EagleTribune.com, North Andover, MA

February 16, 2013

Smoke signals

Tobacco tax hike plan has some lawmakers fuming

By Alex Lippa
alippa@eagletribune.com

---- — Smoke poured out of some Republican lawmakers’ ears when they heard Gov. Maggie Hassan’s proposal to raise New Hampshire’s cigarette tax by 30 cents.

Lawmakers who oppose the move fear it would keep Massachusetts’ smokers on their own side of the border, a concern shared by many Southern New Hampshire store owners.

While a 30-cent hike would be significant, the state’s cigarette tax would still be lower than the three border states, 53 cents a pack lower than the current tax in the Bay State.

“I think it’s important to drive sales into the state,” said Rep. Jeffrey Oligny, R-Plaistow. “If we have a competitive advantage, then so be it. People who buy cigarettes will always look for the best deal.”

Some smokers buying cigarettes along the border yesterday agreed.

Rob Medeiros of Fairhaven, Mass., said he buys cigarettes whenever he’s in New Hampshire. If the tax hike goes through, he said, the Granite State may see fewer customers from south of the border.

“There’s going to eventually be a tipping point,” Medeiros said. “I could see myself eventually cutting back and then possibly for good.”

The rate would increase from $1.68 to $1.98 per pack, a $3 dollar increase per carton.

Chanta Pen, owner of Mini Express in Plaistow, is worried about the impact that could have on her business.

“It’s already expensive as it is,” Pen said. “I can’t lower it any more myself or I would get no profit.”

The then-GOP-controlled House lowered the tax rate by 10 cents in 2011. Hassan’s proposal would restore that tax cut and raise it 20 cents more.

“I worry Massachusetts people won’t come to New Hampshire as much,” said Kamal Patel, owner of Discount Stateline Store in Salem.

Kevin Whitaker of Wakefield, Mass., was buying cigarettes yesterday at Foods Plus on Route 125 in Plaistow. He said prices are high enough.

“There’s just no reason for all of this,” Whitaker said. “Higher prices than these would be crazy.”

John Thompson of Andover, Mass., didn’t exactly welcome a tax hike, but he said he would still buy cigarettes.

“I probably wouldn’t change anything,” he said. “Things are just taxed too much.”

But store owners can’t count on everyone following Thompson’s lead, according to John Dumais, president of the New Hampshire Grocers Association.

He said 40 percent of cigarette sales come from out-of-state customers.

“This would reduce sales even further,” Dumais said yesterday. “We already haven’t been able to reach the sales that we want.”

A tobacco tax hike could have a domino effect, he said.

“If people keep seeing commodities rise, there is less reason to go to New Hampshire,” he said. “That wouldn’t affect just cigarettes, that would affect the entire shopping basket.”

But not everyone opposes the idea.

Edward Miller of the Northeast division of the American Lung Association applauded the proposal.

“We would support larger tobacco tax rate hikes than 30 cents,” Miller said. “It’s proven to be a strong tool.”

Miller said every 10-cent increase decreases the youth smoking rate by about 7 percent.

Rep. Mary Till, D-Derry, supported the tax increase.

“It’s not going to fund everything, but this is a good first step,” she said. “Cigarette taxes are still lower than any other states in the area.”

Massachusetts’ tax rate is $2.51.

But House Republican Leader Gene Chandler of Bartlett said the 30-cent hike was just too much.

“It’s too aggressive,” Chandler said. “If they did want to at a minimum, restore a loss of revenue, they should have brought it back up 10 cents. I don’t think I would have supported it, but it would have been a lot more reasonable.”

Rep. Ronald Belanger, R-Salem, said he worried about the impact the increase would have on middle- and lower-class families.

“It hurts the working class family,” he said. “If you’ve got af amily of four to five kids, it’s going to take away from them. I wouldn’t put a burden on that family.”

State cigarette tax rates New Hampshire: $1.68 Massachusetts: $2.51 Vermont: $2.62 Maine: $2 Rhode Island: $3.50 Connecticut: $3.40