ALTOONA, BLAIR COUNTY
The federal and state governments are both looking to tax tobacco.
President Barack Obama signed the State Children’s Health Insurance Program into law Wednesday. One of the S-CHIP’s funding sources is a hike in tobacco taxes. And that comes at the same time that the state wants to increase its tobacco tax to help the budget.
People that own tobacco shops say the tax hikes are going to hurt them and their customers. And one man said it could put him out of business.
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The tax hike to fund S-CHIP is going to increase the price of cigarettes by about 60 cents per pack and about 40 cents per cigar. But the biggest increase would take the taxes on a pound of loose tobacco from about one dollar to almost 25 dollars. That would triple the cost of the product.
And Governor Ed Rendell wants to increase state taxes too. It would be about ten cents more a pack. He wants to tax smokeless tobacco and cigars for the first time. He says it will generate more than 100 million dollars in revenue.
But Terry Dandrea says he's just going after an easy target, because only about 25 percent of people smoke. He's one of the owners of Blair Candy Company and Nics Tobacco Outlet. He says tobacco is taxed enough already, and any more is going to hurt business.
Art Martino owns Ken's Cigar and Tobacco. He says between state and federal it will be an increase of about 80 cents on every cigar. That would be about 12 hundred dollars in taxes just from what he has in his humidor. He says he can't afford it, and he's not alone. He says if this goes through he won't be able to keep his business open. And Martino says if this happens, they won't be able to tax it for long. He says this is going to push people out of business then there will be nothing left to tax.
Most smokers that talked with WTAJ were angry about the tax hikes. But one woman said she was ok with it. She has smoked off and on for 40 years. She admits it's unhealthy so she thinks if they need tax money that is a fine place to start.
The federal tax hikes take effect on April first. But the state budget hasn't been approved yet so those numbers could change.
