Rhode Island Weighs Highest U.S. Cigarette Tax

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Rhode Island Weighs Highest U.S. Cigarette Tax

PROVIDENCE, R.I. -- Lawmakers in Rhode Island may vote to raise the state cigarette tax by $1, making it the highest in the country, according to a report on MSNBC.com.

House lawmakers planned to vote Wednesday afternoon on a bill that would raise the state's cigarette tax to $3.46 for a pack of 20 cigarettes, a tax hike intended to help close a massive budget state budget deficit, the report stated.

If passed, Rhode Island's cigarette tax would be 71 cents more than the current highest state: New York.

Massachusetts Gov. Deval Patrick raised his state's cigarette tax last year in response to a budget crisis, while similar proposals are pending in Connecticut and Maine, MSNBC.com reported.

"It's going to hurt our business," Kirit Mehta, who helps run the Sunnymart convenience store his wife owns in North Smithfield, said in the report. He estimated at least 80 percent of his customers come to buy cigarettes and little else as the economy worsens. "They buy cigarettes, they go. They buy water, they go," Mehta said. "They don't look around anymore because of the recession."

Gov. Don Carcieri, a Republican, first proposed raising the tax last month as part of a budget plan intended to close a $357 million shortfall for the year ending in June, and besides raising the cigarette tax, he wants to balance the budget by making big cuts in funding for cities and towns, selling state land, increasing taxes on insurers and delaying a $10 million settlement over a lawsuit in a nightclub fire that killed 100 people, the report stated.

Additionally, Carcieri originally wanted to eliminate mandatory price markups so Rhode Island retailers near the Massachusetts border could still sell cigarettes at a cheaper price than their competition in the Bay State, according to the report.

The version backed by Democrats would keep the price markups, making the cost of a pack of cigarettes about equal with Massachusetts, according to projections by the state Department of Revenue.