Smokers, Retailers Burn As Pennsylvania Cigarette Tax Rises

CARLISLE, Pa. (AP) - When Pennsylvania's cigarette tax goes up by a buck per pack on Monday, it will give smokers one more reason to quit or cross the border.

The tax, headed to $2.60 from $1.60, will push the price of a pack above $7, the largest single increase on the state's smokers since Pennsylvania first imposed a cigarette excise tax in 1935.

For Democratic Gov. Tom Wolf and the Republican-controlled Legislature, it was the biggest step so far toward addressing a long-term deficit that has badly damaged Pennsylvania's credit rating.

Brent Johnson, a construction handyman and pack-a-day smoker from suburban Harrisburg, said he wouldn't change the habit that costs him $6.84 per pack.

"It is what it is," Johnson said. "I used to live in New York, so I'm used to paying $7, $8, $9 per pack."

Still, Johnson isn't happy about it. It isn't right to target smokers, he said, when lawmakers have other options to balance the budget.

"They're taking someone's habit and they're taking advantage of it," Johnson said while finishing a cigarette on a downtown Carlisle sidewalk. "They could have put casinos in airports and been done with it."

The House passed a wide-ranging bill in June to expand gambling in Pennsylvania that included allowing casino-style gambling parlors in airports, but it stalled in the Senate. Supporters had touted it as a way to pump up state tax collections, alongside a cigarette tax increase.

On Monday, Pennsylvania's roughly 14,400 licensed cigarette retailers will boost the price of cigarettes, if they haven't already.

The increase will make Pennsylvania's tax the 10th-highest in the nation, up from a tie with Ohio and Delaware at 23rd highest. It could also make Pennsylvania the top state in tax revenue collections from cigarettes, according to data from the Washington-based Campaign for Tobacco-Free Kids.

The per-pack cigarette tax in Philadelphia will be $4.60, counting a $2 per-pack tax added in Philadelphia in 2014 to help fund the city's schools.

Cigarette taxes could be going up elsewhere, too. Petitions are seeking to put higher cigarette taxes on the fall ballot in California, Colorado, Missouri and North Dakota.

Pennsylvania's Department of Revenue estimates that the higher tax will generate another $425 million a year for the state treasury.

Meanwhile, it estimated that cigarette sales will decline 9 percent, due to both the tax increase and an increase in the minimum retailer markup from 6 percent to 7 percent in the same law.

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Smokers who live along Pennsylvania's borders will now have another excuse to make a one-stop run to a border state for cheaper gas and beer. Pennsylvania's gas tax is the nation's highest, thanks to a 2013 transportation funding bill, while takeout beer remains largely the province of distributors and bars in Pennsylvania.

"Now you add another major product to the list with cigarettes," said Alex Baloga, vice president of external relations for the Harrisburg-based Pennsylvania Food Merchants Association. "You're potentially buying cheap alcohol, tobacco and gas somewhere else."

An April survey of 200 tobacco retailers for the association found that 83 percent believe the new tobacco taxes would hurt their business. More than half said that tobacco sales are very important to their bottom line and that higher tobacco taxes would require them to slash payroll.

Dawn Alonzo, 37, has smoked for 20 years, and the higher tax is one more reason now for her to keep trying to quit. The Carlisle resident has tried to quit for the past year, at the urging of her children, and she has set Aug. 31 - her grandmother's birthday - as her drop-dead day to stop. That means that, at least for a month, she'll pay an extra $1 per day or so.

"For right now until I can slowly wean myself off," Alonzo said, "I'll have to make do."

(Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)