DOVER, Del. – Delaware retailers vigorously oppose a proposed 60-cents-a-pack hike in the cigarette tax, but lawmakers expect to approve the increase this week as part of balancing the state’s budget prior to Saturday's midnight ending of the main legislative year, The News Journal reports.
“We have committed that it will go to help school construction and to help pay for some programs that people need, and we are very serious about honoring our commitments," said state Senate Majority Leader Anthony J. DeLuca. Some of the revenue from an increase in the cigarette tax would help disabled Medicaid patients work full-time jobs without losing some benefits.
But cigarette dealers say the measure would hurt their businesses. Maureen Bradley-Waritz, who manages a First State Cigarette Outlet near New Castle, told the newspaper that more than 3,300 smokers have signed her petition asking lawmakers to reconsider the increase.
If passed, cigarettes would cost only 2 cents less per pack than neighboring Maryland, while Pennsylvania and New Jersey cigarettes would still cost 50 cents to more than $1 more per pack.
“When you look at the price of a gallon of gas today, it gets to the point where a smoker really wouldn't save that much by driving here,” Bradley-Waritz said. “So it hurts out-of-state business, but it also really hurts the people who live here and makes it harder for them to buy cigarettes.”
The bill contains a larger increase than the 45-cent hike Gov. Ruth Ann Minner asked for in January. “I think a lot of us had problems with what the governor proposed originally and the way it was built into the budget,” said state Rep. William A. Oberle Jr., co-chairman of the budget-writing Joint Finance Committee. “We could have done the budget without this, but it would have been painful. I think it will fly.”
Even with a 60-cent increase, Delaware's cigarette prices would stay below that of neighboring states', which is important because Delaware's cigarette business receives much of its business from Maryland and Pennsylvania, where prices are higher due to sales taxes.
Karan Gupta, who owns three gas station-convenience stores that cater to interstate customers, said the tax hike will take a chunk out of her profits. “When you get an increase in that range, it is going to hurt us,” he told the newspaper. “It’s not just cigarettes. Those customers also buy gas and other products, and we will lose that business, too.”