Rhode Island news
R.I.'s cigarette tax –– highest in nation –– will be what kills ya now
10:56 AM EDT on Thursday, April 9, 2009
A smoker buys a pack of cigarettes, from Downtown Variety, in Providence.
The Providence Journal / Steve Szydlowski
Deanna LeBlanc knows what she wants as she ambles into a convenience store in downtown Providence and glances behind the counter. It’s a new day, about 11 a.m., and LeBlanc is looking for her trusted companion — a pack of Newports.
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At 36, LeBlanc has been smoking for more than half her life. She started at 15 and says she keeps doing it because it helps her relax when she’s feeling tired or stressed.
But at $7 a pack — the bargain price she found Tuesday at Downtown Variety — smoking a pack a day is expensive. For LeBlanc, who works as a cashier, that adds up to $49 a week, more than $200 a month and more than $2,000 a year.
And the price is going up. Beginning Friday, Rhode Island will have the highest state cigarette excise tax in the country — $3.46 a pack. That’s a one-dollar increase and it follows a federal excise tax hike to $1.01 per pack — up from 39 cents — that took effect April 1.
“It’s outrageous,” LeBlanc said. “I will have to quit. I can’t afford it.”
With the typical price for name-brand cigarettes in Rhode Island about to reach about $8.35 a pack — up from $6.50 just nine days ago — many longtime smokers are rethinking the costs to their bank accounts, if not their health.
Some, like LeBlanc, say it’s time to quit. Others, like Jeffrey Mooney, a 38-year-old cook from Providence, have switched to cheaper menthol cigars. They’re not supposed to be inhaled, but at $1.25 a pack, they cost a lot less.
Still others, like Michael Johnson, a self-employed handyman from Providence, say the latest increase in Rhode Island’s cigarette tax won’t make much difference.
“I think it might change how people buy,” he said, noting Internet prices that are lower than those in local stores.
At least 22 states are considering hikes in their cigarette taxes this year, turning to a revenue source that draws complaints from smokers and merchants and praise from people in the health community.
Hitting smokers in the wallet is precisely what’s needed, said Megan E. Tucker, director of advocacy for the American Heart Association’s Rhode Island office.
“We really see this as a win-win,” she said. “It’s a positive thing for Rhode Islanders and I think it will certainly improve the overall health of our state.”
Tucker pointed to data that show a long-term trend of declining cigarette consumption and rising revenues as states have raised their cigarette taxes.
From the early 1980s to 2006, the average nationwide cost of a pack of cigarettes rose from about $1.75 to $4.25. During the same period, consumption dropped from more than 30 billion packs a year to fewer than 20 billion, according to the Campaign for Tobacco-Free Kids.
In Rhode Island, the percentage of high school students who smoke dropped from 24.8 percent in 2003, when the state tax was $1.71, to 15.1 percent in 2007, when the tax was $2.46, according to figures from the organization. Meanwhile, tax revenue from all tobacco sales rose from $117.3 million to $136.3 million when the tax increased to $2.46, though subsequent years showed a gradual decline, said Paul L. Dion, chief of Rhode Island’s Office of Revenue Analysis.
Of course, the dangers of smoking are well known. Studies show it is the number-one cause of heart disease and the number-three cause of strokes in the United States.
That doesn’t make quitting any easier.
Some people, like Victoria “Penny” Zoglio, of Providence, smoke until they no longer have a choice.
Zoglio, 61, said she started at 15, because “it was cool” and has been smoking about a pack a day but was planning to quit Thursday.
The impetus is not the higher prices; it’s her health. On April 30, she’s scheduled to have open heart surgery, and she said her doctor recently gave her an ultimatum: “You’ve got to quit. You’ve got to quit.”
Governor Carcieri proposed the increase in the cigarette tax as part of his plan to close a $357-million deficit in this year’s budget. The General Assembly went along, approving the plan last week. The higher tax is expected to net an additional $13.1 million by June 30 and $30.2 million extra in the fiscal year that begins July 1, said Larry Berman, spokesman for the House of Representatives. An increase in the tax on smokeless tobacco, snuff and pipe tobacco, from 40 percent of the wholesale price to 80 percent, is expected to raise an additional $330,000 this fiscal year and $1 million next year.
The result for cigarette smokers is one of the highest retail prices in the country, though not necessarily the highest, because of minimum markups in some states and other taxes added by some states.
In Massachusetts, which has a lower excise tax than Rhode Island, cigarettes cost about $8.40 a pack. By comparison, the typical cost in New Hampshire, which has a $1.33 excise tax and has no sales tax, is about $5.50. Nationwide, the average retail price as of January –– before the federal tax increase –– was $4.25 a pack, according to the National Conference of State Legislatures.
Amir Alkabouni, manager of Downtown Variety in Providence, said the higher state and federal taxes will hurt retailers. Some people might switch to loose tobacco and roll their own cigarettes, but he said others will stop smoking or coming to the store.
Kathy-Jo Tetreault, of Providence, is among those who plan to quit — not because she’s angry about the new taxes, but because she’s angry about the hold smoking has had on her life. She started at 15 and she’s now 38.
“Some people get up and pray in the morning,” she said. “I get up and light a cigarette. My first thought in the morning is to smoke.”
But just as there are people who will decide to quit, there are others who might look for a cheaper way to buy, such as driving to New Hampshire. They are supposed to report their purchase and pay the Rhode Island tax, but few do.
Dion, of the state’s revenue office, said online sellers are required to share their shipment lists with each state, enabling the state to track down buyers for the state tax, although not all of them
Connecticut
Excise tax: $2 per pack
Sales tax: 6 percent
Maine
Excise tax: $2 per pack
Sales tax: 5 percent
Massachusetts
Excise tax: $2.51 per pack
Sales tax: 5 percent
New Hampshire
Excise tax: $1.33 per pack
Sales tax: none
Rhode Island
Excise tax: $3.46 per pack*
Sales tax: 7 percent
Vermont
Excise tax: $1.99 per pack
Sales Tax: 6 percent **
*As of Friday
** 7 percent in some communities
(Total per-pack prices are affected by minimum markups and special promotions, which vary state by state.)
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