Alabama hiked the tax on cigarettes this year, but it doesn’t seem to be affecting smokers’ behavior.
On Sept. 17, Gov. Robert Bentley signed Act No. 2015-535 into law and raised the tax on a pack of 20 cigarettes from $0.43 to $0.675. The price hike took effect on Oct. 1.
Alabama’s tax is now more than 30 cents higher than Georgia’s statewide rate of 37 cents per pack. The retail price is affected by other things like store markup, but the tax is still a factor.
The price of a pack of Marlboro Red cigarettes was $6.35 at the Marathon Gas at 410 Martin Luther King Jr. Parkway in Phenix City. That same pack cost only $5.46 at the Circle K at 1445 Veterans Parkway in Columbus.
The effect on smokers’ behavior, however, seems to be minimal. In a strictly unscientific survey of several convenience stores and gas stations close to the Chattahoochee River, employees said they had not seen any noticeable shift in their businesses.
Rhonda Montalbo, manager of the Bizzy Bee Mart at 2100 Crawford Road in Phenix City, said her customers were not changing their behavior.
“Just a lot of fussin’,” Montalbo said. “A smoker is going to pay what they are going to pay for the convenience of wherever they are.”
Christine Mudd, who manages the Circle K at 215 4th Street in Columbus, said she hadn’t seen many new faces at her store, though she’d heard customers discuss the tax hike.
Kenneth Justice, the manager of Justice Food Mart at 1403 11th Ave. in Phenix City, said he’s less worried about the higher tax than he is about bootleggers who resell packs by the cigarette.
“Cigarette smokers don’t go that far to buy their cigarettes unless they’re buying in bulk,” said Paresh Patel, manager of the Liberty gas station at 400 3rd Ave. He said he has not seen a lot of new customers either.
Patel pointed out that the cost of a pack of cigarettes is more than its retail price. It may not be worth spending the time, effort and gas to cross the river just to save money on a single pack.
Frank J. Chaloupka, professor of economics at the University of Illinois at Chicago, said changes in behavior from new cigarette taxes take a long time to become noticeable. It may be too soon to measure any significant change just weeks in.
Alabama Arise executive director Kimble Forrister said legislators and interest groups expected little change from this hike.
Forrister said a tobacco industry lobbyist was present during committee hearings over the tax increase and told Alabama legislators a 25-cent increase was acceptable.
“If you keep the tax increase as low as 25 cents a pack, it’s not gonna affect behavior that much,” Forrister said.
Alabama Arise supported a higher tax increase for its beneficial health effects, according to Forrister.
A review of studies on cigarette taxes found that raising cigarette prices made low-income families more likely to quit buying them. Any decrease in smokering is a financial and health benefit to Alabama, Forrister said, especially if it saves money with Medicaid.
“It should be at least 55 cents, preferably a dollar,” Forrister said. “That’s going to be a fight for another day.”
Why it’s a highlight:
This story was featured on the front page, above the fold for the Ledger-Enquirer for Oct. 19, 2015. We also wrote an editorial about the issue. I’m proud of this story because of the reporting involved and how it localized a state story.