This effort involved NATO mailing a personalized letter to More than 7,100 state legislators and all 50 state governors warning them that an increasing number of states that have recently raised cigarette and tobacco taxes have either collected less tax revenue than before the latest tax increase or collected far less than the estimated amount. For the past two years, the National Association of Tobacco Outlets has been warning state legislators that further increases in the cigarette and tobacco tax rates were killing the goose that lays the golden eggs. This statement is no longer just a figurative pRediction, but an empirical reality that at least seven states have now come to realize. In the past eighteen months, newspaper stories have chronicled this new fiscal reality that cigarette and tobacco tax increases have run their course. On August 19, 2007, the Asbury Park Press reported that New Jersey collected $23 million less than the previous year cigarette tax revenue after raising the tax to $2.575 per pack. In March of this year, the Detroit Free Press published a story that tax evasion is costing Michigan $140 million a year in lost cigarette taxes after the legislature raised the cigarette tax to $2 a pack. On April 14, 2008, the Daily Cardinal reported that Wisconsin's $1 per pack increase in the cigarette tax has resulted in a shortfall of 11 percent in tax revenue. When Tennessee raised its cigarette tax rate from $.20 to $.62 per pack, the Associated Press issued a story that the state tobacco tax revenues were $61.2 million less than estimated in just the first nine months of the fiscal year. After Maine increased the cigarette tax to $2 per pack, the State House News Service reported last fall that the cigarette tax collections were $5 million below budget. Just like Wisconsin, the New Hampshire 28 cent cigarette tax increase brought in 11 percent less than estimated according to the New Hampshire Union Leader. Finally, Vermont has experienced a $ 12 million drop in cigarette and tobacco tax collections after raising the cigarette tax to $1.79 per pack and the OTP rate to 41 percent of the wholesale price. Clearly, a point of diminishing returns has now been reached regarding tax increases on Cigarettes and tobacco products. This phenomenon is occurring because consumers drive to neighboring states with lower cigarette and tobacco tax rates to buy their favorite brands, order Cigarettes and tobacco products online to escape all state excise taxes or buy their tobacco products from black market dealers instead of legitimate retailers. This recent experience by a growing number of states should serve as a fiscal forewarning to all lawmakers that increasing cigarette and tobacco tax rates to collect More revenue is no longer a viable solution. Further increases in cigarette and tobacco tax rates will virtually guarantee that a state will collect less tax revenue than before the tax increase or fall substantially short of budget revenue estimates. It is time for state lawmakers to focus on taxing non-tobacco products if they seek additional revenue to fund programs. The mindset that taxing Cigarettes and tobacco products at ever higher rates will result in an unending stream of revenue is clearly undermined by recent state fiscal data. Besides resulting in lower revenue collected, increases in these taxes lead to Reduced retail sales and lost jobs in the local community. These facts demonstrate that sound state budgeting practices should focus on alternative revenue sources to fund government programs rather than raising cigarette and tobacco taxes.