PROVIDENCE — How would increasing the state cigarette tax impact Rhode Island tobacco sales?

It depends on who you ask.

State budget officials say the combined effect of raising taxes by $1-a-pack and eliminating minimum pricing laws would generate upward of $17 million in new revenue by June 30, helping to close the deficit.

Convenience storeowners fear it will have the opposite effect. Fewer people will be able to afford cigarettes, they say. Those who can will look to the Internet and low-cost states such as New Hampshire for cheaper deals.

The result: Rhode Island’s sales will plummet and they’ll lose much-needed business.

Currently, a pack of name-brand cigarettes costs more than $7 in Rhode Island. That’s compared with about $8.25 in Massachusetts where lawmakers last year raised the per-pack tax by $1.

When that happened, Rhode Island owners say, business here spiked as smokers flocked across the boarder for deals. Were this state to add $1 per pack now, it would inch prices closer to Massachusetts’ and scare off that new business.

To offset that increase, the Carcieri administration –– as part of its mid-year budget-cutting plan –– has also proposed eliminating the minimum pricing rules enacted years ago to help protect small retailers. Officials say that change would keep prices competitive.

But small business owners said wiping out minimums will foster price wars. Big chain retailers will no doubt undercut their “mom-and-pop” prices, forcing them out of business.

“I know that sin taxes like the cigarette excise tax have become the easy target for state legislatures across the country looking to raise some quick, desperately needed money. And I know that smokers are an easy target,” said former Massachusetts State Rep. Paul Caron, now executive director of the New England Association of Wholesale Distributors. “But I would remind you that there are unanticipated consequences that often accompany raising that tax. You are affecting the livelihood of thousands of residents who make up the distribution and sales system.”

Manish Modi, who owns a small convenience store in West Warwick, said he’s barely surviving as it is. “I cannot afford to lose any more business,” he said. “This tax increase is going to drive more and more people to close their stores and drive me almost to bankruptcy.”

If anything, Modi said, Rhode Island should consider decreasing its cigarette tax to encourage out-of-state residents to come here.

But Modi and the state’s 470 other convenient storeowners may have trouble getting support. A new poll, by Rhode Island College pollster Prof. Victor Profughi, shows that 70 percent of respondents support raising the state’s cigarette tax by $1.

According to the American Cancer Society, the tax bump would do more than raise revenues; it would save lives. Higher taxes, they say, translates to fewer new smokers and fewer diagnoses.

At a House Finance Committee hearing yesterday on the plan, Chairman Steven M. Costantino offered a stinging message.

“What’s in front of the committee today is that you can drop the rate of cigarettes and a whole bunch of people in this audience will clap,” the chairman said. “And then [Rhode Island] can maybe be number one in [the incidence] of 10 different categories of cancer.”

Providence Rep. Thomas C. Slater was even more frank. “I don’t [care] if they raise the tax $5 a pack. Let the business go to Massachusetts and let them become the cancer center of the country,” said Slater, a cancer survivor himself.

Throughout the next week, the committee will review each item in the governor’s mid-year budget repair plan. It will not offer recommendations on tax increases, or on any other proposals until that analysis is complete.

cneedham@projo.com