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As Atlantic City Eyes Smoking Ban, Casinos Fear Losses
By Laura Mansnerus
ATLANTIC CITY — Here on the casino floors are the few square feet in New Jersey — indoors, anyway — where a person can go out and have a drink and a cigarette at the same time.
But that may soon change.
Less than a year after gaining an exemption from a statewide smoking ban from the New Jersey Legislature, casino owners are watching that slip from their grasp. Citing concerns about secondhand smoke, the City Council seems intent on establishing a ban of its own.
If the proposed ordinance passes, Atlantic City will see whether gamblers who smoke can be separated from their cigarettes or whether, as the owners of the city’s 11 casinos contend, they will take their business elsewhere.
“The day it passes, you won’t see me again,” Rob Catania of Williamstown, N.J., said during a break from a poker game at Resorts Atlantic City.
Mr. Catania, who comes here most Tuesdays, said that he would go to Connecticut or to Philadelphia, where casinos will open next year.
Several recent studies support the casino owners’ fears that they will lose business. An analysis of the Delaware smoking ban by Richard Thalheimer, an authority on the horse racing industry and casino gambling who teaches at the University of Louisville, found that the ban was followed by reductions of 11 percent to 19 percent in slot machine wagering at racetracks. The slot machine revenue recovered, but only because the tracks added machines, Mr. Thalheimer said.
Another study, commissioned last year by the Casino Association of New Jersey, a trade group, and using Delaware as a baseline, estimated that a ban in Atlantic City would depress annual gambling revenue, now about $5 billion, by about $1 billion after two years.
Still, the proposed smoking ban here seems to be sailing through. The ordinance has met little public opposition since it was unanimously introduced. A hearing on the measure is scheduled for today, and the Council is to vote on it Dec. 29.
The casino association said in a statement in October that the measure was “irresponsible” and “should be reconsidered.”
Joseph A. Corbo Jr., the president of the association, wrote in a local trade magazine, Casino Connection, that without the exemption, “we could find ourselves in a much weaker competitive position in the very near future.”
But Councilman G. Bruce Ward, when asked whether the casino association was lobbying council members, said, “If it is, it’s quiet.” Mr. Ward, a health care lawyer, is a leading sponsor of the antismoking ordinance. “I don’t think they ever thought the whole state was going to go smoke-free and they would continue to have this exemption,” he said. “You’ve got a national movement now.”
Supporters of the ban say restaurants and bars in other cities have not just survived the restrictions but thrived, though bar and restaurant owners in Atlantic City say that with the casinos exempt from the ban they cannot compete.
Lewis Rothbart, the director of the Licensed Beverage Association, put it this way: “Our position all along is that there should be a level playing field and that the casinos should not be given any special privileges.”
Since the statewide ban took effect on April 15, the casino industry — which estimates that gamblers who smoke account for half of its customers in Atlantic City — has found ways to accommodate smokers who would rather sit at a bar than a slot machine. Over the summer, the casinos drew smokers to expanded outdoor bars, and most have also opened bars on their casino floors.
For other Atlantic City bars, however, “the closer you are to the casinos, the more devastating the impact,” said Cathy Burke, the owner of the Irish Pub, which is within shouting distance of the Boardwalk.
Ms. Burke said that about 70 percent of her bar customers were smokers. Last summer, she said, many crowded onto the pub’s newly expanded patio.
“They don’t care if it’s 110 degrees,” she said. “They’ll go outside.”
But with colder weather, she said, she expects business to drop considerably.
Restaurant owners across the state opposed the casino exemption from the beginning, exasperated by legislators who said a smoking ban would not hurt their businesses but, at the same time, seemed persuaded that it would imperil the casino industry.
It was never clear just which legislators were holding out for the casino exemption.
