Tobacco Documents Online

TW+.~E ASSEMBLY S T A T E 0F N E W 1^ O' RI K ALBANT` EO1MAFt0 H. LEHNER' MEINB~ER~ OF~ ASSE.kf®~UY~~ WASHINGTON, HEIGHTS~ iN~WOOD 6'~ MARBLE HILI~. ~ ~ COMMU~.N'ITY OFFICE , AG'16 ®~ROAOw.Arv2'O'~AT'» ST.1 . N/EW~ YORK~...N:. Y: 10034 k:'4 ., ... .' 1262~ra.2-,oas Governor Hugh L., Carey Executive Chamber Albany, New York 122'2'4 July 14, 1978 Re: Cigarette Tax Reduction Dear Governor Carey: CHAIRMA~H~. CO~M~MiTT'EE O~.N ~OUS,NG~ During the current special session you have pilaced'ion the agenda a bill PA17 )'to~ reducecigarette, taxes intheSttate of New York. This bill is similar to a bill introduced by _ Assemblyman Siegel and passed by the Assembly on the last night of our regular session. Because of certain concerns which havee recently been brought to my attention on this subject, on which quite frankly I aminot an expert, I have recently done some re- search and had discussions~ with~ vairiousStateofficialswho, administer the cig,arette tax. As a result I have concluded that the tax reduction aspect of the bill is the wrong approach to the solution of the bootlegging, probilem. I am informed by the Cigarette Tax Enforcement Office by 1 cent per pack would reduce revenues by approximately $90 m~illiondol]Jars, annually. I am further informed by the Enforce- York, the amount is $7'0 million dollars. Therefore, eliminat- ing the~~ C~ity~ ta~xof 8~ cen~tsper pa~ck~ a,ndireducing the~ State tax~ basis are about $2'601million dollars while for the City of New that revenues from the cigarette tax for the S'tate on aniannual W loss due to bootleggingi. ~j ment Office that the loss of tax revenues through bootlegging is estimated at betweeni$75a'nd $100milliion dollarsannually., Thus, it would appear that the revenue lo'ss from the tax re- dcution is approximately equal to or greater than the revenue. GJ If the foa'eani n" f i aiirn_-, arFy roaGnnak,l v ac-ciivat-w'- i'+- C!T ~ . would' seem to me, that a preferabl'e manner of solving the C~J problem ~ wo~~u,ld;ibe in~crea~sed~ appro~~pr~Ya~tions~~ for~ enforcement and 2y~ certain changes in our law to enable State officials to more easily obtain compliance. T~h~ere~£~ore, I propose (1) an appropri- ation o~f~ approximately $~2'~ inillio~~n dollars iniaddition~a~l enforce- ment manpower, (2) enactnient of the licensing provisions contained' in the~, ~ bill, and ('3')~~ enactment of~ a]law~~ re~qu~~iir~i:ng cigarette manufacturers to place a label on the cigarette package which states: "'Far Sale in Now~ Y~o~r~k~ S~tate"' a~nd'~ indicates ~~ the date O

of packaging. ~~ In view o~f~ mYconclusions~,~ shou~ld t~h~e~~ aforesaid bill again come for~~ a vote, on th~e~ flo~o~~r~ of~~ th~e~~ Assembly it ismy~~ current intentio to move to amend the bill to delete the sections calling for the elimination of the City tax'andi the reduction in the State tax and to substitute the following, languag,e, " All cigarettes packaged subsequent to October first, nineteem hundred seventy-eight for sale in the State of New York shall contain a mark- ing on the package in a panel at least one square inch in size stating 'For Sale in New York State'. Also, the month of packaging shall be indicated on said'panel." Such a labeling provision would be enforceable in the same m~anne~ras~ the~Staite of' NL-wY©rkpr•oh~ibitsthesaleof new automobiles in the Staite unless they contain certain safety devic~es~providedbyState law. I think further that,through advertisingithe State should'encourage smokers not to buy -- bootlegged cigarettes. The labelingidevice combined with the date of'packaging, which lets the consumer know that he is not buyings~taletobacco,,may'discouragethesaleof b~ootlegged d cigarettes.. Further, reduction in taxes will encourge smoking,.. Iniview of' the Surgeon Ceneiral "s conclusions with, respect to the danger of smoking, I think State policy should not encourage additional smoking by lowering taxes. Finally, there is nothing in the legislation proposed that would prevent ani increase in prices by the industry which increases w©uld~re- sult inithecontinuation ofthe opportunitiesfar bootleggin~g.Last year the legislature was besieged with expensively printediliterature from an organization known as "The C'itize s Committee Against Bootleg Cigarettes". The goal of this Committee was to reduce the tax on cigarettes as a means of preventing revenues from bootlegged cigarettes from being obtained by criminal elements in our society. It developed that this organization was apparently financed almost solely by Lhe cigarette industry. Although I recognize the good faith attempt by Ass~emblymanS~iegel and your Administration to solve a very difficult problem,, I would respectfully urge that we put off. the tax reduction proposal until it could be seen whether the proposals I have outlined can work in a more satisfactory O w Ga C!T' C Cj CW

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