LI tobacconists: Tax hike could shut us down

Long Island tobacconists say the last tax hike on cigars and non-cigarette tobacco products nearly crippled them, but the governor's latest proposed increase could shut them down forever.

"We are fighting for our businesses and our lives," said James Mantione, who owns Jim's Smoke Shop in Patchogue and Mount Sinai with his wife, Teresa. "We want to pay our taxes, but at a 90 percent tax rate, who would buy anything I have to sell?"

Mantione Wednesday joined other tobacconists from Long Island and across the state to persuade legislators to kill a proposed measure by Gov. David A. Paterson to raise the tax on tobacco products, such as cigars, pipe and chewing tobacco, from 46 percent to 90 percent of the wholesale price.

Unlike retailers who sell cigarettes, smoke shop owners - who number more than 25 on Long Island and about 300 statewide - note that they don't have other items, like food, to sell.

"If the state makes the mistake of raising the . . . rate to 90 percent, I can't see more than a handful in the entire state being able to hang on," said George Brightman, managing partner of J Barbera Tobacconist in Garden City.

The governor's budget office, however, said the main issue is health. "If we are going to increase the cigarette tax without also increasing the tax on non-cigarette tobacco products, you may have other people who are smokers switching to those other products, which, like cigarettes, can be hazardous to your health," said spokesman Erik Kriss.

But tobacconists, who also have launched a petition against the increase, view smoking cigars as a relaxing social activity, an affordable luxury - distinct from a cigarette habit.

"This is a lifestyle thing and not something where every few hours you need to go outside the building and light up," said Ron Melendi, president of the New York Tobacconist Association.

Assemb. Charles Lavine (D-Glen Cove), state Sen. Craig Johnson (D-Port Washington) and state Senate Minority Leader Dean Skelos (R-Rockville Centre) are not in favor of the proposal, but its chance of passage is unclear.

"We recognize the difficult economic climate for small businesses and are working hard to control spending and provide tax relief," said Austin Shafran, spokesman for the Senate Majority Conference. "However, this legislation is being considered as a potential revenue raiser for the state, which also has a sound public safety impact."

Many of these shops are struggling, with some seeing a 30 percent drop in sales following last year's tax increase on non-cigarette tobacco products, from 37 percent to 46 percent, Melendi said. Customers are buying from the Internet and nearby states, such as Connecticut and New Jersey, with lower tax rates, owners said. Pennsylvania has no tax on tobacco products, except for cigarettes and small cigars. Ultimately, tobacconists predict a "lose-lose" situation.

"If we are going to go out of business, they are going to collect zero," Teresa Mantione said.