Raising Virginia’s cigarette tax by $1 per pack would bring in $317.7 million in new annual revenue to help close the state’s budget shortfall, according to the Campaign for Tobacco-Free Kids and other health groups.

Increasing the tax in Virginia also would prevent 65,100 children from becoming smokers; spur 34,100 current adult smokers to quit; save 29,800 residents from premature, smoking-caused deaths; and save $1.4 billion in health care costs, the report said.

Virginia’s cigarette tax is 30 cents per pack, which ranks 49th in the nation. The national average is $1.34 per pack.

Nationally, increasing cigarette taxes by $1 a pack would raise $9.1 billion in revenue annually.

Tobacco makers oppose higher taxes after a 62-cent-a-pack increase in U.S. taxes last year hurt demand for cigarettes made by Altria Group Inc., the largest producer, Reynolds American Inc. and Lorillard Inc.

“Cigarettes are already extremely heavily taxed” and taxes “inflict long-term pain on all taxpayers, not just smokers,” said Bill Phelps, a spokesman for Henrico County-based Altria.
Web site holding job seekers’ contest

In celebration of its one-year anniversary, RichmondJobNet.com is running a contest for job seekers to win personal career counseling valued at more than $1,500.

Run by the Greater Richmond Partnership, the Web site for job seekers, employers and entrepreneurs now also includes career-focused blogs, a career assessment tool and a job search function. The site also offers RichmondJobNet Radio, a collection of interviews with authors and experts available as podcasts.

To be eligible for the contest, you must be at least 18, actively seeking employment and live in Richmond or the counties of Chesterfield, Hanover and Henrico. An explanation, in 150 words or less, of what you need the makeover is required. The contest runs through Feb. 26.
THE NATION
Citigroup launches new foreclosure plan

Citigroup Inc. plans to let homeowners on the verge of foreclosure stay in their homes for six months — if they turn over the deed to their property.

Citi is launching the pilot program, dubbed “Foreclosure Alternatives,” this week in Texas, Florida, Illinois, Michigan, New Jersey and Ohio. Initially, about 1,000 homeowners are expected to participate. It may expand the program nationwide.

In a normal foreclosure, a lender assumes legal control of the property and evicts the homeowner. But Citi’s program, like other “deed in lieu of foreclosure” efforts, allows the homeowner to avoid a completed foreclosure. While the owner must still leave the home after six months, the program results in a less severe hit to the borrower’s credit score.
Google Inc. to build Internet networks

Google Inc. plans to build a handful of experimental, ultra-fast Internet networks around the country to ensure that tomorrow’s systems can keep up with online video and other advanced applications that the search company will want to deliver.

The Google project, announced yesterday, also is intended to provide a platform for outside developers to create and try out applications that will require far more bandwidth than today’s networks offer.

The company said its fiber-optic broadband networks will deliver speeds of 1 gigabit per second to as many as 500,000 Americans. The systems will be many times faster than the existing DSL, cable and fiber-optic networks that connect most U.S. consumers to the Internet today at speeds typically ranging from 3 megabits to 20 megabits per second.

By Staff Reports, Timesdispatch

RALEIGH, N.C. — For years, buying low-tax North Carolina cigarettes and selling them on the black market in a high-tax state up north has been an easy way to make big money for criminal enterprises.

Load up a van of Camels or Marlboros and reap a $100,000 profit to sell them if the destination is New York City, which has a $1.50-per-pack excise tax in addition to the $2.75 state cigarette tax.

“The cigarette tax evasion stampede is out of control,” said Jim Calvin, president of the New York Association of Convenience Stores. More than half of cigarettes purchased in his state are bought without paying state or local taxes, largely because of out-of-state smuggling and Internet sales.

Catching people with North Carolina contraband is difficult because it’s one of three states that don’t require tax stamps affixed on every pack being sold.

Interest in restoring the stamps after a 16-year hiatus has been revived as a way to deter smuggling from North Carolina – and in an ironic change – into North Carolina. The state now may be the target for cheaper cigarettes from South Carolina, which has a 7-cent-per pack tax and doesn’t use stamps. North Carolina’s 45-cent tax has grown nine fold since 2005, creating a cross-border difference of $3.80 per carton.

“We’ve only been at a tax disadvantage since the tax went up in the past couple of years,” said Gary Harris with the North Carolina Petroleum and Convenience Marketers Association.

Stamps provide evidence the wholesaler has paid the state tax before packs are shipped to retailers. Black-market vendors have a harder time selling stamped packs because they can’t easily hide their origin or must try to replace the stamp with a counterfeit from another state. North Dakota is the only other state without stamps.

In 2002, a federal jury in Charlotte convicted two Lebanese citizens of diverting millions of dollars in cigarette smuggling proceeds to the radical Islamic group Hezbollah by shipping North Carolina cigarettes to Michigan for resale. Another grand jury indicted nine people in November for a smuggling operation that prosecutors alleged reaped at least a $5 million profit.

“Criminal organizations all over the country exploit variants in state excise taxes and tax stamping laws to generate millions and millions of dollars in illicit profits,” said Sandy Sands, a lobbyist representing Philip Morris USA, which wants the stamps restored. “We’re not talking about the people that come down and vacation at the beach and take eight or 10 cartons home with them to Ohio and Pennsylvania.”

Lawmakers studying the issue over the past month in a revenue law committee sound interested in restoring the stamps first used in North Carolina in 1969, when lawmakers approved its first 2-cent tax on cigarettes.

