Convenience stores oppose cigarette tax hike

Local convenience stores have penned a letter opposing Gov. Gina Raimondo’s proposed increase on the cigarette tax, saying such increases would hurt their customers and businesses. If Raimondo’s budget is passed, it would hike the cigarette tax 50 cents from $3.75 to $4.25 a pack, making it second only to New York’s tax of $4.35, and bring in $8.7 million more in revenue to the state.

Signers from six stores – Shop-N-Go, Harss Express, Sam’s Food Store, City Line, Al-Mall Daily Mart and Gulf Express – in Warwick and Cranston said parts of Raimondo’s proposed budget, like an increase to the minimum wage, were “laudable,” but that a cigarette tax increase could actually hurt the citizens she’s seeking to help with a wage increase.

“Based on data from the Centers for Disease Control and Prevention, 27% of Rhode Island adults who earn less than $15,000 are smokers, while 10% of adults who earn more than $50,000 are smokers. That means those who would benefit from the Governor’s minimum wage increase would be hurt the most by a cigarette tax hike. That’s not fair,” they write.

Cigarette sales account for 32 percent of all convenience store in-store revenue, they add, and “every time the cigarette tax goes up, the number of people coming into our stores goes down.” Their customers often go to Connecticut or Massachusetts instead to purchase cigarettes, they write in the letter that appears in today’s edition. According to the Boston Globe, the tax in Massachusetts is $3.51, and Tobacco Free Kids lists Connecticut’s at $3.90.

Jail-Rahman, Shop-N-Go’s owner for 20 years, said some of his customers go as far as New Hampshire, where the tax is $1.78 on packs of 20 and $2.23 on packs of 25. He said he sells about 200 packs per week, but that drops by about half whenever the tax increases.

When these customers go elsewhere, “we lose not only cigarette sales but also the sales of other convenience items like snacks, milk and bread. And when we lose sales, we are faced with the difficult choice of cutting jobs and/or hours of our hourly employees,” the signers write.

A request for comment from the governor’s office was directed to the state Department of Health. The Department’s Public Information officer Joseph Wendelken said that when looking at economics of cigarette sales, it’s “important to consider” that smoking-related healthcare costs in Rhode Island total $614 million a year, with $216.8 million of the costs paid for by Medicaid. He also noted that changes in cigarette prices could impact the number of young people who smoke – the Department of Health spends a lot of its time working to prevent youth tobacco use as nicotine addictions are often developed during adolescence, he said.

“We know that youth smoking rates are very sensitive to price changes, such as the one being proposed in Rhode Island,” Wendelken said, adding that a portion of revenue generated from the 50 cent hike would be invested specifically in community efforts to prevent initiation among young adults.

The governor’s budget will go before the General Assembly in June.