Governor Mark Parkinson has recommended increasing the state cigarette tax from its' current rate of 79 cents per pack to $1.34 per pack, an increase of 55 cents.

Americans For Prosperity has issued the following bullet points addressing how the proposed tax increase would harm Kansas retailers. In addition, the following AFP website will be up and running soon and is devoted to the cigarette tax increase proposal. Please visit www.stopthewaronsmokers.com next week to find out more information.

• Tobacco sales are important to Kansas retailers. Convenience stores on average count on sales of tobacco products – and the sundry items smokers typically pick up while buying cigarettes -- for 34 percent of sales.

• Kansas stores already experienced a 35 percent decline in cigarette sales in FY 2008-09. A large tax increase in 2002 has gotten many shoppers in the habit of crossing the border to lower- tax states like Missouri. Others are purchasing cigarettes from Internet sites and Native American reservations. A 55-cent tax increase will only encourage more such behavior, as well as “black market” dealing by people who drive to Missouri to purchase large quantities of cigarettes, then resell them in Kansas.

• Tobacco sales support Kansas retail jobs. It is estimated that nearly 1,400 retailer and wholesaler jobs are supported by in-state tobacco sales. When sales decline, store owners are forced to make difficult decisions like cutting employees’ hours or eliminating jobs altogether.
It is estimated that 220 jobs would be lost with a 55-cent tax hike.

• Kansas retailers responsibly enforce age limits on cigarette purchases. Unfortunately, it is very easy for under-age smokers to buy cigarettes from Internet sites and black market dealers.

• A tax hike will put Kansas at an even greater disadvantage to Missouri and other states. After a 55¢ tax hike, the Kansas tax would be $1.34/pack -- about 8 times greater than the 17¢ tax in Missouri. Kansas consumers could save a whopping $11.70 per carton in Missouri. Because 33 percent of Kansas’ population lives along the Missouri border, this is a serious threat. In fact, Kansas’ cigarette tax would be higher than all of its bordering states.

• Kansas stores are already suffering, thanks to a sour economy and a federal cigarette tax increase in 2009. A 55-cent cigarette tax increase in 2010, combined with the federal tax increase, would cause an additional projected 25 percent drop in sales for Kansas retailers.

• Gross profits lost to Kansas retailers and wholesalers would exceed $20 million.

• Kansas’ cigarette tax is discriminating against the blue-collar workers. Tobacco tax increases are aimed squarely at those who have the least political power. The CDC reports that nearly 44% of all Kansas “every-day” smokers have incomes below $25,000 per year. Only about 9% of Kansans with incomes above $50,000 are every-day smokers .