NH considers 45-cent cigarette tax increase

New Hampshire

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June 19, 2009

Smokers, retailers upset with cigarette tax proposal

By James A. Kimble

CONCORD — Smokers have a clear message they want to send to lawmakers about upping the cigarette tax: Don't do it.

The Legislature is considering raising New Hampshire's cigarette tax by 45 cents a pack to help patch a $650 million revenue gap. If the bill passes, New Hampshire's tax would be $1.78 per pack.

New Hampshire would remain the cheapest state in New England to buy cigarettes even if lawmakers pass the 45-cent increase, according to the Campaign for Tobacco-Free Kids.

But the gap would certainly be narrowed, especially for people who travel to the Granite State to buy their smokes.

A special House-Senate committee agreed to the 45-cent increase Wednesday.

Rep. Robert Elliot, R-Salem, said once the proposal for hiking the cigarette tax passed the subcommittee, he went around to a half-dozen retailers in his town to let them know he would vote against it.

"This is an attempt to not do what needs to be done," Elliot said. "I would prefer to see gambling. If gambling does not pass, I feel very confident we're going to see a sales or income tax."

Gov. John Lynch has said he will reject a sales or income tax.

Elliot, a member of the House Finance Committee, said he also worries about how local convenience stores and mom-and-pop businesses could be affected by a higher tax.

The state line is dotted with convenience stores, including ones that cater specifically to cigarette smokers who travel from Massachusetts to dodge the Bay State's levy of $2.51 per pack.

Joe Macaro, manager at Cigarette City on Route 28 in Salem, said he has seen firsthand how customers have changed their smoking habits since the New Hampshire tax increased by 25 cents a pack last year. Smokers were already reeling from a 62-cent-per-pack federal tax increase April 1, which increased the federal cigarette tax to $1.01 per pack. Some people are buying fewer cartons, or they're buying uncut tobacco and rolling their own cigarettes.

"It's ridiculous," Macaro said. "Tax something else. They should just tax everyone's grocery bill instead. I don't smoke, so it doesn't affect me personally. But it does affect my job somewhat."

Steven Neely of Methuen, Mass., was buying tobacco at Cigarette City yesterday. He said he began rolling his own cigarettes months ago because cartons became too expensive for him.

He said he smokes up to 15 cigarettes a day. A pre-rolled cigarette would only give him seven to eight puffs, compared to the hand-rolled ones he can smoke for 20 minutes. A shoebox-sized bag of tobacco can last him two and a half weeks, he said.

Neely chalks up the repeated cigarette hikes to Democratic administrations on the state and federal level.

"Let me put it this way," he said. "Between Deval (Patrick) and Obama, they both said they wanted change. But we didn't know the only change they wanted was out of our pockets."

New Hampshire may not find out until Wednesday — when the state budget is voted on — whether the cigarette tax increase passes.

Rep. Anthony DiFruscia, R-Windham, said he wouldn't be surprised if the tax is lowered before it passes. The House previously backed a 35-cent-a-pack increase.

Asked if he supports the increase, DiFruscia said, "No, no, no, no, no, no. To me, it's counterproductive in a session like this. I don't believe that's a way to go and I'm not going to support any tax."

DiFruscia, like many of his counterparts in and around Salem, said he believes gambling is the one sure way to shore up the budget and avoid any new taxes. Whether the Legislature will seriously consider the latest expanded gambling proposal remains to be seen.

For Sarah Collins, a Hanover, Mass., resident who works in Lawrence, increasing the cigarette tax is offensive.

"It's absolutely terrible," she said. "They are already keeping us 500 feet from buildings. We are neglected citizens. If it's that bad for us, then stop making them."

Collins said the price increase would make the cost of her weekly trip to a Salem store nearly the same as buying them in Massachusetts.

"If there's a 45-cent increase, then that's going to bring the prices to the same as what it is in my neighborhood," she said.

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State taxes on cigarettes (per pack)

Massachusetts: $2.51

New Hampshire: $1.33 ($1.78*)

Connecticut: $2

Maine: $2

Rhode Island: $3.46

Vermont: $1.99

*Proposed