Cigarette tax hike would hurt convenience stores
To the Editor:
Governor Gina Raimondo has introduced a budget for FY 2018 that claims to promote business growth and help the lowest earning Rhode Islanders by increasing the minimum wage. Those are laudable goals, but in reality if her budget is enacted, it will actually hurt some of Rhode Island’s smallest existing businesses, like ours, while also hurting many of the citizens she seeks to help with a wage increase.
Time and again, Governor Raimondo and past governors have sought to hike the cigarette excise tax to raise new revenue. This year, the governor wants a 50-cent per pack tax hike to raise $8.7 million to pay for things such as outdoor recreation projects. But in reality, such a tax hike is shortsighted and unfair and will have negative consequences on those that can least afford it.
Cigarette sales are the top revenue generator for convenience stores like ours, and account for nearly 32 percent of all convenience store in-store revenue, according to the National Association of Convenience Stores. Here in Rhode Island, nearly 60 percent of all convenience stores are locally owned and play a very important role in the economy and provide jobs. We know firsthand that every time the cigarette tax goes up, the number of people coming into our stores goes down. And many of those sales simply go to Connecticut and Massachusetts where cigarettes are cheaper. We lose not only cigarette sales but also the sales of other convenience items like snacks, milk and bread. And when we lose sales, we are faced with the difficult choice of cutting jobs and/or hours of our hourly employees. Incidentally, tax paid cigarette sales in Rhode Island have declined by 3 percent a year for the last ten years.
Additionally, based on data from the Centers for Disease Control and Prevention, 27 percent of Rhode Island adults who earn less than $15,000 are smokers, while 10 percen of adults who earn more than $50,000 are smokers. That means those who would benefit from the governor’s minimum wage increase would be hurt the most by a cigarette tax hike. That’s not fair. Furthermore, why should those people who can least afford a cigarette tax hike be responsible for footing the bill for recreation programs that are enjoyed by all Rhode Islanders?
This is a tax hike that doesn’t make sense, and doesn’t add up. We urge the General Assembly to reject the Governor’s proposal to increase the cigarette excise tax.
Harss Express, Warwick
Sam’s Food Store, Warwick
City Line, Cranston
Al-Mall Daily Mart, Cranston
Gulf Express, Cranston