Ohio one of 10 states that raised cigarette taxes this year.

CINCINNATI (AP) - Ohio's 70-cent-a-pack spike in cigarette taxes Friday put the state among 10 that are turning to tobacco this year to pay for state services in tight budget times.

Ohio's increase that made many packs about $5 hit smokers hard.

"I won't pay over three bucks for a pack of smokes. I'll quit before that," ad salesman Kurt Kaufman, 36, of Cincinnati, said the day before the increase took effect. "Of course, I said the same thing about two bucks a pack."

A new round of increases also went into effect in Virginia, Washington and New Hampshire, raising revenue mostly for health care and education. The American Cancer Society said Alaska, Colorado, Oklahoma, Montana and Kentucky have increased taxes this year, and an increase in Maine will start in September.

Ohio also joins 18 states that levy a tax of at least $1 a pack. Ohio's is $1.25. The new revenue has not been earmarked, but goes to the state's general fund.

The state estimates the increase will generate an additional $505 million in the fiscal year that started Friday, but drop back to $425 million the following year.

The difference between the two years is that tax must be paid on all cigarettes now in stock.

Anti-smoking groups say the increases keep kids from smoking.

The Campaign for Tobacco-Free Kids contends that this year's tax increases will prevent more than 250,000 minors from starting to smoke, encourage adults to quit and save more than $5.5 billion in long-term health costs.

"Cigarette tax increases continue to be a win-win-win solution for states - a health win that reduces smoking and saves lives, a fiscal win that raises much-needed revenue and a political win that is popular with voters," said William Corr, executive director for the Campaign for Tobacco-Free Kids.

The annual cost of Ohio-bought cigarettes for a one-pack-a-day smoker jumped by $255.50 on Friday. At two packs a day, a smoker would pay an extra $511.

That's why Kaufman and many others buy cigarettes elsewhere.

"This is going to be big for Kentucky," said Jeff Fischer, owner of One Stop Liquor & Tobacco in Bellevue, Ky., just across the Ohio River from Cincinnati.

A pack of Marlboros sold for $3.84 at his store on Friday. At a Super America station in Lawrenceburg, Ind., a popular southwest Ohio destination because of its gambling boat, Marlboros were $3.05.

At a Stop-N-Go convenience store in Cincinnati, they were $4.84.

"I'll probably be quitting soon," said Loretta Bruzgulis, a graphics design manager and pack-a-day smoker who remembers when cigarettes cost 60 cents a pack total.

Fischer said Kentucky's 27-cent-a-pack increase hasn't affected sales, but he has had to beef up security.

"People were grabbing cartons and running out the front door," Fischer said. "That's what higher prices are doing."

Mike Gowrylow, spokesman for Washington's department of revenue, said that state's 60-cent increase will help balance the budget and should raise about $88.5 million a year for education.

At $2.02? a pack, Washington's tax is third highest in the nation. With it's historically high tax, the state has lost tax revenue to cross-border shopping, Indian smoking shops and Internet sales, he said.

"One out of three cigarettes smoked in Washington is contraband," Gowrylow said.

Kristy Smith, a spokeswoman for the Virginia department of taxation, said that state's 10-cent increase is expected to raise $98.5 million a year to pay for health care for children from low-income families, the elderly and disabled.

"There wasn't necessarily a (budget) hole, but this will allow us to make investments in public safety and health care," Smith said.

Virginia had a 17.5-cent increase just a year ago, but even with the additional dime on Friday the excise tax is low at 30 cents a pack. Smith doesn't expect the increase to hurt sales.

Before its increase, Kentucky's tax was just 3 cents a pack. It's still a nickel in North Carolina, and 7 cents in South Carolina. Rhode Island is most expensive at $2.46 a pack - unless you consider the combined $3 a pack assessed by the state of New York and New York City.

(Copyright 2005 by The Associated Press. All Rights Reserved.)

4 July 2004