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The higher level of state tobacco tax revenues after a rate increase will decline over time as state smoking levels continue to shrink, but the revenue levels will remain much higher than they would have been without the rate increase, the report said, adding that the revenue decline occurs at a gradual, predictable rate, which makes related budget planning quite easy. But a 2010 National Conference of State Legislatures study found cigarette taxes arent a stable revenue source because, unlike other excise taxes, theyre levied on a per-unit basis that doesnt automatically provide revenue growth in response to price increases

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