Top Takeaways:
- Maine raises cigarette tax to $3.50 per pack under new budget.
- Cannabis and streaming services also face higher taxes.
- New revenue supports Medicaid and social services.
Maine lawmakers have approved a $320 million supplemental budget that raises taxes on cigarettes, recreational cannabis, and digital streaming services to close funding gaps in the state’s Medicaid program and expand support for education, housing, and child welfare.
The plan, passed by the Legislature and now awaiting Gov. Janet Mills’ signature, increases the cigarette tax by $1.50 to $3.50 per pack. The tax on recreational cannabis will rise from 10% to 14%, while a new 5.5% sales tax will apply to services like Netflix and Spotify.
“This budget meets the moment,” said Rep. Drew Gattine (D-Westbrook), chair of the Appropriations Committee. “It addresses the biggest issues Maine people are facing and protects critical investments.”
Republican lawmakers opposed the measure, calling it a financial burden on working-class residents. “Mainers already experience the fifth-highest tax burden in the country,” said Sen. Bruce Bickford. “Enough is enough.”
The supplemental budget builds on the $11.3 billion two-year plan enacted earlier this year. Lawmakers said the new taxes will help stabilize the MaineCare program and fund expanded public services. A short-lived Democratic revolt over the tax hikes ultimately collapsed after five holdout members changed their votes.
If signed into law, the tax increases are expected to generate millions in new revenue, affecting nicotine and cannabis consumers across the state.
