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Published: Friday, 7/1/2005

Smokers snap up cigarettes ahead of today's tax hike

BY MEGAN GREENWELL
BLADE STAFF WRITER
Tracy Scott, an employee at Barney's convenience store at Alexis Road and Detroit Avenue, restocks cigarettes on the store's shelves. Today, the cigarette tax will jump 70 cents per pack. Tracy Scott, an employee at Barney's convenience store at Alexis Road and Detroit Avenue, restocks cigarettes on the store's shelves. Today, the cigarette tax will jump 70 cents per pack.
LISA DUTTON / BLADE Enlarge

For Randy Branson, the worst part about today's cigarette tax increase in Ohio is that it comes the same day his rent is due.

The Toledo resident yesterday bought five cartons of Marlboro Lights at Barney's convenience store at Alexis Road and Detroit Avenue, the last day before the state's cigarette tax jumps 127 percent.

He would have bought several more cartons, he said, but payday doesn't come until next week, and he has to write a check to his landlord.

Mr. Branson stood in a long line for cigarettes at Barney's yesterday afternoon after waiting 10 minutes to pull up to one of the gas pumps outside. Today also brings a two-cent-per-gallon gas tax increase, the last phase of a three-year plan to raise the tax by six cents a gallon.

"I'm stocking up on cigarettes now, but I'm going to run out soon enough," Mr. Branson said. "But I can't afford to buy more now, so I'm going to have to pay more later."

As of today, Ohio's cigarette tax increased 70 cents, to $1.25 a pack. For Mr. Branson, a two-pack-a-day smoker, that translates into an extra $10 a week. For Toledo retailers, it may mean a reduced advantage over stores just over the Michigan border.

At $2 a pack, Michigan's cigarette tax is the third-highest in the nation. Ohio's tax, now the 12th-highest, remains 75 cents cheaper per pack, but retailers say that won't be enough to motivate Michigan residents to continue crossing the border.

"Toledo will be hit harder than any city in the state because we're making so much money off people coming from Michigan," said Bob Richard, owner of the 10-store Barney's chain in northwest Ohio. "Toledo had a gold mine here, and that's going to go away."

Mark Smith, a Temperance resident, said that because he works in Ohio, he will still buy his cigarettes on the south side of the state line. But his friends who work in Michigan won't make the same choice, he said.

"To save a buck-fifty a pack, sure, they'll drive the extra 10 miles," Mr. Smith said, loading seven cartons of Kools into his pickup. "But now it's half that. They'll just suck it up and buy them in Michigan."

The cigarette tax hike was part of a deal in the Ohio Senate in May that substituted the 70-cent-a-pack increase for a proposed doubling of beer and wine taxes. That angered convenience store owners, who said intense lobbying from the state's two major breweries - Anheuser-Busch north of Columbus and Miller north of Cincinnati - put an unfair burden on smokers.

"It's still politically correct to bash cigarettes," Mr. Richard said. "If they say they're going to tax tobacco, nobody is going to argue with them."

The furor over raising cigarette taxes is nothing new - many smokers remember when Ohio upped its rate three years ago, and Michigan followed suit just last year. What is unique about today's increase is that retailers like Mr. Richard and smokers like Mr. Smith aren't the only ones upset. Anti-smoking advocates are unhappy as well.

Leaders of groups like the Ohio Tobacco Use Prevention and Control Foundation, which runs the STAND anti-smoking ad campaign, say they are thrilled that people will have more of a financial incentive to quit smoking. However, they are frustrated that an estimated $216 million in tobacco funds will be redirected away from anti-smoking efforts toward school construction projects.

"Fewer dollars available means fewer programs," said Bill Renner, executive director of the Ohio Tobacco Use Prevention and Control Foundation.

"The end result is that fewer Ohioans will be helped to quit smoking," he said.

Still, Mr. Renner said the immediate effect of the tax would be positive because it would cause people to quit smoking.

Although research indicates that tax hikes do prompt a decrease in the smoking population, most of the smokers who lined up at cigarette shops and convenience stores yesterday said tax hikes would not drive them to quit. Store managers said they ordered extra cartons this week in anticipation of a rush to beat the 70-cent increase.

Michelle Gee, manager of the Main Stop convenience store in Pioneer, Ohio, just south of the Michigan line, said she couldn't stock cigarettes fast enough.

Cigarette sales were up about 30 percent this week, she said, and yesterday brought the biggest rush of all.

"We have so many Michigan customers coming in here that this is going to hurt us very much in terms of the volume we sell," Ms. Gee said. "We're anticipating a big drop in customers next week."

Jeff Erb, the general manager of the 11-store Main Stop chain, said customers at his Williams County stores likely would drive an extra few miles to go to Indiana after today. Indiana's cigarette tax is 55 cents per pack.

"The government has no foresight whatsoever," Mr. Richard said, adding that he expects an increase in the number of people buying tax-free cigarettes from unregulated Internet sites. "If we sell the same number of cigarettes at a higher price, it'll raise money. But that's not how it works. They think the smoker is stupid, but we're pretty good at going around the system by going somewhere else."

Contact Megan Greenwell at:

mgreenwell@theblade.com

or 419-724-6050.



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