CONCORD – New Hampshire convenience store owners and grocers urged a state Senate panel earlier this week to defeat a bill to increase the state tobacco tax, the Associated Press reports. The bill has the backing of the New Hampshire House and governor.

Arguing that the proposed 30-cents-per-cigarette pack increase (to $1.98) would make the state’s retailers less competitive with their colleagues in neighboring states, opponents of the bill said raising the price of cigarettes and tobacco products could also lead to store closings if the higher prices drive customers away.

“Customers are very sensitive to price fluctuations in cigarettes,” said Cindy Gagnon, speaking for Cumberland Farms in New Hampshire.

Supporters of the measure maintain the state needs the additional revenue to fund state programs and that even with the increase, the state’s tax would be lower than those in surrounding states.

State Rep. Cindy Rosenwald said the increase is needed to pay for spending in the state budget and that the higher price could discourage youth from smoking.

“We should do everything we can to discourage smoking,” Rosenwald said.

Two years ago, New Hampshire reduced its cigarette tax 10 cents per pack (to $1.68) to encourage cross-border shopping. At the time, tobacco retailers argued the lower rate would encourage residents in neighboring states to shop in New Hampshire.

The reduction was contingent upon state revenue from tobacco sales not falling below levels established the previous two years. However, revenue has dropped and as a result, the rate is due to revert to $1.78 on August 1 if lawmakers take no further action.

Even with a 30-cent increase to $1.98, New Hampshire’s cigarette tax would be lower than those in neighboring states (Rhode Island, $3.50; Connecticut, $3.40; Vermont, $2.62; Massachusetts, $2.51; Maine, $2).