The General Assembly eliminated the stamps in 1994 because the 3 cents per carton tax wholesalers got to keep for administrative expenses was hardly enough to defray the costs of sticking them, said Sands, a state senator at the time of the repeal.

Today, wholesalers receive a 2 percent discount – about 9 cents per carton – to help with filing monthly revenue reports to the state. But they’re concerned that won’t be enough if they’re required to stamp again.

Stamping machines can cost $80,000 each, said Sonny Wooten, president of Southco Distributing Co. in Goldsboro, and additional employees may have to be hired. Large retailers who act as their own wholesalers don’t want their costs raised during a recession.

Wooten said a 4 percent discount may be enough. Otherwise, the extra cost is eventually passed on to consumers, said Andy Ellen with the North Carolina Retail Merchants Association.

Doubling the discount could take away several million dollars away from the state’s coffers, months after the General Assembly raised the cigarette tax by 10 cents a pack.

Add word from legislative researchers that the state actually would lose another $5.4 million in annual tax revenues with stamps at the current 2 percent discount – and spend $1.2 million every year to run the program – and some lawmakers are sure to have second thoughts during tight budget times.

The analysis found the stamp requirement would discourage cigarette smuggling out of North Carolina, estimated at 18 million packs this year.

While lawmakers want more information about the bill before the session reconvenes in May, many suggested curbing smuggling was the priority.

“I’m beginning to look more favorably at the bill,” said Rep. Bill McGee, R-Forsyth, a former R.J. Reynolds Tobacco Co. employee. “It doesn’t raise taxes, it only helps us to collect the taxes that were due us and it would prevent some of this other untoward activity.”

An Oregon Senate committee tomorrow will hear public testimony on a bill that would give local governments authority to tax tobacco and cigarettes.

Multnomah County officials are seeking that authority to raise money for county health and human services, discourage teenagers from smoking and reduce smoking-related health costs, said Deborah Kafoury, member of the Multnomah County Board of Commissioners.

The House narrowly passed a similar bill in the last session, but the Legislature adjourned before the bill reached the Senate floor.

The proposal, Senate Bill 1042, would lift a ban against local governments taxing cigarettes and tobacco. If the 2010 Legislature passes it, Multnomah County will begin having public hearings on a county tobacco tax, Kafoury said. County leaders want to settle on a tax that is high enough to have impact without being so high it sends smokers across county lines in search of cheaper cigarettes, she said.

One figure that’s come up has been a tax of 25 cents per pack of cigarettes, which would raise between $7 million and $9 million a year, she said. Commissioners are confident Multnomah County residents would support the tax, Kafoury said, because they voted in favor of a 2007 measure to increase the state’s cigarette tax by 85 cents a pack to pay for children’s health insurance.

That initiative, Measure 50, failed statewide by a 3-to-2 vote after cigarette companies spent $12 million on a campaign to defeat it. They will try to defeat efforts by Multnomah County to tax tobacco, too, Kafoury predicted.

“The only opposition to this bill is the tobacco companies,” said Kafoury, who plans to testify at the 1 p.m. hearing Friday before the Senate Finance and Revenue Committee.

By Bill Graves, The Oregonian
February 04, 2010

Pennsylvanians got a raw deal last week when Cigars International showed off its new $10 million distribution center in Bethlehem.

Cigars International, on the other hand, got a great deal.

Last year, state legislators passed a new tax of 25 cents on each pack of cigarettes but killed a proposed cigar tax.

The cigar tax died largely because of the admitted work of Sen. Pat Browne, R-Lehigh, and more than $500,000 of lobbying by the tobacco industry. Of that lobbying money, $32,000 came to Harrisburg from Cigars International.

Today, that $32,000 investment is paying off handsomely in a tax break for Cigars International while costing Pennsylvanians millions in lost tax revenues and increased tobacco-related health care costs.

If the cigar tax had passed, every cigar sold in Pennsylvania would have been subject to an additional $1.60 tax. Because Pennsylvania hosts four of the nation’s eight cigar sellers, that tax would have generated millions of dollars in badly needed revenue for Pennsylvania.

But Sen. Browne and his colleagues apparently think the state doesn’t need that money. Or perhaps the senator and his colleagues are OK with providing a nice return on Cigar International’s $32,000 investment in pushing for no taxes.

So what is Pennsylvania getting in exchange from Cigars International? Cigars International is adding a whopping 50 new jobs to a state with more than a half-million unemployed people.

So instead of tax revenue, Pennsylvania is reinforcing its national reputation as a tax haven for cigar companies that already cost taxpayers millions in tobacco-related health care costs.

Products from tobacco companies like Cigars International cause emphysema, asthma, chronic obstructive pulmonary disorder, cancer and other serious diseases, all of which drive health care expenses up and productivity down. Pennsylvania alone spends $5.1 billion annually on health care costs linked to tobacco-related diseases.

Pennsylvania already taxes cigarettes, and cigars can be even more deadly. Not only are most cigars unfiltered, but a single cigar can contain as much tobacco as an entire pack of cigarettes and take up to two hours to smoke.

Gov. Ed Rendell is scheduled to release his new budget proposal on Tuesday, and he’s expected to include a cigar tax again. This is our chance to start recouping some of the tax dollars Pennsylvania spends on health care and other tobacco-related expenses caused by Cigars International and other cigar merchants.

Call your legislators today. Tell them to quit kowtowing to big tobacco and pass a cigar tax.

And, even if he’s not your legislator, call Sen. Pat Browne too.

Mcall
February 5, 2010