Regina Carlson, the director of the New Jersey Group Against Smoking Pollution, known as GASP, said: “We’ve never heard so many speak, and speak so eloquently, about how sorry they were that the casinos weren’t included in this. The perception was, they couldn’t do it, which is kind of sad when a Legislature feels it can’t stand up to the casinos. There’s clearly more here than meets the eye. There always is when tobacco is involved.”
State Senator John H. Adler, a Democrat from Camden County and a longtime proponent of the ban, said that the exemption was a political necessity. But, he noted, “We left open the opportunity for municipalities to legislate to a broader degree than we did.”
In fact, he said, he thought the casinos “will end up making money” by attracting people who do not want to gamble amid ashtrays and secondhand smoke.
As to where smokers will go, speculation centers on southeastern Pennsylvania, Connecticut and casinos on Indian reservations in upstate New York.
Nevada will continue to allow smoking on casino floors, even though voters approved a ballot measure this month that prohibits smoking at restaurants and bars that serve food. But because three-quarters of visitors to Atlantic City live in New Jersey and the Philadelphia and New York metropolitan areas, Las Vegas is not considered major competition.
Pennsylvania’s new casino legislation allows only slot machines. But slots parlors will soon spring up along the Delaware River from Bucks County south to Philadelphia and Chester, Pa. And while the casinos will be subject to local smoking ordinances, it is not clear whether Philadelphia’s recently enacted smoking restrictions, which apply in restaurants and bars, will extend to the casinos.
For now, there is no smoking ban in Chester, where a new harness track with up to 5,000 slot machines is to open in January.
“That’s going to pick up even more business from Delaware and Atlantic City” if Atlantic City’s casinos lose their exemption, Mr. Thalheimer said.
At Resorts, Mr. Catania, snuffing out his cigarette as he returned to the poker table, said he could depend on Connecticut. The two casinos there, on tribal lands, are not subject to the statewide smoking ban. “They have to let you smoke,” he said.
Tribes Fear Cigarette Tax Law Could Destroy Their Prosperity
By Corey Kilgannon
SOUTHAMPTON, N.Y. — It was late October, and the sun was nearly setting behind the Shinnecock Hills, illuminating the Indian-owned smoke shops along Montauk Highway like museum exhibits.
Inside one of the shops, the Shinnecock Indian Outpost, customers lined up to buy packs and cartons of tax-free cigarettes, at less than half the price they might pay at the nearby 7-Eleven.
Outsiders feeding their nicotine addiction: this is what keeps the Shinnecocks alive, said the owner, Lance Gumbs. He sat in the store explaining the history of the Shinnecock cigarette trade and how it is now being threatened by a federal lawsuit and by an expected push by a neighboring government, New York State, to end the longstanding practice of selling tax-free cigarettes to non-Indians on Indian reservations.
The owner of the Gristedes supermarket chain has sued to stop those sales. And the state, which estimates it loses as much as $576 million a year in the sale of untaxed cigarettes, is expected to begin enforcing a law that would compel reservation retailers to begin collecting a tax of $1.50 per pack.
Mr. Gumbs, the Shinnecocks’ tribal chairman, fears disaster if that happens.
“You cut off the cigarette revenue, and you cut off the livelihood of the tribe,” said Mr. Gumbs. “This would annihilate us. Everyone would be out of business and back on the welfare rolls. It would be a nightmare scenario.”
Historically, New York State has not collected cigarette taxes from tribes within its borders because they are considered sovereign nations, so Indian-owned smoke shops have long sold cigarettes at far lower prices than non-Indian competitors.
Over the past 20 years, cigarette tax increases have drastically driven up retail prices, while reservation prices have remained relatively low. As a result, cigarette sales have become a booming business on the reservations, including those of the Shinnecocks on Eastern Long Island, and their neighbors, the Unkechaug nation.
Shinnecock and Unkechaug tribal leaders, who credit cigarette revenue with pulling their people out of a quicksand of unemployment, substance abuse and other ills, now fear losing their profitable niche as discount cigarette purveyors.
