Smokers Brace For Higher Taxes
04/04/02
STRATFORD, Conn. -- Store owners had a hard time keeping up with demand
as smokers stocked up on cigarettes before higher taxes kicked in
Wednesday.
Ray Martin Jr. of Martin's Cigarette Outlet in Stratford said he sold
11,000 cartons of cigarettes in six days.
"We're selling as many in a day as we usually do in a week," he said.
"It's unbelievable."
Shakil Hashmi, manager of Smokers Discount World in Manchester, said
Tuesday that customers have been hoarding for at least a month. Business
has doubled, but he expects a downturn after the higher tax kicks in.
"For a couple of weeks it will be almost dead," Hashmi said.
The new state tax on a pack of cigarettes will rise from 50 cents to
$1.11, the third-highest in the nation.
Gov. John G. Rowland signed the tax into law Feb. 28, just hours after
lawmakers approved it.
The first significant tax increase in Connecticut in seven years is
intended to help close a two-year budget gap estimated at $1 billion.
The tax is expected to generate an estimated $40 million in the current
budget year and about $130 million in the fiscal year that begins July 1.
The run on cigarettes forced retailers to pay the tax in advance to
purchase stickers affixed to each pack of cigarettes.
"The stamp is smaller than the head of an eraser, and I have to put one
on each pack of cigarettes," said Dean Valentino, owner of Danbury Fair
Exxon in Danbury. "In theory, I can run my inventory down by Wednesday,
but the problem is the shoppers are pretty smart. They'll stock up on
Tuesday."
Ray Cyr of The Cigarette Express in Bridgeport said he hired two people
to affix stickers on each of the 24,000 packs of cigarettes in stock.
And Rocky Patel, owner of Ed's Cigar Box in Danbury, said he paid $4,000
for more than 6,500 stamps that were placed on cigarette packs.
Lawmakers set the date for the tax increase on Wednesday instead of
April 1, partly to give retailers more time to make the adjustments.
Ravi Chelladurai, owner of Royal Tobacco in Danbury, was not impressed.
"If it went into effect on Monday, we could have closed on Sunday and
stamped all the packs," he said. "This way, I have to close up Tuesday
night, and then work into the night stamping cigarettes."
Smokers should expect sticker shock.
A pack of name brand, non-discounted cigarettes will sell for as much as
$4.75 and the price of a carton will be between $44 and $47.
High-volume cigarette dealers could sell some brands for about $38 a
carton.
A spokesman for Philip Morris Cos. Inc. said the tax will be a burden to
moderate and low-income residents.
"This an extraordinarily high tax," spokesman Tom Ryan said. "Smokers
are being singled out for programs that benefit everyone. We don't think
it's fair."
State Attorney General Richard Blumenthal criticized the tax for failing
to produce revenue to help smokers quit.
"By raising the tax without enabling people to break the habit simply
imposes a heightened burden on people who can least afford it," he said.
"It does nothing to help people who want to improve themselves."