Local smokers prepare to pay $9 per pack

LYNN – Cigarette smokers are bracing for yet another government sin tax that will push the average pack price to nearly $9.
At Cal’s News in Olympia Square, a parade of customers voiced their dismay Monday. Among their descriptions of the hefty tax: Ridiculous. Incredible. Unbelievable. Outrageous.
“This isn’t a cigarette tax, it’s a tobacco tax,” said Barry Calvani, owner of the newsstand and tobacco shop. “Every product that has anything to do with tobacco will be taxed, from rolling papers to roll-your-own tobacco to filters, plugs, cigars and pipe tobacco. Nobody is going to escape.”
On Wednesday, the current federal tax of 39 cents per pack increases to $1.01. Cigarette makers such as R.J. Reynolds and Philip Morris have already increased their per-pack prices to accommodate the higher tax. For example, R.J. Reynolds increased the price of Camel, Kool, Winston and other brands on March 16. The per-pack increases ranged from 41 to 78 cents, depending on the brand. Philip Morris on March 9 hiked its prices by 71 cents per pack on brands including its popular Marlboro.
Smokers likely found these increases particularly painful, given that Massachusetts has the nation’s third-highest excise tax on cigarettes at $2.51 per pack. Of that, $1.51 goes to the state’s general fund while the remaining $1 is directed toward health care reform.
The current federal 39 cent tax goes to the U.S. Treasury, but the April 1 increase is earmarked for the State Children’s Health Insurance Program.
According to Calvani, cigarette price increases are the result of the brand’s base price and whether it receives a manufacturer’s subsidy. For example, longtime brands such as Lucky Strike, Pall Mall and Camel are not subsidized by their makers because the brand loyalty has been in place for decades.
“The people who smoke those brands are already hooked. They’re loyal and they’re not going to change, no matter what,” he said. “But somebody who smokes Marlboro might decide to switch to a less expensive brand, like Maverick.”
Calvani said the tax increase will hurt business. “First the manufacturers went up, and now the federal tax will push the prices even higher,” he said, noting that a 3-pack of Parliament sells for $18.85 but will cost an additional $2.40 on Wednesday. “Roll-your-own tobacco is $24 for 16 ounces. That was traditionally the tobacco bought by low-income smokers.”
At the state Department of Revenue (DOR), estimates on annual cigarette tax revenue were being readjusted downward by $15 million due to the economic climate that has decreased sales, according to DOR spokesman Bob Bliss.
During fiscal 2008, Massachusetts reaped $437 million from cigarette sales excise tax. Although state revenue officials had projected that figure would grow by $175 million, the estimate is now closer to $160 million.
While health advocates contend the higher prices will curtail smoking, several customers at Cal’s News said they would not cut back. One man said he would drive to New Hampshire, where cigarette taxes are lighter, and stock up.