Tax may not affect cigarette
sales
By Heather Mangold
City
Editor
Local businesses are expressing opposing views
on whether or not a 50-cent increase on sales tax for cigarettes would
make a difference.
Within Gov. O'Bannon's newest budget proposal,
the tax on cigarettes could raise by 50 cents per pack, in order to
increase funding for education in Indiana.
The current tax on cigarettes is 15.5 cents per
pack. If the governor's new budget proposal were implemented, Hoosier
smokers could be spending close to four dollars for each pack of name
brand cigarettes. The cigarette tax has not been raised since 1987,
but federal and state sales taxes have affected their cost.
At Discount Den in West Lafayette, a pack of Marlboro
Lights costs $3.35; Camel cigarettes cost $2.82. The Marlboro's at Discount
Den would cost $3.85 and Camels would cost $3.32 if O'Bannon's proposals
were put in place.
Darla Rothenberger, a manager at Discount Den,
said that the 50-cent increase would not make a difference in her sales,
however.
"I think everybody wants their cigarettes, no matter
how much they are," said Rothenberger. "It would have to be more than
50 cents for it to make a difference."
Rothenberger said that cigarette prices have increased
by almost a dollar in the last year, and since then she's noticed an
increase in students' purchase of generic brand cigarettes. Still, Rothenberger
does not think that an additional tax increase on cigarettes would lead
students to quit smoking.
Betsy Bogan, owner of Bogie's Stogies in Lafayette,
said that she thinks the tax increase could make a big difference.
"Fifty cents per pack is a lot," said Bogan. "I
have had people tell me that if cigarettes went up by 50 cents per pack,
the amount they bought would be affected."
Bogan said that student smokers make up a large
portion of her sales. She sells mainly imported cigarettes, which cost
close to four dollars per pack, and said if the tax increase included
imported cigarettes her sales could be harmed.
For the next two years, fiscal numbers have suggested
that Indiana's funding for education is sparse. In fact, fiscal numbers
have shown that Indiana will be $923 million short for the current fiscal
year, an unexpected deficit.
O'Bannon suggested that an increase be put on cigarette
sales tax as well as the suspension of personal property tax credit,
which was passed in 1999. Both would act as the governor's solution
to the shortage of funds in Indiana. According to a news release from
the governor's office, suspending the credit would provide an additional
$265 million over the next two years.
The Indiana Tobacco Prevention and Cessation Agency
recently announced their support for O'Bannon's efforts to raise the
sales tax on cigarettes.
"An increase in the cigarette tax is good public
health policy for kids," said State Health Commissioner Greg Wilson,
who is vice chair of the agency's board. "The rate of youth tobacco
use is directly related to the cost of cigarettes," he said in a news
release.
Studies show that a 50-cent increase in the tobacco
tax would keep nearly 50,000 Hoosier children from becoming smokers,
said Wilson in the release.
Committee members for the Indiana House of Representatives
and from the state Senate have until the end of April to decide if the
governor's budget proposal will lay the groundwork for Indiana's upcoming
fiscal biennium, which consists of the years 2001 and 2002.
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