Smokers no fans of tax hike: $1 per pack added cost proposed by governor

By Steve Huffman

shuffman@salisburypost.com

Stan Patterson was enjoying a cigarette outside Hendrix Barbecue in Spencer on Thursday morning and waxing not-so-poetic about the proposed $1 increase in the cost of a pack of smokes.

"It's a damn shame," he said. "We're made the scapegoat for all of society's problems."

Patterson and other smokers like him are up in arms over the $1-per-pack tax hike on cigarettes proposed by Gov. Bev Perdue. If approved, the tax on cigarettes will be raised from 35 cents to $1.35 per pack to help reduce a $3.4 billion budget shortfall.

Patterson and others like him who still partake of an occasional smoke don't like it.

"It's absolutely unfair," he said. "Tax the liquor, tax the beer. We're not the cause of all the problems. It's not our fault that legislators can't manage our money."

Smokers across the state have expressed outrage at Perdue's recommendation, noting that such actions — during the midst of a recession, especially — are unfair. They argue that if the tax is implemented, it will cost the state manufacturing jobs, the opposite of its intended purpose.

In any event, the days when tobacco was North Carolina's cash crop are long gone. Philip Morris USA is phasing out its operations in Concord, moving some to Virginia. RJ Reynolds in Winston-Salem employed 15,500 employees in 1983 and will soon be down to slightly more than 3,000.

"It is incomprehensible that the governor would introduce a tax hike of this magnitude on top of the historic leap in the federal tax on cigarettes effective April 1," said Tommy Payne, a spokesman for ReynoldsAmerican, the parent company of RJ Reynolds.

The proposed tax increase is part of the state's budget, and must be approved by legislators. Payne said he's hoping that approval doesn't happen.

"Maybe Washington, D.C., doesn't care about jobs in North Carolina, but we expect better judgment out of Raleigh," Payne said. "Surely the North Carolina legislature will exhibit that good judgment and not dig our state into a bigger unemployment hole."

He said if all the proposed taxes are eventually implemented, the retail price for a pack of cigarettes in North Carolina will be approaching $5.50.

N.C. Rep. Fred Steen (R-Rowan) said he wasn't sure how the proposed hike in cigarette taxes will be perceived by legislators.

He said the budget will have to go before members of both the House and Senate before heading to conference for tweaking.

Steen said he hasn't decided how he feels about the proposed tax, though he said he questions its timing.

"There's never a good time to raise taxes, but we're facing an economic crisis," he said. "I'll have to take a look at the whole budget."

Steen said he doesn't smoke and won't be affected should the proposed tax increase take effect.

He said one of his concerns about the proposal pertains to how the tax would affect shop owners in counties that border neighboring states. Traditionally, Steen said, consumers will drive to border states if the money they'll save on items like cigarettes and gas justifies their doing so.

"I just hate raising taxes in a recession," Steen said. "Will this cause a trickle-down effect? We'll have to look and see what's going to happen."

North Carolina currently ranks 46th in the nation in taxes on cigarettes. A number of smokers have argued that more taxes on cigarettes won't result in a cutback in sales as much as it'll result in a switch to off brands. But there's debate if that'll be the case since the tax increase will be across-the-board, and not just on name brands.

Ed McDonald, a spokesman for Rep. Howard Coble (R-NC), said the congressman will oppose the hike. "He feels cigarettes are already taxed enough," McDonald said.