Regional Update: The Northeast

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Regional Update: The Northeast

By Hank Behar

ALBANY, N.Y. -- New York state's raising excise taxes on cigarettes 83 percent, from $1.50 a pack to $2.75, has proved to be self-defeating, according to the New York Association of Convenience Stores.

NYACS blames the tax increase for a steep plunge in cigarette sales during the three months ending August 31, 2008, compared to the same period last year. The decrease amounted to 5.5 million fewer cartons sold, with buyers not only going to Native American stores to buy their cigarettes, but also fleeing to neighboring states where taxes are lower, or turning to the Internet or even the black market for their smokes, NYACS said in a press release.

"In addition," said James Calvin, president of NYACS, "whenever a smoker buys a pack of cigarettes tax-free, the state not only loses $2.75 in excise taxes, but licensed small businesses are deprived of a legitimate sale, anti-smoking efforts are impeded, and those who ignore tobacco taxes and regulations are rewarded for defying the law. We urge the governor to act now to stop untaxed sales of cigarettes in New York State."

In Maine, gasoline retailers are adapting to new renewable fuels mandates, as Maine's refiners and wholesalers are required to sell 10 percent of their volume as renewable fuels, according to Jamie Py, president of the Maine Oil Dealers Association (MODA), based in Brunswick.

The state's petroleum retailers are being supplied only E-10 at the terminals, Py said, noting the Energy Independence and Security Act of 2007 mandated that renewable fuels, such as ethanol, be phased in throughout the nation, starting in 2008 at a rate of 9 billion gallons a year, rising to 36 billion gallons in 2022.

Py is confident that MODA’s membership, which covers 1,000 of Maine’s 1,300 petroleum retailers, is aware of what to do to comply with the law, which includes an average expenditure of $2,000 a station to adapt the equipment to handle ethanol blends.

"What I'm worried about," says Py, "is that some stations, especially the smaller ones that do not belong to MODA, may not have been getting communications on the mandate. So I hope all station owners take the steps necessary to handle E-10."

There have been some problems in other parts of the country with flex pipe installations that were not designed to carry ethanol blends, Py noted. "These pipes, from one particular manufacturer, were laid down about 15 years ago," relates Py, "and now the EPA and state DEP [Department of Environmental Protection] are concerned about that pipe breaking down from the effects of ethanol. It can cost between $30,000 and $40,000 for a station to dig up the pipes and replace them."

"Though we haven’t seen it happening in Maine, we have to be ready for it. It's going to be a big burden for some stations, so we're looking into the state revolving UST loan fund to help smaller dealers with loans and grants to offset the upgrade cost."

In Pennsylvania, retailers are expecting the The Employee Free Choice Act (EFCA), also called the Check Card Act, which passed in the House of Representatives in 2007, to gain ground in 2009. The bill would allow employees to create a union by signing up the majority at a worksite using authorization cards, rather than through secret ballot. These cards would be open to scrutiny by other workers and union officials, with all the consequences that would follow, including the possibility of employee intimidation, critics charge.

The bill also would amend collective bargaining law to allow a union, after a 90-day negotiating period, to ask for federal arbitrators to set the operating terms of a functioning labor contract.

Randy St. John, senior vice president of the Pennsylvania Food Merchants Association (PFMA), declares the Check Card Act "the number-one legislative issue to be addressed at the federal level, closely followed by interchange fees."

"If those in favor of this law have any possible misgivings about their position," notes St. John, "let them look to George McGovern, the legendary friend of organized labor, who was quoted in the Wall Street Journal on August 8, 2008, as saying that this is a horrible and undemocratic piece of legislation."

In other news, the Pennsylvania Petroleum Marketers and Convenience Store Association is letting the world know that its annual Fall Energy Conference and Annual Meeting is scheduled for September 21-23 at historic Gettysburg, Pennsylvania. More information can be found at

The New York Association of Convenience Stores has scheduled its NYACS Trade Show/Convention for May 13-14, 2009, in Syracuse. Go to