Monday, April 6, 2009

IL: Cigarette taxes spark anger

PEKIN, Ill. -
The new federal tax on cigarettes and the proposed $1 state cigarette tax increase has some smokers up in arms as they try to figure out how they will deal with the higher cost.

“I think it’s wrong taking away our cigarettes,” said Donald Bogart, 69, of Pekin, as he stood outside the Boardwalk Tavern on Court Street smoking a Doral. “And that’s what they’re doing to a lot of people.

“This wouldn’t have happened 30 years ago. I’ve been smoking for 50 years and I’m not going to give them up. They’re taking a part of people’s lives away from them. It’s a bunch of baloney — people come back from fighting a war and have to pay $50 for a carton of cigarettes. That’s wrong. And I’m 69 years old and can’t sit in a bar and have a cigarette with my beer.”

Bogart, who is on Social Security, said the new tax will hurt people on fixed incomes. When he started smoking, he paid 10 cents for a pack, he said.

A 61-cent cigarette tax increase, which took effect on Wednesday, was instituted by the federal government to fund health care. On the heels of that, the Illinois Senate Thursday approved a bill that would raise the state cigarette tax by $1 to help fill an $11.5 billion budget deficit. The state tax is now 98 cents.

The new tax is not affecting just smokers. Local businesses are noticing the effects as well.
“We’re paying for everything,” said Mike Gardner, owner of two Ace Liquor stores in Pekin. The city recently instituted a 2 percent sales tax on package liquor.

“I just got notice from the federal government that I have to pay $6.01 for every carton of cigarettes I have in stock,” Gardner said. “That’s a lot of money. Cigarettes accounts for 20 percent of my business at my Fifth Street store. I can’t sell cigarettes at the Derby Street store because of my lease agreement. The landlord has an agreement with a cigarette store in the plaza that no other business would be allowed to sell them.”

Gardner, who did not know about the proposed state tax increase until the Daily Times asked him about it Friday, said those on fixed income will suffer the most. He said he has seen two male smokers who “are beside themselves” about the new tax.

“Jeez — another dollar,” he said. “If sales drop, that is definitely going to hurt businesses.”
Gardner sees a drop in sales every time the tax on cigarettes increases, he said, but sales pick back up after a while.

“It’s sticker shock,” he said. “After a while, people will get used to the price and buy again. I’m sure when the city liquor tax starts May 1 many people will gripe, but after a while they will get used to it.”

Lucky Mart Manager Amy Habal said she only sold five packs of cigarettes Thursday after Wednesday’s federal tax increase. In an effort to bring in customers, she dropped the price of a pack of Marlboros from $5.50 a pack to $4.79.

“Sales are down about 60 percent,” she said. “It really cuts into our business.”

Sales at Discount Tobacco, on the other hand, have been up. The shelves behind the sales counter were virtually bare Friday as the store awaited two new shipments. Manager Vickie Frost said she had customers lined up looking for bargains Friday. People came in to stock up before the federal tax started, she said, and she sold her last carton of Kools Friday afternoon.
“We’ve had a lot of people coming in buying ahead,” she said. “On March 31 we were pretty much wiped out of everything.

“The price for roll-your-own products went up the most. People are paying $10 for a 6-ounce bag of tobacco.”

Frost said she also took advantage of the lower prices before the federal tax went in effect. The price of a carton of small cigars was going up by $10 a carton on Wednesday, she said, so she bought 10 cartons for her husband and put them away.

Habal said she has heard the same things from customers that she has always hears after a tax increase: People want to quit.

American Heart Association President Dr. Timothy Gardner said the recession and the higher taxes could help people see the need to give up cigarettes.

The tax increase “is a terrific public health move by the federal government,” he said. “Every time that the tax on tobacco goes up, the use of cigarettes goes down.”

About one in five adults in the United States smokes cigarettes. According to the Centers for Disease Control and Prevention, smoking results in an around 443,000 premature deaths each year. Smoking is a major contributor to heart disease, cancer and lung disease, and it costs the economy $193 billion in health care expenses and lost time from work.

Pekin resident Dan Weaver, a smoker of 12 years, said the tax is not fair. He said he smokes because it relaxes him and relieves stress.

“I think if they are going to tax anything it should be something everybody uses — not just the users,” said Weaver. “It does kind of p— me off.

“I have a friend that said a couple of years ago cigarette taxes were used for road projects. He said, ‘If I’m paying for it I don’t want nonsmokers driving on my roads.’”

Just to be on the safe side regarding his income, Bogart said he bought nicotine patches Friday in case he changes his mind.

The Associated Press contributed to this report.

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