But John A. Catsimatidis, who owns the Gristedes and other supermarket and convenience store chains, says those sales illegally undercut his cigarette business. His lawsuit, filed in March in United States District Court in Brooklyn, seeks to force Indian retailers to buy cigarettes from wholesalers at the taxed price, and asks for $20 million from the two tribes’ cigarette retailers, the amount he claims he has lost.
“The illegal discount pricing by Indian tribes has cost legitimate retailers” more than $1 billion a year in sales revenue, according to his lawsuit.
“I’ve lost a lot of money to the Indian sales, but that’s not the issue,” Mr. Catsimatidis said in an interview. “I’m suing on principle. Why are these smoke shops allowed to work outside the law and damage everyone else’s business?”
Both of the Long Island Indian nations filed motions in October to dismiss Mr. Catsimatidis’s suit. Tribal members appeared in court in traditional ceremonial outfits, as lawyers for both sides presented arguments to Judge Carol Amon, who has yet to issue a ruling.
The two Indian nations, like the other tribes in New York State, are also bracing for the state to begin enforcing a law that took effect March 1 requiring New York to collect taxes from wholesalers who sell to reservations. The Long Island tribes are about an hour’s drive from Queens.
Gov. George E. Pataki has refrained from enforcing the law, but Attorney General Eliot Spitzer, the candidate for governor who is leading in the polls, supports it. As attorney general, he has pressured wholesalers to stop selling tax-free cigarettes to tribes, and fought cigarette sales over the Internet and through the mail.
“The smoke shops are the heart and soul of the economy on this reservation,” said Harry Wallace, the chief of the Unkechaug Tribal Nation. “This is nothing more than an attempt to challenge our Indianness and gain control.”
There are some 250 Unkechaugs living on the 50-acre Poospatuck reservation, which is some 20 miles to the west of the Shinnecocks, in what is now the town of Mastic. Chief Wallace, who is a lawyer, owns a smoke shop on the reservation, which is nestled deep in the corner of a suburban neighborhood on the banks of the Mastic River.
Chief Wallace admits that the sale of untaxed cigarettes gives his tribe an advantage, but he offered this context: Since settlers first came to the Long Island’s East End in 1640, Indian tribes have steadily been deprived of their land, livelihoods and traditions, and have become boxed into small reservations. About the only thing the tribes have retained is their sovereignty and the right to conduct tax-free business.
By restoring earning power to the community, untaxed cigarettes have breathed fresh life into a threatened Indian culture. Chief Wallace called the lawsuit and the state’s tax policy “an attempt to eliminate us as entities and intimidate us and threaten our people with extinction.”
“They want economic control so we revert back to the status of subservient dependents and go back on welfare,” he said, his voice shaking with anger as he sat in his office surrounded by mounds of legal files for use in his legal defense of untaxed cigarette sales.
The state sets minimum price levels for retailers and imposes a sales tax of $1.50 per pack. New York City imposes an extra $1.50 per pack.
A recent study by the State Health Department found that 37 percent of New York’s smokers say they buy cigarettes “from low-price (mainly untaxed) sources.” The number was higher for people who live near Indian reservations.
The study estimates that the state loses $436 million to $576 million in revenue from untaxed sales. Convenience stores near the reservations typically sell major-brand cigarettes for roughly $5.50 a pack, a price the reservation smoke shops can beat by $2. At the Poospatuck reservation, for example, a 10-pack carton of Parliament cigarettes costs about $33, but it costs $55 in nearby stores.
Barbara Cahill, 45, of Mastic Beach, is a regular customer. Once a week, she buys her Parliaments on the Poospatuck reservation, which she said saves her more than $90 a month.
“That’s enough to pay my cable bill,” she said on Friday after buying her cigarettes at the reservation. “Why wouldn’t I go where it’s cheaper? I already pay $6,000 a year in property taxes, plus gas taxes, sales tax. This business is all the reservation has to keep it going.”
