ALBANY, N.Y. -- New Yorkers started paying the highest cigarette taxes in the nation Tuesday with the latest $1.25 increase per pack that officials expect to bring in $265 million a year, reported the Associated Press. Convenience stores across the state and the smokers who will be paying the price are angry about the change, but health officials hail the tax increase as a success.
Cigarette taxes will raise a total of $1.3 billion for the state budget in fiscal year 2008-2009, including the new tax.
"Isn't that something—to say that I'm excited about a tax increase? But I [image-nocss] am," said Dr. Richard Daines, the New York health commissioner. "This is a public health victory. We know one of the really effective tools to get people off of their nicotine addiction is to the raise the price."
Smokers will be paying $2.75 per pack in state taxes, a jump from the previous tax of $1.50. Before the new tax, the average price of a pack of cigarettes was $5.82 statewide, and about $8 a pack in New York City, which levies its own taxes, Daines said. The new retail price for a pack in the city could now soar past $10 depending on the store.
Daines said the tax increase is just one part of an $83 million anti-smoking effort that includes advertising and public service announcements, attempts to get tobacco consumption out of youth-rated movies and cessation centers around the state. "What we really want people to do is not to pay the price, but to stop smoking," he said.
Audrey Silk, who heads NYC Citizens Lobbying Against Smoker Harassment, said it is ridiculous to expect smokers to quit just because the price is climbing. She switched to rolling her own cigarettes since the last New York City tax increase and suggests other smokers will find similar ways to satisfy nicotine cravings. "No product has a tax at this rate on it," Silk said. "If there was, there would be screaming, but since we've been beaten into submission and nobody listens to us, what else is there to do? It's unjustifiable and you turn to alternatives, and any consumer group would do the same."
C-stores, which count on cigarette sales, have also objected to the tax, saying it will drive smokers—and dollars—elsewhere. "The tax increase is only going to feed that epidemic," Jim Calvin, president of the New York Association of Convenience Stores (NYACS), told AP. "More and more smokers in New York state are going to abandon our stores that have to charge the tax and shift their purchases to places that don't charge the tax, most notably Native American stores, the Internet and bootleggers."
He told The Daily Gazette that NYACS thinks the average store will lose 30% of its sales volume after the tax hike goes into effect. The number will vary depending on the proximity of the store to border states or reservations. "But everybody is going to lose a lot of cigarette sales," he said, sales that retailers depend on to generate traffic in their stores and, consequently, additional purchases. "I'm very fearful what's going to happen to mom-and-pop convenience stores in the next three to six months," he said. "It's going to be a disaster."
Retailers are bracing for a downturn in cigarette sales once the new taxes take effect. "It will have an impact on our business," Gary Cunningham, a category manager for the Saratoga Springs-based Stewart's chain, told the newspaper. Stewart's has 325 shops, 10 of which are in Vermont. Cunningham said there is "an interesting border phenomenon" between New York and Vermont. A couple of years ago, Vermont's cigarette tax was significantly lower and New Yorkers made it a point to buy in Vermont. Then it flip-flopped when Vermont instituted a tax higher than New York's "and now it's going back the other way," he said.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.