Calif. Cigarette Tax Benefits Some
Calif. Cigarette Tax Benefits Some
Nov. 13, 1998
PHOENIX (AP) _ If Tia Laffoon could say one thing to California smokers, it would be this: ``Come on down.''
``Our cigarettes are a lot cheaper than California's,'' says Laffoon, assistant manager of Pete's Smoke Shop in Parker, Ariz., right across the California state line.
Golden State smokers will soon have to contend with a new 50-cent-a-pack tax, and retailers like Laffoon think they can benefit. They're hoping for a windfall from California smokers who drive to Arizona, Nevada or Oregon to stock up and save.
Mike Eittreim, manager of Cy's Supermarket in Malin, Ore., less than two miles across the California state line, said a Philip Morris representative visited his store Wednesday with plans to help him snag California smokers.
``They're even giving us promotional dollars to try to get some California business,'' Eittreim said Thursday.
Until January, when the law takes effect, the company will pay Eittreim $3 for every 10-pack carton he sells so that he can lower prices from $23.89 to $20.89 a carton, he said. Several other area stores are getting the same deal, he added.
Brendan McCormick, a Philip Morris spokesman, said he didn't know what any individual representative might be doing but that the company was not making any effort to draw Californians across state lines. He said Eittreim's price break may have been part of a national promotion by the company.
Proposition 10 was approved by a margin of just 57,070 votes from more than 7.6 million ballots counted.
Backers expect it to raise $700 million annually for social services aimed at families with children under age 5, including prenatal care, stop-smoking programs, immunizations and domestic violence prevention. It raises prices on all tobacco products, not just cigarettes.
Ann Wright, spokeswoman for the American Cancer Society in Sacramento, one of the chief supporters of the initiative, said it could raise the price of a carton to as much as $25 or $30. Retailers expect that most people who leave California to buy cigarettes will stock up on cartons.
Proposition 10 opponents tried to prevent the initiative's passage by arguing it would cause black market cigarette sales in California.
Mark Smith, spokesman for the Louisville, Ky.-based Brown & Williamson Tobacco, said people will cross state lines to buy cartons and resell them in California. He said his company is trying to discourage them.
``You'll probably see record levels of contraband in the state,'' he said.
Wright said she doubts many smokers will hit the road because of the tax increase. She says the hike targets young smokers who don't have the means to leave California.
``I don't see any 11- or 12-year-olds driving to Nevada,'' she said.
Backers hope the price hike will persuade smokers to quit, not cross state lines, she added.
``Hopefully people are going to wake up and say, 'What am I doing here? This is going to kill me or make me sick.' ''
But Paul Garcia, manager of the Avi Smoke Shop on the Fort Mojave Indian Reservation near Laughlin, Nev., says many of his California customers have already promised to visit more often because of the tax increase.
``They said they're gonna start coming out here once a month to enjoy themselves and pick up cigarettes, too,'' he said.
Jesse Uras, manager of a Chevron station near the state line in Yuma, Ariz., says he's among those hoping for more California customers in light of the hike. A smoker himself who finishes half a pack a day, Uras said he wouldn't think twice about driving a few miles out of his way to save.
``If you're talking about 50 cents a pack, it would make quite a difference,'' he said.