The customers range from local landscapers in dusty pickup trucks to golfers in luxury cars. There were Harley riders, surfers, students and mothers with children waiting in the back seat. Whether buying by the pack or by the carton, they said it was more than worth it to go out of their way to get discounted cigarettes.
New York requires wholesalers to buy a $1.50 per pack tax stamp for all cigarettes sold to non-Indian retailers. The new law, once enforced, would also require wholesalers to buy tax stamps for the cigarettes they sell to Indian retailers. But those retailers would be allowed to buy a certain number of unstamped cigarettes to sell tax-free to customers they knew to be members of their tribe.
For now, business is brisk on the reservations. In late October, five cashiers were busy making sales at the Peace Pipe Smoke Shop, which has a walk-up express window. But business is not always smooth. Several months earlier, Suffolk County police officers stood at the entrances to the Poospatuck reservation and began issuing summonses to smoke shop customers, but desisted after Chief Wallace threatened legal action.
As on the Poospatuck reservation, a handful of bustling smoke shops are the hub of activity on Shinnecock territory and serve as the face of the tribe to the outside world. Billboards warn outsiders that they are “Entering Shinnecock Territory” and risking arrest if they trespass.
The half-dozen smoke shops on the fringe of the Hamptons include a threadbare drive-up stand, a camper and a large metal shipping container with a cutout doorway. They line a stretch of Montauk Highway that leads east into Southampton’s village, with its upscale shops and well-heeled shoppers.
The shops employ 70 heads of households on the 800-acre Shinnecock reservation, which has roughly 550 residents, Mr. Gumbs said. The Shinnecocks, who are also seeking to open a casino on their land, are members of one of the oldest self-governing Native American tribes, he said, and have lived on the East End for thousands of years, long before New York State and its tax laws.
“We’re not a part of New York State,” he said. “This is like New York taxing New Jersey.”
Bloomberg Donating $125 Million to Anti-Smoking Efforts
By Diane Cardwell
Taking a significant step toward becoming a full-time philanthropist after leaving office, Mayor Michael R. Bloomberg pledged today to spend $125 million of his own money to build a global anti-smoking campaign.
The donation, to be funneled to existing organizations over two years, is the largest single contribution to global tobacco-control efforts, anti-smoking advocates said. And beyond that, it shows how Mr. Bloomberg, who made banning smoking in bars and restaurants a focus of his first term, plans to amplify his work in office as he begins building his charitable foundation.
“I think we’ve learned some important things about how we convince people to stop smoking,” Mr. Bloomberg said at a news conference at NBC television studios. “It is one of the world’s biggest killers and it has sadly been overlooked by the philanthropic community.”
Under the plan, Mr. Bloomberg would spend the money to create and support programs aimed at helping the world become tobacco free. The campaign would use several approaches, including developing and expanding quitting and prevention programs, encouraging the adoption of New York-style tobacco taxes and smoking bans, and designing a system to track tobacco use and efforts to stop it worldwide.
The campaign would also work to change the image of tobacco, support efforts to educate communities about its harms, create a global clearinghouse for anti-tobacco ads and bring together a legal consortium to assist in drafting and passing legislation. A spokesman for Mr. Bloomberg, Robert Lawson, declined to identify the organizations the campaign would work with, saying that arrangements had yet to be made final.
Mr. Bloomberg, one of the country’s richest people, has long said that he plans to give away the bulk of his fortune, estimated by Forbes this year at $5.1 billion, and he has been steadily increasing his philanthropic giving. In 1997, he gave $26.6 million to charity; last year, he ranked seventh among the nation’s philanthropists in a survey conducted by The Chronicle of Philanthropy, giving away $144 million.
Over the years, he has often made large gifts to academic or health-oriented institutions — the School of Public Health at Johns Hopkins University, where he was an undergraduate, now bears his name — and a series of smaller, ostensibly anonymous gifts to arts and social service groups.
