Once again, New York state has raised the price of cigarettes with the June 3 enactment of a $1.25 increase in its tobacco excise tax.
The state has geared up its quit line and other resources to prepare for tens of thousands of smokers expected to give quitting a try as a result of the price increase.
This could mean bad news for small businesses that sell cigarettes.
“When prices go up, mark-ups go down,” said Ramesh Patel, owner of Irv”™s Stationery in Port Chester. “This will hurt small businesses, definitely.”
Patel said approximately 40 percent of the store”™s business is in cigarette sales; of that business, Patel estimates he has lost 20 percent since the price went up.
However, he is confident that the store will make up for the loss in other ways.
He said customers most affected by the increase are those living on fixed incomes, particularly the old and the young. And some customers have decided to smoke less or even stop smoking as a result of the tax increase.
Patel said the price of a carton of cigarettes increased by $12.50. A pack of Marlboro cigarettes, $5.40 before the new tax, has risen to $6.65 a pack, or more than 33 cents per cigarette.
While the increase in the price of cigarettes may not be good for business, for customers who have decided to cut down or quit, “it”™s good for their health, so it”™s okay,” Patel said.
The state”™s American Lung Association chapter held a press conference regarding the increase, and Dr. Richard F. Daines, commissioner of the New York state Health Department, said the price increase is effective.
With the increase, cigarette prices in Manhattan will rise to $8 a pack or more.
Daines said youth are particularly sensitive to tobacco prices.
Daines said if teenagers have a limited number of dollars for the weekend, they will hopefully spend their money on something else. He said as a result of the tax increase, 240,000 people 18 years of age and younger will never start smoking because of the price barrier. Those data were obtained through mathematical models (from places where there have been price increases) applied to the state”™s population.
Daines said $8.2 billion a year is spent on smoking-related illness statewide.
“Our goal is still to reduce smoking, not to collect more taxes,” Daines said. “It”™s a great public health victory that really will pay off in future years.”
Michael Seilback, senior director of public policy and advocacy for the American Lung Association in the state, said that by making smoking expensive and inconvenient the increase will eventually save the lives of more than 77,000 youths who will not become smokers and save more then 37,000 adult New Yorkers from a tobacco-caused death.
Currently, about 18 percent of new Yorkers smoke. Seilback said the state hopes to reduce that percentage by getting 1 million smokers to quit by 2010.
Seilback said 30 percent of New York smokers during the course of the year go to a tax- evasion source such as the Internet or Indian reservations to buy cigarettes. He said Internet sales, which engender controversy since some youths skirt the age issue, are very low in New York state, at least right now.
He said tobacco control advocates are looking to work with elected officials to close any loopholes.
Susan Kennedy, director of the Tobacco Action Coalition of Long Island, said the state will receive $436 million revenue each year from this tax, “a measurable economic impact and a win for New York and a win for taxpayers.”
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