Published: March 31, 2009 06:35 am      

Local stores weigh in on booze, tobacco tax hike

ASHLAND — With no relief expected before the price of cigarettes and alcohol jumps Wednesday morning, Bill Steele at Shamrock Liquors sums up the situation by saying, “It is what it is and there’s nothing we can do about it.”

For Rick Brislin, owner of the First Stop store at the end of the bridge leading from Ohio into Ashland, customers at the drive-through Tuesday were all asking the same question: “How much are they going up?”

Ready with an answer for each, Brislin typically responded, “We should still be $5 cheaper.”

On Wednesday, Kentucky’s tax on a pack of cigarettes doubles from 30 cents to 60 cents. At the same time, the federal tax on cigarettes jumps 62 cents a pack. Also on Wednesday, Kentucky’s 6 percent sales tax on beer, wine and liquor takes effect. The 2009 General Assembly approved the hikes in tobacco and alcohol taxes as part of a plan to erase a $556 million revenue short fall in the budget.

Some brands of cigarettes are expected to increase in cost by $10 per carton, Brislin said. Most premium brands have already jumped in price in a mysterious effort “to help retailers save money,” although Brislin said he hasn’t yet figured out how that was supposed to work in his favor.

Easily 80 percent of the First Stop’s customers are from Ohio, Brislin estimated, noting those customers tend to spend their money on gas, meals and other expenses during their trips to Kentucky. He was hoping for a major run on the cigarettes and other forms of tobacco in the store before he is required to do an inventory Wednesday morning and pay additional taxes on everything in the shop.

“I’m going to sell everything I’ve got. It won’t save me or my customers any money,” he said, citing shame toward the politicians who approved the latest price increase. “Politicians ... they had a cash cow. They’ve slowly been butchering that cash cow. This time, they’ve slit that cow’s throat.”

People who preferred to roll their own cigarettes will notice the most dramatic change in costs, said Brislin, who had the last of his loose tobacco products marked to “at cost.”

“You should’ve seen the customer I just turned away,” he said, explaining a pound of “roll your own” tobacco he had for about $15 a pound will cost $44 or $45 after Wednesday.

“That’s a 3,000 percent increase,” he said, later adding “It’s not going to be feasible for anybody to roll your own. Somebody somewhere paid somebody to get rid of roll-your-own tobacco.”

Adding to the local tobacco and alcohol retail burden, Brislin said he is disturbed the new tax includes the added cost of a 3.5 percent user fee already being paid to the city of Ashland. He predicts the new price increase will cause some people to switch brands and force some older smokers to give up tobacco.

Brislin said the higher cost will likely most affect people on fixed incomes, and he criticized the politicians who made a hasty decision “to take more money out of their pocket.”

Thinking it all over, Brislin remembered his first job selling cigarettes for 35 cents a pack, or $3.50 per carton.

“I don’t know where it’s all going to go, but it’s going to hurt everybody,” he said.

Steele, general manager at Shamrock Liquors, was also angry the city’s fee will be calculated into the price increase for all beer, wine and liquor. The same products will cost less in Lexington and other cities that don’t have Ashland’s 3.5 percent mark up, he said.

Steele said he would like to emulate those who protested by pouring Kentucky bourbon onto the steps of the state Capitol.

“I just want to give it away,” Steele said, citing his displeasure with counting everything in the store and paying additional tax on it.

“The only thing they didn’t really hit tobacco-wise was rolling papers,” Steele observed, quickly adding his “real fear” comes from e-mails he has already received explaining the governor plans to call a special session of the legislature to raise the state’s sales tax from six to seven percent if the pending “sin tax” doesn’t raise enough revenue.

Most of Shamrock Liquors’ customers have limited their questions to “When is it happening and how much is it really going to be?” Steele said.

Tom Salyer, owner of Tom’s Discount Tobacco on U.S. 60 in Cannonsburg, said people have been stocking up on cigarettes and tobacco products for roughly the last month, with a notable increase in demand during the past week.

“You’re looking at $10 a carton,” Salyer said of the increase. “But, until we get a price list on the first, we don’t know the exact prices.”

Salyer, who is a non-smoker along with his two primary employees, said they commonly see people digging for extra or unaccounted for change as they try to pay for their cigarettes. He feels many on limited incomes will be faced with tough budget decisions regarding tobacco.

“You will see people who will do without food or medicine for a month to buy cigarettes,” Salyer said.

Despite his own standing as a non-smoker, Salyer said pricing cigarettes beyond reach is a bad way to get people to give up smoking.

“I don’t believe in attacking smoking like that,” he said. “Education is the way to go.”

TIM PRESTON can be reached at tpreston@dailyindependent.com or at (606) 326-2651.