New cigarette tax raising more money than expected
Linda Harley, a pack-a-day smoker, doesn't need state statistics to tell her people are still buying cigarettes despite a new 31-cent tax.
"I need my cigarettes,'' Harley said Friday as she smoked during a break from her data-entry job in Columbus. "If you're going to buy your cigarettes, it doesn't matter how much they cost.''
Ohio earned about $81 million from its new cigarette tax in July and August -- about $6 million more than expected, the Office of Budget and Management announced last week.
Lawmakers approved the 31-cent increase in June to help balance a $1.9 billion deficit. The state estimated putting the total cigarette tax at 55 cents would earn an additional $224 million annually.
Opponents said it would drive smokers to border states where taxes were lower. But Indiana, Michigan and Pennsylvania all raised their cigarette taxes about the same time.
The result was that the tax's negative impact still hasn't been felt, said Josh Sanders, spokesman for the Ohio Council of Retail Merchants.
He said the exception is Kentucky, which has a 3-cent cigarette tax. He said Cincinnati stores are continuing to lose sales to Kentucky businesses, although he didn't have statistics.
Sanders also said people will turn to cheaper cigarettes offered via the Internet.
But the state's increased revenue defeats the Internet argument, said Larry McAllister, president of the American Lung Association of Ohio.
McAllister attributed the increased revenue to a rise in youth smoking before the tax took effect. He predicted the tax will discourage teens from buying cigarettes.
McAllister said his association will push for the tax to be increased again. "Every time it goes up, we have a reduction in youth smoking,'' he said.
In Michigan, lawmakers raised the cigarette tax 50 cents, to $1.25 a pack beginning Aug. 1. That lessened the impact of the tax in the Toledo area, said Robert Richard, who owns 11 stores along the state line.
"It has not had a great effect because Michigan has had an even higher increase,'' he said.
Bob Jonas, owner of Ritze Marathon in Cincinnati, said Ohio's tax hasn't hurt his sales. He offers cigarettes for about $4.10 a pack.
People complain, "but they keep digging money out of their pocket and buying them,'' Jonas said.