Baltimore tobacco shops say that a City Council bill proposing to tax cigars and pipe and chewing tobacco sold in the city will wipe out their businesses, costing about 50 jobs.
The owners of the Fader's chain and Max's Tobacco Emporium in Fells Point submitted written testimony Wednesday night to the council opposing the 36-cent to 90-cent per sale levy. The shop owners complain that the city tax would force tobacco users to buy their products outside Baltimore.
"Why send business and jobs out of the city?" asked Fader's president, Michael J. Goeller.
Max's owner Ron Furman said:
"In a city that appears almost powerless against guns and violence, in a city that appears to be losing the war on drugs and in a city where the education system is in serious trouble, you are considering taking action against legitimate businessmen and women that employ decent and hard-working people."
Baltimore would become the first city in the state to tax cigars and pipe and chewing tobacco, a measure that is expected to be approved by the council and has the support of Mayor Kurt L. Schmoke.
If the bill becomes law, the city would tax individual cigars at 36 cents each. A package of six or fewer cigars would be taxed 90 cents. The levy on pipe tobacco would be 72 cents per sale, and 54 cents per sale on chewing tobacco.
State law prohibits local governments from imposing a tax on cigarettes, but the law does not apply to cigars and pipe and smokeless tobacco.
State tobacco opponents had hoped the Maryland General Assembly would increase the state's 36-cent-per-pack cigarette tax by $1.50 per pack last year; that would have raised $300 million in state revenue. The measure was rejected 7-6 by the Senate's Budget and Taxation Committee. Maryland is one of six states that does not tax cigars or pipe and smokeless tobacco.
The bill, introduced by the Rev. Norman Handy Sr., a South Baltimore councilman, is being pushed by Maryland Children's Initiative. The group said that 60 Maryland children a day get hooked on tobacco and that the measure would help block further increases.
City finance leaders estimate the tax would bring in close to $500,000 in new revenue annually.
"Young people and those who work with young people understand best how critically important it is to do all that we can to discourage the use of tobacco products," said Vincent DeMarco, executive director of the Children's Initiative. "Here in Baltimore we can take a major step toward protecting our children by passing this legislation."
Fader's, which owns 12 area shops and has been in Baltimore for 107 years, had planned to open a new headquarters at 12 S. Calvert St. That might be halted if the council approves the bill, Goeller said.
If the bill becomes law, tobacco shops in the city would not be able to compete with county shops, Goeller said. "Quite frankly, Fader's would be better served moving its flagship store to a surrounding county or Washington, D.C.," he said.