51 year old Republican is trying to persuade Democratic lawmakers to trim spending after his administration overestimated revenue projections for three straight years.

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, said Peter Woolley, a politics professor at Fairleigh Dickinson University in Madison. Thirty five million dollars in the scheme of things sounds like a lot, but really isn t.

Christie has proposed a record $34.4 billion budget for the year that begins July 1 even as the current spending plan is endangered. An $807 million gap he disclosed last week brings the shortfall to $1.06 billion, according to Moody s Investors Service.

Moody s called that a credit negative development in a report by Baye Larsen, a senior analyst.

Lowest Ratings

Fitch Ratings downgraded the state to A on May 1. The firm s bestowal of the fifth highest investment grade follows a similar move April 9 by Standard & Poor s and leaves New Jersey s rating higher than only California and Illinois among U.S. states.

S&P last month cited over optimistic projections and one time infusions, such as a March 7 deal to raise $96 million by pledging five years of tobacco settlement revenue to investors. Richard Larkin, director of credit analysis at Fairfield, Connecticut investment firm Herbert J. Sims & Co. termed it fiscal chicanery in an April 11 note to investors.

Chris Santarelli, a spokesman for state Treasurer Andrew Sidamon Eristoff, called the maneuver a responsible step that represented present value savings of $136.7 million and nominal debt service savings of $1.23 billion.

Pointing Fingers

Christie has said New Jersey is paying for poor management by past administrations from both parties. His attempts to ignite the economy haven t succeeded, though, and New Jersey lags behind its neighbors and the U.S. on job creation and revenue growth.

From the second quarter of 2009 through the end of 2013, New Jersey ranked 38th in economic health, according to the Bloomberg Economic Evaluation of States.

The first year Christie eliminated spending on educating people about tobacco use was 2013. New Hampshire, North Carolina and Ohio also had zero expenditures that year. By 2014, New Jersey was the sole state without funding, according to the Campaign for Tobacco Free Kids, a Washington based nonprofit group supported in part by the Bloomberg Initiative to Reduce Tobacco Use, founded by Michael Bloomberg, founder and majority owner of Bloomberg News parent Bloomberg LP.

Christie is positioning New Jersey for a second time to spend nothing of its own on cessation. Such expenditures have risen nationally for three years.

Medical Care

New Jersey is to reap an estimated $947.2 million this year from tobacco sales and the 1998 settlement of health care expenses for 46 U.S. states from cigarette companies. The Atlanta based Centers for Disease Control and Prevention, the nation s health protection agency, recommends that New Jersey spend $103.3 million in state money annually to combat tobacco, the 10th largest sum nationally.

It s not like we don t pay for these people, said Jill Williams, a physician and director of addiction psychiatry at Robert Wood Johnson Medical School in New Brunswick. We pay for their heart attacks and strokes and cancer treatment. Why not invest in their tobacco cessation?

Cigarette smoking is the cause of 480,000 annual U.S. deaths, about one in five, according to the CDC. More than 10,000 New Jerseyans die every year of tobacco related illness.

No state came up with its full share of CDC recommended funding on its own in 2014, according to the Campaign for Tobacco Free Kids. Such funding was part of the intent, though not a requirement, of the settlement with cigarette makers.

Health Pitch

At peak in 2003, New Jersey spent $30 million on efforts including counseling and nicotine replacement therapy. It now spends about $1.6 million in federal grants annually, according to Donna Leusner, a health department spokeswoman.

Sidamon Eristoff told the Senate budget committee that the motivation for the proposed tax on vapor cigarettes was public health.

The New Jersey Legislature has already joined Congress in treating e cigarettes as equivalent to conventional ones for purposes such as restricting sales to minors and smoke free air laws, the treasurer said April 1.

Tax parity is the logical next step, he said. Why should we favor one form of delivering highly addictive, tobacco derived nicotine over another, especially in light of the unknown health risks and the obvious marketing focus on youth and young adults?

Peter Fisher, vice president for state issues for Tobacco Free Kids, said higher prices can do only so much.

E cigarettes are being marketed just like tobacco products used to be, he said in a telephone interview. 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.

To contact the reporter on this story Elise Young in Trenton at eyoung30

To contact the editors responsible for this story Stephen Merelman at smerelman Stacie Sherman

Bbc news – government to move ahead with standardised cigarette packets

Bbc news e-cigarette users in uk have ‘tripled’ since 2010

She denied the government was dragging its heels, saying the final legislation had to be “robust” and part of broader efforts to combat smoking and all “stakeholders” had to have their say.

But she said the government’s intention was “clear” and she promised changes before the next election in May 2015, although MPs would be given a vote on the proposals before they came into force.

A succession of Conservative backbenchers attacked the plan, saying it was an example of the “nanny state” and that there were enough warnings about the dangers of smoking already.

Robert Halfon, who successfully campaigned for a cut in bingo tax, said “Conservatives believe in freedom and the best way to stop people smoking is through education and not by banning things.”

Print workers

He said there would be a “huge impact on small shops and small businesses” if standardised packaging went ahead.

Jacob Rees Mogg said Sir Cyril’s report had found it was too early to draw any any firm conclusions from the Australian legislation and said the findings were “indirect and speculative”.

“As the government may be taking away a freedom from the British people oughtn’t it to be more certain of its ground?” he asked.

Dame Angela Watkinson said “Nobody in this country smokes in ignorance and people who do so do it as a deliberate choice.”

Public health minister Jane Ellison said MPs would get a vote on the issue Conservative MP Sir Paul Beresford backed a ban

Labour MP Diana Johnson said Dame Angela had accepted a gift from Japan Tobacco, makers of Benson and Hedges cigarettes. The register of members’ interests shows the Hornchurch MP accepted hospitality and two tickets to last year’s Chelsea Flower show, worth 1,260.

Conservative MP Sir Paul Beresford, a dentist, backed the ban, telling those protesting against it “If I could arrange for them to come into an operating theatre to see the damage that oral cancer does to people they might actually change their mind.”

Most Labour MPs who spoke supported legislation but Bradford South MP Gerry Sutcliffe warned about the impact on print workers in his constituency if branding was removed from cigarette packets.

The British Medical Association welcomed the minister’s statement but said there should be no further delays to legislation.

Dr Ram Moorthy, deputy chair of the BMA’s Board of Science, said “As doctors we see first hand every day the devastating effects of tobacco addiction and we call on the government to make a decision quickly and to introduce standardised packaging at the earliest possible opportunity in order to help put an end to a life long addiction that kills and destroys health.”

A Welsh Government spokesperson said “The Welsh Government has long been a proponent of standardised packaging of tobacco products and we recognise that has the potential to be an important tool in our bid to reduce the harm from tobacco related illness.

“We are therefore delighted with today’s announcement that the UK government will go ahead with standardised packaging. This will also apply to Wales, following a short consultation on draft regulations.”