Saturday, June 1, 2002

Cigarette prices are expected to go up sharply in Maryland today when the state increases its tax to $1 per pack.
The 34-cent increase, approved by the General Assembly and governor this spring, makes Maryland’s cigarette tax the fourth-highest in the nation, behind New York at $1.50 per pack, Washington state at $1.42 and Connecticut at $1.11.
Maryland shares the ranking with Rhode Island, Maine, Alaska and Hawaii, which also levy $1 per pack.
Smokers yesterday said they did not know yet how the increase would affect their smoking or buying habits.
“It’s kind of quick,” said a man who identified himself only as Gordon, as he took a last drag on a cigarette before stepping inside an office in Rockville.
But two Maryland men, who asked not to be identified, said it wouldn’t make much difference in their cigarette habits because higher prices already led one of them to buy in the District and Virginia and the other to buy in Virginia and Delaware.
State law prohibits Maryland residents from bringing in more than two packs of cigarettes from other states.
Although a person who lives outside Maryland can legally have one carton of out-of-state cigarettes in his car while in the state, a Marylander transporting more than two packs of out-of-state cigarettes is committing a felony punishable by up to two years in jail and a fine of $50 per carton.
And the temptation will surely be strong for smokers in Maryland’s Washington suburbs who are close to Virginia home to the nation’s lowest cigarette tax at 2.5 cents per pack.
Discount Cigarettes on Columbia Pike in Arlington already has lots of Maryland customers and expects to draw even more, manager Debbie Kale said yesterday.
“I’ve been telling all my Maryland customers the tax is going to a dollar,” Miss Kale said.
Across the Potomac, Kris Katagi, who sells cigarettes at News Express in Gaithersburg, said he doesn’t expect to see a large change in tobacco sales today.
“We’ve already raised the price about 10 cents, and what I hear is they all complain about it, but they come right back the next day. They don’t want to stop,” Mr. Katagi said.
Agents will be increasing enforcement efforts in Maryland to keep up with an expected increase in smuggling, said Michael Golden, spokesman for Comptroller William Donald Schaefer.
“We’re not going after people who buy a carton or two for personal use, but those who are trying to profit illegally,” Mr. Golden said.
Transporting more than the legal limit of out-of-state cigarettes also subjects the vehicle that is used to confiscation.
Possessing more than the legal limit of out-of-state cigarettes is a misdemeanor in Maryland with a maximum penalty of a year in jail and a $1,000 fine.
And cheaper out-of-state cigarettes are within a 40-mile drive of most Marylanders.
While the District taxes cigarettes at 65 cents per pack, taxes are 17 cents in West Virginia, 24 cents in Delaware and 31 cents in Pennsylvania.
During the past four years, tobacco taxes have risen in Maryland and other states as anti-smoking lobbyists have promoted high levies as a means to curb smoking, particularly among young people.
However, evidence about whether higher price deters smoking is mixed.
“Some economists do claim it reduces some teen smoking, but if there’s an effect at all, it’s among older teens” who choose to spend their limited income in other ways, said Devon Herrick, research manager at the National Center for Policy Analysis.
Proponents say a 30-cent increase in the tax in 1999 helped cut smoking among 10th-graders in Maryland by 30 percent.
Anti-smoking advocates won the 1999 tax increase by making the proposal an issue in the 1998 statewide election and planned to repeat the strategy to persuade Maryland lawmakers running in November.
But faced with a tight budget, legislators seized on the proposal early to pay for a massive increase in state aid for education.
Critics note that the higher cigarette tax will not fund planned increases in education aid if the tax succeeds, as proponents predict, in decreasing cigarette sales and use.
They also argue that Maryland will lose tax revenue because people will buy their cigarettes, and do some other shopping at the same time, in neighboring states where tobacco taxes are lower.

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