Proposed cigarette tax increase draws praise and concern

Jan. 14—Gov. Janet Mills’ proposal to raise Maine’s tax on cigarettes is being met with mixed reactions as health advocates praise the plan, smokers lament the extra cost and retailers want a closer look at how it could impact sales.

At Broadway Variety in South Portland, store owner Justin West just learned of Mills’ proposal to increase the excise tax on cigarettes from $2 per pack to $3 per pack on Monday.

The proposal, unveiled by the governor as part of her biennial budget plan on Friday, would also raise the taxes on other tobacco products by similar amounts.

“It’s not going to help business, I can tell you that,” West said.

While he doesn’t expect people to stop buying cigarettes and tobacco products, West said the additional tax could impact their overall spending.

“It’s just going to take money out of their wallet,” he said. “The economy is already in a tough situation, so this won’t help anything. It will help the governor’s budget, which is great, but for every person coming in here, it’s definitely not going to help them.”

HEALTH ADVOCATES PRAISE PLAN

Health advocates are lauding the measure, which will go before lawmakers as they review Mills’ $11.6 billion budget proposal over the coming weeks and months.

The American Heart Association applauded Mills’ proposal last week, calling it “bold and forward-thinking” and saying it would help improve the health and well-being of Mainers, especially children. The association said tobacco use remains the leading cause of preventable disease and death in Maine.

“Evidence shows that tobacco taxes improve public health, save lives and lower health care costs, creating a ripple effect of positive outcomes across the state,” Allyson Perron Drag, vice president for field advocacy for the American Heart Association, said in a written statement. “We commend Gov. Mills for taking a stand for Maine’s health.”

The Maine Public Health Association also said the increase would reduce youth tobacco use and encourage current users to quit.

“We applaud Governor Mills’ commitment to protecting Maine kids by including a tobacco tax increase in her proposed budget,” Matthew Wellington, associate director of the association, said in a statement Friday. “Raising the tobacco tax reduces youth tobacco use and helps ensure that the next generation grows up free from tobacco addiction and harm. It’s a long overdue step.”

IS THERE A COST FOR BUSINESSES?

But some retailers are worried the proposal could drive away business, particularly near the New Hampshire border. Maine currently has the second-lowest state tax on cigarettes in New England at $2, while New Hampshire is the lowest at $1.78, according to the Campaign for Tobacco-Free Kids.

“The single biggest issue I think is that New Hampshire’s tax is already lower than Maine’s and this would create a wider gap between the two states,” said Curtis Picard, president and CEO of the Retail Association of Maine.

He said the proposal could benefit New Hampshire at Maine’s expense, but stopped short of saying the retail association would oppose it. “It’s too early to say,” Picard said, adding that the $80 million in revenue that the proposal is expected to bring in over two years is a “pretty hefty increase.”

Maryanne Alhamdany, co-owner of the Westbrook Market convenience store, said a lot of her customers have brought up — and derided — the proposed tax hike since its announcement.

Alhamdany said she was not particularly worried about the impact to her bottom-line, because “people are still going to smoke.”

“It may encourage a few to quit, but realistically I feel like it’s just putting more of a burden on the people that do (smoke) in an economy that’s already really hard to live in,” Alhamdany said.

Depending on the cost of gas and tolls, it may not be worth it for customers far from the border to cross for their cigarettes, she said. But for those who live near New Hampshire, crossing could mean a notable discount.

“I feel like the state is driving people to make other choices that don’t contribute (locally),” she said. “People are going to find a way. They always find a way, if they’re not ready to quit smoking.”

Alhamdany said it seems like the state is trying to simultaneously discourage smoking while banking on the revenue it brings in.

“It’s very hypocritical,” Alhamdany said. “They’re just hurting themselves.”

MIXED REACTION FROM SMOKERS

At Broadway Variety, West said the proposal will hurt customers’ wallets, even if it’s not necessarily felt by his business. “I don’t think it will discourage them (from smoking),” he said. “People aren’t going to say, ‘It’s $1 more. I’m not going to smoke anymore.’ That’s just money they’re not going to spend on something else.”

Richard McDonough was checking out with his weekly purchase of one cigar on Monday and said he doesn’t mind the tax proposal. McDonough said the cigar costs about $11.

“I’m not a heavy tobacco user,” said the 72-year-old South Portland resident. “I’m OK with it.”

Ray Coughlin, a longtime smoker from South Portland who had just bought a pack of Camels, said the proposal is “ridiculous.” He wasn’t sure if the added cost would stop him from buying them in the future. “I’ve been trying to quit anyway, so I don’t know,” he said.

In Lewiston, Ayan Tariq was working the cash register at 7 Days Market Monday and said it saddens him to think about having to raise prices “on some of the people who can least afford it.”

“We have the lowest prices in town, but will have to increase them because of this,” he said.

Abe Chipman, who was lighting up a cigarette outside the market, called the proposal “a rip-off.”

“They shouldn’t be attacking us,” the Lisbon resident said.

OTHER OPTIONS TO RAISE REVENUE?

It remains to be seen if lawmakers will support Mills’ proposal, though some Republicans have already said they won’t.

“Maine is already one of the highest taxed states in the country, so we don’t see a need to increase any tax,” House Minority Leader Billy Bob Faulkingham, R-Winter Harbor, told reporters following the unveiling of Mills’ budget last week.

James Myall, an economic policy analyst at the Maine Center for Economic Policy, said Monday that an increase to the cigarette tax wasn’t the center’s first suggestion for raising state revenues.

A policy memo released by the center last year suggests adding new high-income tax brackets, creating a “millionaire’s tax” on income over $1 million and closing business tax loopholes, among other things, in order to raise revenues and create a more fair tax system.

Myall said it’s generally true that lower-income populations have higher rates of tobacco use, so taxes on cigarettes and tobacco products tend to disproportionately impact them. But he said research has shown that such taxes have a health benefit in reducing tobacco use.

“As an organization we’re mostly pleased that there has been an attempt to raise some revenue and reduce the need for cuts in the budget,” Myall said. “We appreciate that. We also think there’s an opening for some other solutions to raise revenue.”

Press Herald Staff Writer Daniel Kool and Sun Journal Staff Photographer Russ Dillingham contributed to this report.

Copy the Story Link

EMEA Tribune is not involved in this news article, it is taken from our partners and or from the News Agencies. Copyright and Credit go to the News Agencies, email news@emeatribune.com Follow our WhatsApp verified Channel