While many New Yorkers are enjoying the holidays, members of the Hochul Administration are busying themselves for the upcoming session. The first week of January is when lawmakers return for the beginning of the 2026 legislative session. The following week, Governor Hochul will release her “State of the State” address and the week after that, she will release her executive budget.
The State of the State is an annual message delivered by the governor as required under the state Constitution. It leans to the poetry of governing, long on goals, short on the details of achieving them.
It is really the budget that provides the governor’s blueprint for how she will achieve her goals.
So, a lot is happening right now to develop the massive state budget and fashion it to meet the outcomes that the governor will propose in her annual message.
Next year’s budget plan is being developed under the large shadow cast by the changes enacted by the President and the Congress. The state will have to figure out, for example, how to provide health coverage for the tens of thousands of New Yorkers who are facing a complete loss of coverage or huge increases in the costs of providing that coverage. The Trump Administration and its allies in Congress are doing all that they can to reduce Americans’ access to health insurance, a decision that will result in misery and physical harm to millions of Americans.
Proposals that can raise revenues, therefore, will get a closer look as the state budget makers try to address shortfalls resulting from Congressional action.
One idea that has been considered over the years pertains to the use of and addiction resulting from tobacco and other nicotine products.
We all know the score on that front. Tobacco products, when used as directed, addict and kill. Lung cancer is most often caused by tobacco use. But lung cancer is not the only cancer that can be caused by tobacco use. According to the U.S. Centers for Disease Control and Prevention (CDC), tobacco use results in cancers of the mouth and throat, voice box, esophagus, stomach, kidney, pancreas, liver, bladder, cervix, colon and rectum, and a type of leukemia. And tobacco users aren’t the only ones at risk; exposure to tobacco smoke by those who are non-smokers raises their risk of cancer.
While past actions taken by New York (and much of the rest of the nation) have dramatically reduced the cigarette smoking rate, flavored products, new forms of nicotine use, and the use of other non-cigarette tobacco products are still dangerous.
Flavored tobacco products are designed to entice youth to a deadly addiction. It is still legal to sell menthol-flavored cigarettes and other flavored tobacco products. While New York now prohibits the sale of flavored vaping products, it has not banned the sale of flavored tobacco. Experts that evaluate the state’s tobacco program have urged a ban on the sale of these flavored tobacco products.
New York policy fails in a key area of the fight to combat nicotine addiction: tax policy. And it is this area that budget makers may be looking at.
New York State currently has the highest cigarette tax in the nation, at $5.35 per pack. There is irrefutable evidence that increasing the cost of cigarettes has been a key component in the state’s tobacco control success.
Yet New York taxes non-cigarette tobacco products and other nicotine delivery products (like vaping) at a different, and lower, rate. In doing so, it essentially drives smokers and would-be smokers to these products, undermining the impact of the increase in cigarette taxes and deprives the state of revenue. Additional revenues that could add tens of millions of dollars to the state coffers.
And that may be the “hook” to get budget makers interested.
Increasing the price of non-cigarette tobacco products by raising tax rates reduces the demand for those products, which, in turn, leads to significant reductions in their use. Those reductions help lower health costs while increasing state revenue.
It makes sense from a public health perspective and makes sense from a state revenue perspective. Let’s see whether and how the Hochul Administration handles it.