AUGUSTA (AP) – Farmington market owner Jon Bubier said he had to come up with $10,000 for the state in a hurry the last time the Legislature increased cigarette taxes. He told lawmakers Tuesday he doesn’t want the same thing to happen again.

“You’re hurting small businesses in a dramatic way,” Bubier told the Appropriations and Taxation committees. “We’ve got to do something but don’t tax small business to death.”

Bubier was among business owners and health advocates who gave their diverse views on Gov. John Baldacci’s proposal to increase the present tax of $2 per pack – already one of the nation’s highest – to $3. The proposal also seeks higher taxes on smokeless and pipe tobacco as well as cigars.

Medical and health organizations said the taxes are needed to induce smokers to quit and discourage teenagers from starting at all. The Maine Medical Association’s executive vice president, Gordon Smith, said each pack of cigarettes results in $7 in medical costs.

An anti-smoking coalition said Monday that the dollar per pack Baldacci wants to balance his proposed $6.4 billion two-year budget isn’t enough and raised the ante to $1.50 per pack. Smith and others said tax hikes have a direct impact on the smoking rate, which has fallen from 27 percent in 1990 to 21 percent. Fewer smokers translates into lower state medical and health costs, opponents of smoking say.

But some of those testifying Tuesday were skeptical about reasons given for the proposed increase.

“Are we raising the tax on cigarettes because we’ve got a big hole in the budget or otherwise?” said Gena Canning, a vice president of the Augusta-based Pine State Trading Co., a New England-wide wholesale distributor of food, beverages and tobacco products.

Canning also said smokers are being asked to bear an unfair share of the tax burden. She asked lawmakers whether smokers should carry a larger share of the tax burden than corporate income taxpayers, and also said no other product is taxed so heavily.

Businesses also said the proposed tax will eat into sales, affecting their bottom lines. Some said they never regain the lost sales each time the tax goes up.

Both Canning and Chris Jackson, representing the Convenience Store Council of Maine, said the loss of business to stores across Maine’s border, especially in New Hampshire, is a reality.

Scott Moody of the conservative Maine Heritage Policy Center questioned whether the tax will bring in the full $66 million a year the Baldacci administration anticipates, saying his group’s analysis shows it will be closer to $45 million.

Bubier, owner of Ron’s Market in Farmington, said he’s particularly troubled by the “floor tax” accompanying increases, in which the state gives store owners limited time to pay the increased tax upfront on cigarettes they have in their inventories.

The Maine Coalition on Smoking or Health labels as “myths” claims that the higher tax will send smokers to other states, that it will hurt the state’s economy and that is a regressive tax that hurts low-income people the most. An estimated 2 percent of Maine smokers purchase their products over the Internet, the committee was told.

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