Cigarettes Up To $7 a Pack With New Tax

By MICHAEL COOPER

Mayor Michael R. Bloomberg signed a bill yesterday that will raise the city's cigarette tax to $1.50 a pack beginning today. City officials and opponents of smoking say the increase will give New York the highest cigarette tax in the nation and push the price of some brands to more than $7 a pack.

"This may be the most important measure my administration takes to save people's lives," Mr. Bloomberg said before signing the bill during an unusual Sunday morning public hearing in City Hall. The timing was necessary for the law to take effect today.

Under the new law, the city's cigarette tax will grow by $1.42 from the current 8 cents a pack. On top of that, the city's smokers will have to pay the highest state cigarette tax in the nation, an additional $1.50 a pack. The two taxes will increase the price of some brands to more than $7 a pack, which is nearly double the national average.

As anti-smoking advocates praised the tax, smokers complained bitterly that the city was balancing its budget on their backs. And a representative of bodega owners warned that many stores could be driven out of business and that more smokers would buy black market cigarettes.

City officials say the new tax will bring a much-needed $111 million into the city's coffers this year, helping plug a budget shortfall of nearly $5 billion, but Mr. Bloomberg said that he viewed the measure mainly as a public health initiative.

"If it were totally up to me, I would raise the cigarette tax so high the revenues from it would go to zero," said the mayor, who has said he hopes that the higher taxes will persuade smokers to quit and will prevent children from becoming smokers.

At the hearing, Mr. Bloomberg found himself face to face with critics.

Audrey Silk, the founder of a group called Citizens Lobbying Against Smoker Harassment, testified that consenting adults should be free to engage in risky behavior if they choose, and that smokers should not be singled out for higher taxes.

Then she turned the tables on the mayor and his predilection for some junk foods.

"I know that you love to eat chunky peanut butter with bacon and bananas," she said. "How about I come out and start a campaign to tax that bacon, that's going to cause heart disease, and tax that super-chunky peanut butter that's going to kill you?"

After conferring with the city's health commissioner, Dr. Thomas R. Frieden, Mayor Bloomberg said: "The health commissioner points out that this is not exactly freedom of choice, given that smoking is addictive and that the industry spends billions of dollars to get people hooked on it."

Jim Lesczynski, a former Libertarian Party candidate for City Council, testified that the tax would lead to the creation of a new black market, with illegal cigarette dealers getting into shootouts and terrorist groups like Hamas turning to cigarette smuggling to finance their activities. He told the mayor that he would be distributing free cigarettes around the city to protest the new tax. And he pointed to the portrait of Thomas Jefferson on the wall behind the mayor.

"I note with a little bit of irony," Mr. Lesczynski said, "that you're signing this bill below the picture of a gentleman farmer from Virginia who was a fan of tobacco, and not a fan of excessive taxation."

The mayor told Mr. Lesczynski not to give any free cigarettes to minors. As for the founding father, the mayor said, "the gentleman behind me, up on the picture, lived in a period where we did not have medical evidence of just what smoking does."

The city initially expected the tax increase to generate $250 million a year. But the state, which was worried that the city's higher tax, by discouraging smoking, would therefore drive down the amount of revenues expected from the state's tax, is taking roughly half the revenue generated by the city tax for itself.

A City Health Department spokeswoman, Sandra Mullin, said that with the new law, New York City would have the highest cigarette tax in the nation. The tax also won praise from groups like Campaign for Tobacco-Free Kids, and the American Cancer Society.

Richard Lipsky, a lobbyist for the owners of small delis, bodega owners and convenience stores, predicted in an interview that many neighborhood stores would not survive the higher tax as many smokers would buy their cigarettes over the Internet, from Indian reservations, from adjoining states or from smugglers.

But Mr. Bloomberg argued that children, at least, would find it difficult to find cheaper cigarettes. "Children, let me point out, generally don't have credit cards, so they don't go on the Internet and buy cigarettes, generally," he said. "Children don't drive, so they don't go to other states."

And he pointed out that cigarette taxes were going up steeply in New Jersey as well, and said that he had talked with Andrew J. Spano, the Westchester County executive, about the possibility of higher cigarette taxes there as well. "We're trying to get everybody in the surrounding areas to raise the cigarette tax," he said.