December 21, 2008

Virginia Governor Tim Kaine proposed a double in the tax on cigarettes in the Commonwealth when he met with the money committees earlier this week.

However, there are some people who are not happy with the idea of cigarettes going up in price.

Henry Lee, the owner of Lucky Seven in Charlottesville, is concerned about Governor Kaine's proposal for a cigarette tax hike because cigarettes account for one third of his business.

"For example, yesterday 600 customers came to my store. Out of the 600 people, about 200 customers bought cigarettes. So, that's one-third of my sale right there," said Lee.

At present, the tax is 30 cents per pack in the Commonwealth, which ranks as the fourth lowest state cigarette tax in the nation.

Wednesday, Governor Kaine proposed to raise the tax to 60 cents.
The increase would create about $148 million a year for health care and has its backers.

Delegate David Toscano (D, 57th district) said this would help replace cuts being made in the Medicare and Medicaid budget.

"If you want to raise revenue, that might be a place you could do it. [We could] use the money to replace cuts that are occurring in Medicare and Medicaid budget, where we often fund folks who have smoking related diseases," said Toscano.

Lee predicts he could see a significant drop in cigarette sales if taxes are raised, which could force him to layoff some of his employees or cut their hours.

"If the cigarette prices are 6 dollars or 7 dollars at the same level as New York, I'd probably see at least 20 to 25 percent drop in the number of cigarettes that I sell," he said.

The tobacco tax plan does have its critics in Richmond though. One top Republican lawmaker says a 30 cent boost in the cigarette tax would fall on deaf ears with Virginia lawmakers.