SIOUX CITY, Iowa – South Dakota smokers have been crossing state lines into Iowa to purchase their cigarettes since January 1, the day the $1-per-pack cigarette excise tax hike took effect, the Sioux City Journal reports. Currently, Iowa’s cigarette tax is 36 cents per pack, while South Dakota’s is now $1.53 per pack.

However, Iowa Gov. Chet Culver is proposing a $1-per-pack hike in the state’s cigarette excise tax; if approved, Iowa smokers may be crossing over into Nebraska, which has a tax of 64 cents per pack.

Iowa retailers on the border with Nebraska expressed concern that a higher tax would result in lost revenue. Gov. Culver contends that the income loss would not be as widespread as suggested. "It would have about a 5 percent impact statewide on the sales of tobacco products,'' he told the newspaper. “The bottom line is the majority of people do not get into their cars and drive far for cigarettes. They are addicted to nicotine. They want it and want it now.''

Creighton University economics professor Ernie Goss told the newspaper that a tax increase likely would not bring in as much revenue as expected because some adults will stop smoking and some younger residents would not start smoking due to the higher retail prices. He also suggested that more residents would purchase cigarettes in neighboring states or some would smuggle contraband tobacco to get around paying higher taxes.

Iowa's 36-cent-per-pack tax has not been increased since 1981. Nebraska Gov. Dave Heineman also has proposed increasing his state’s tax by 80 cents per pack.

In South Dakota, House member Gary Moore has proposed lowering the $1-per-pack tax hike okayed by state voters last November because the increase has hurt retailers in his border district.