del cigarette tax worries retailers

Proposed 60-cent increase could threaten out-of-state business.

Retailers in Delaware are preparing for a debate over a proposed 60-cents-a-pack increase in the cigarette tax–a tax lawmakers expect to be approved this week, stating it’s for the greater good of the state.

“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,” state Senate Majority Leader Anthony J. DeLuca, D-Newark East, told The News Journal. Another proposed use for the new income will be to help disabled Medicaid patients work full-time jobs without losing some benefits.

Of course, local retailers worry that the bill could damage their businesses. This is due to the reputation the state has developed as a cheaper haven for smokers in neighboring states. If the increase were approved, smokers from Maryland would pay only 2 cents less per pack, on average, in Delaware than they would if they stayed home to purchase cigarettes. Pennsylvania and New Jersey cigarettes would still cost 50 cents to more than $1 per pack more, according to an analysis provided to state lawmakers.

“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,” Maureen Bradley-Waritz, who manages a First State Cigarette Outlet near New Castle, Del. told the paper. “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.”

While the 60-cent tax was deliberately proposed in order to maintain that the state’s prices stay lower than its neighbors, many fear that rising gas prices may deter customers from coming over the border for potentially minimal savings.

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