Smoking Groups Insisting Mayor Blow Off Tax
A platoon of elite lobbyists is preparing for political war with Mayor Michael Bloomberg, crafting position papers, dreaming up telegenic images and identifying legislators who may be easily swayed by well-honed arguments and well-timed campaign contribut
The lobbyists represent two powerful groups mobilizing to kill the proposal, which would tax smokers to the tune of $250 million to help plug a $4.7 billion hole in the cityâ€™s budget. One of the opponents is the tobacco giant Philip Morris USA, which is headquartered on Park Avenue and 41st Street and is busily crafting a lobbying counteroffensive. As if Big Tobacco werenâ€™t a daunting enough foe, Mr. Bloombergâ€™s proposal now has another adversary: a coalition of 10,000 Dominican bodega owners and Korean greengrocers, who argue that the tax will deal the shopkeepers a severe blow by decreasing customer traffic in their stores.
The looming two-front war may have the makings of Michael Bloombergâ€™s first real Rudy Giuliani moment, in which the Mayor morphs into a municipal scold intent on taming tobacco merchants. Indeed, the fight over the cigarette tax will provide Mr. Bloomberg with the first bully pulpit of his two-month-old administration. He has given his tax proposal a moral tinge, arguing that it would liberate children from the grip of a lethal addiction.
â€œI think anyone who smokes is crazy,â€ he observed not long ago, adding, in an apparent reference to Mr. Giulianiâ€™s former director of communications, Sunny Mindel: â€œI heard that the former press secretary smoked. But I would be shocked if that were true.â€ (It is true, Mayor.)
To the storeowners and the tobacco executives alike, city smokers arenâ€™t lunatics; theyâ€™re prized customers who purchase some 350 million packs of cigarettes a year. The shopkeepers have unfurled a banner bearing an innocuous monikerâ€”â€œNeighborhood Retail Allianceâ€â€”and they have assigned the task of making their case to a well-connected lobbyist named Richard Lipsky. Mr. Lipsky is something of a virtuoso at portraying his clients as economic Davids being ground under the heel of various Goliaths. He played a key role in representing a coalition of small shopkeepers that helped defeat a zoning plan in 1996 that would have allowed big-box superstores to open in their neighborhoods.
â€œWe shouldnâ€™t balance the budget on the backs of small businesses,â€ Mr. Lipsky said in an interview with The Observer. â€œThe only people that get hurt by this tax are the little stores that rely on tobacco sales to drive customer traffic. At the end of the day, it will do nothing to alleviate the health concerns of New Yorkers.â€
Meanwhile, executives at Philip Morris are already formulating their battle plan. According to sources, the companyâ€™s executives held a conference call on Feb. 19 to plot strategy with two of the companyâ€™s top lobbyists: Martin McLaughlin, who will lobby members of the City Council, and Robert Malito, whose job is to influence state legislators in Albany. (Mr. Bloomberg needs approvals from the City Council and from Albany to implement the tax.) Neither Mr. McLaughlin nor Mr. Malito returned calls for comment.
Despite the planned counteroffensive, Mr. Bloombergâ€™s advisers say that he has no intention of backing down. In addition to bringing in much-needed revenue, he has argued, the tax will persuade many tobacco addicts to quit rather than shell out $7 for a pack.
War on Horizon
The coming conflict will certainly enliven City Hall, setting the stage for raucous budget hearings populated by tobacco executives, angry merchants and nicotine-crazed smokersâ€™ rights advocates. In an interview with The Observer, Mr. Lipsky, who is no stranger to orchestrating such events, vowed that a telegenic and pan-ethnic parade of shopkeepers would show up to testify before the City Council, which holds hearings on the budget in March.
â€œThere will be Indians and Pakistanis who own stationery stores, Dominican bodega owners and Korean greengrocers, all of whom have a vested interest in demonstrating to the City Council and the Mayor that this budget gimmick is futile,â€ Mr. Lipsky said.
Mr. Lipskyâ€™s willingness to parade small shopkeepers through City Hall has already enraged some backers of the tax. They point out that the lobbyist has frequently represented retail groups holding the same view as Philip Morris on anti-smoking legislation, and they accuse him of tacitly collaborating with Philip Morris in legislative fights. For instance, Mr. Lipsky, representing a small business group, fought unsuccessfully to stop a ban on smoking advertising near parks and schools that passed the City Council several years agoâ€”a law also fought by Philip Morris.
â€œLipsky and the retailers have worked with Philip Morris in the past, and we have every reason to believe that heâ€™s fronting for Philip Morris right now,â€ said Elena Deutsch, director of tobacco control at the American Cancer Society, which supports the tax, along with several other health organizations in New York. â€œThey are coming together to defeat a tax that could help save the lives of New Yorkers.â€ Ms. Deutsch argued that price hikes for cigarettes are proven to reduce smoking and added that her group would help push the measure through both the City Council and State Legislature.
Mr. Lipsky denied ever collaborating directly with Philip Morris. â€œIâ€™ve always been accused of being an affront, but never a front,â€ he said. â€œI donâ€™t front for anyone. I represent the small stores, and Iâ€™ve done it successfully for 20 years.â€
In addition to lobbying Albany politicians, Mr. Lipsky plans to target City Council members in leadership positions, including Speaker Gifford Miller and Finance Committee chairman David Weprin. He hopes to aggressively lobby black and Latino Council members who preside over districts filled with small grocery stores.
â€œOur stores are concentrated in the districts of black and Latino Council members, and we are actively looking for allies among them,â€ Mr. Lipsky said. â€œThose Council members who oppose the cigarette-tax hike will be perceived in the small-business community as champions of their interests, and in two years that perception will translate into active financial support.â€
Mr. Lipsky will be joined in his efforts by Sung Soo Kim, the president of the Korean American Small Business Service Center of New York, which represents 3,500 Korean grocers.
â€œIf people donâ€™t pick up cigarettes, then they wonâ€™t come for drinks, for sandwiches, for other groceries,â€ Mr. Kim said, adding that he would hold a press conference at City Hall in March to advertise his groupâ€™s opposition.
Executives at Philip Morris concede that their counteroffensive is just in the planning stages, but they promise to be every bit as aggressive as the small shopkeepers. â€œYou can expect a similar approach,â€ said Brendan McCormick, manager of media relations for Philip Morris USA. â€œWeâ€™re not going to lay out our strategy, but we will communicate our position to elected officials and work with anyone who shares our view.â€