In Md., cigarettes cost more today

Tax increase among 175 laws that went into effect at midnight

July 01, 1999|By Thomas W. Waldron | Thomas W. Waldron,SUN STAFF

Smoking got a little more expensive in Maryland this morning.

As of midnight, the state excise tax on a pack of cigarettes shot from 36 cents to 66 cents -- to the delight of health advocates and to the dismay of store owners who fear a loss of sales.

In the past couple of days, some smokers stocked up to avoid paying the additional $3 a carton.

"Glendening has enough of my money," said Milt Pandzik, 59, as he and his girlfriend bought eight cartons at the Cigarette Depot in Perry Hall.

Even so, Pandzik's girlfriend, Barbara Regnier, 58, said the added cost could reduce her smoking -- the main goal of Gov. Parris N. Glendening and the legislature in approving the tax increase.

Maryland is the only state raising tobacco taxes this year.

"The increase will probably cause me to not smoke as much," said Regnier, a bank employee. "I'd like to try to cut down."

The cigarette-tax increase is one of 175 laws that took effect today.

Among them is a measure allowing victims of the Holocaust to avoid paying state taxes on compensation they get for assets lost during World War II. The change is unlikely to have a significant financial impact and is widely viewed as a symbolic gesture.

Another law bans beauty salons from using methyl methacrylate liquid monomer, which is used to build artificial fingernails. It is cheaper than other products but can cause severe health problems.

And tough new standards for teen drivers are in effect, requiring them to wait four months instead of two weeks to qualify for a license and to document 40 hours of practice with an adult.

Many teens made a mad rush to beat the law by getting their learner's permits before today. Yesterday, the wait in lines at Motor Vehicle Administration offices exceeded two hours, officials said.

But the cigarette-tax increase will likely have the widest impact of any of the new laws.

Glendening had sought an increase of $1 a pack but settled on 30 cents after his bill was almost derailed by a filibuster as the legislative session ended in April.

The governor and other advocates predict the tax will stop many teen-agers from taking up the habit and cause others to quit because of the added cost.

"Combined with the $30 million per year the governor has pledged for anti-smoking programs, this 30-cent increase in the cigarette tax will keep thousands of children from becoming addicted to tobacco," said Vincent DeMarco, who lobbied for the tax increase for a coalition of health care providers and others.

But many smokers who stopped at the Perry Hall cigarette store, where the walls are covered with tobacco products and little else, resent having to pay an extra 1.5 cents per cigarette.

"Why am I being persecuted because of this habit?" asked Barbara Connelly, 50, a loan officer who smokes two packs a day. "I just think it's very, very unfair."

Some smokers, though, say they can't argue with the premise that higher costs will discourage smoking.

"I want to stop," said Grafton Lumsten, a 48-year-old construction worker. "It's getting so expensive."

Maryland's 66-cent-a-pack tax is the highest of any jurisdiction in the area, although the District of Columbia, with a rate of 65 cents, is a close second.

In Delaware, the tax is 24 cents a pack, meaning a carton of 10 packs will cost $4.20 less than in Maryland.

That has caused concern among store owners who rely on cigarettes for a major portion of their profits.

"We definitely see that already, and I'm sure it will get worse," said Gerard Welter, business manager for three service stations on the Eastern Shore. "I've even known my own employees to mention they're going to Delaware for a cigarette run."

In Southern Maryland, stores will have to compete with those in Virginia, where the tax on cigarettes is 2.5 cents a pack.

"They can go down to Virginia and get gas cheaper, too," said Norman Garrison, owner of Westlake Exxon in Waldorf, about a 15-minute drive from the Potomac River. "They can kill two birds with one stone."

Garrison said cigarettes account for about half of his non-gas-oline revenue, so even a small drop in tobacco sales would hurt.

State officials acknowledge that the tax increase will lead to reduced sales -- and a reduction in tax revenue.

In the coming year, the tax increase will generate almost $92 million in new revenue, according to official estimates. The next year, that figure is expected to drop to $76 million.

The state comptroller's office, which is charged with enforcing laws against cigarette bootlegging, says it has plans to combat the practice but declined to discuss them for fear of alerting would-be smugglers.

While cigarette smokers are taking a hit today, a year from now it will be cigar smokers and users of smokeless tobacco.

Under the legislation, the state will impose a 15 percent tax on those products beginning July 1, 2000 -- the first time Maryland has taxed any tobacco product besides cigarettes.

Although 12 months away, that prospect is causing concern.

Mike Goeller, president of A. Fader and Son Inc., which owns seven tobacco stores in Maryland, said the company will move its mail-order business to Pennsylvania, which has no tax on cigars or tobacco.

"The tax is going to cut our competitive advantage quite a bit, so we'll move it to Pennsylvania," Goeller said.

New state laws

In Maryland, 175 new laws took effect today. They include measures that:

* Increase the tax on a pack of cigarettes by 30 cents.

* Expand the state's scholarship program for B students to include those studying to be teachers. * Require public schools to observe the Rev. Martin Luther King's birthday as a holiday.

* Require employers who grant leave after the birth of a child to extend the same benefit to adoptive parents.

* Guarantee collective bargaining rights for state employees.

* Create panels to investigate the handling of child-abuse cases when a child dies or suffers severe injuries.

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