This time, however, Mr. Bloomberg said it made more sense to announce his plans, both out of a desire to attract people with good ideas to his efforts and because once it became part of a foundation, people would find out anyway. Mr. Bloomberg is in the midst of buying a $45 million mansion on the Upper East Side to house the foundation, which is likely to focus on his primary areas of interest, including education, the arts and public health, perhaps as first among equals.
Speaking of the foundation, he said: “I plan to try to focus my resources where we can make a difference in improving the health and the quality of life of people in New York City, in the state, in the country and even around the world.”
Public health advocates greeted news of Mr. Bloomberg’s plan with praise. Dr. Prabhat Jha, a professor of epidemiology at St. Michael’s Hospital at the University of Toronto and an expert on tobacco control, said that if the money was spent the right way, it could make a tremendous difference in curtailing tobacco use.
“If Mayor Bloomberg can help governments take tobacco seriously, then it will have an impact,” he said. “Once governments take tobacco seriously, they can figure out that there are a few really effective interventions.” Those include raising the price of tobacco through taxes, clean air laws that restrict public smoking, prominent warning labels and clear information about the consequences of tobacco use.
Dr. Jha said the fact that Mr. Bloomberg was getting up on an “international soapbox and speaking about tobacco” was a contribution in itself. But he cautioned that the money should be used to help build public consensus about tobacco dangers and political support for tackling them, especially in poor countries with high smoking rates.
“The details matter,” he said. If the money is well spent and focused on countries like India, China, Nigeria and Indonesia rather than on institutional overhead in the West, he said, “you could have a real bang for the buck.”
Dark 2BR Loft? That's Code for a Club
By Melena Ryzik
AT midnight one recent Friday, dozens of people lined up in one of Brooklyn's bleakest warehouse districts, waiting to enter a rock show. Tickets had been sold at a Greenpoint record store, but the show's address was only revealed to buyers at the last minute by e-mail.
A ticket taker stamped the hands of nearly 500 fans who eventually jammed into a room to drink beer and hear the Black Dice, local favorites. The band's dressing room was a bit odd: there was a bed in it. The bathroom for the audience had somebody's used toothbrush and a package of Q-tips. A big mural in the hall read, "Home Sweet Home."
This was no rock club. This was someone's home.
The loft, shared by several art school graduates in a desolate part of Bushwick, is transformed every other month into an underground club, the High Five.
"I've always been pretty obsessed with underground music," said Peter Buxton, 24, one of the roommates. "In the back of my head I was thinking it would be cool to do shows. And as soon we spotted this loft, we thought it would be a crime not to do something."
Mr. Buxton and his roommates, who make enough money from their bimonthly shows to cover the $2,800 rent for their loft, have plenty of company around the city.
From former industrial lofts in Brooklyn and Queens to stylish pads in Manhattan's meatpacking district, living quarters are being used as cash-producing spaces for under-the-radar parties.
Given the high costs and stringent laws governing licensed night spots — from no-smoking ordinances to laws regulating closing hours, alcohol sales and dancing — underground parties, where guests can smoke, boogie and drink as long as they like, seem to have an increasing appeal, in no small part because they are illicit.
"It feels super-sneaky," said Solana Larson, 26, a Brooklynite who went to a party in an apartment in the meatpacking district. "I brought some friends, and they were like, 'Wow, this is so underground.' You can't help but feel like it's kind of a select crowd."
Organizers employ various tactics to avoid attracting police attention, including checking guests' identification to make sure they are 21 and asking them to sign a release form. Shadi Shahrokhi, a host of parties in his loft in the meatpacking district, puts his neighbors in the expensive Maritime hotel for the night to avoid having them file noise complaints with authorities.
"This is a much more relaxed atmosphere," said Dave, a patron at the Black Dice show in Bushwick. He declined to give his full name because, he said, he works for the government. He described his age as "grown-up," which in that crowd meant older than 35. "Clubs are so restrictive," he said. "If you've been to the Bowery Ballroom, all the bouncers are scowling. Here it's like being in someone's living room, because you are."
That sense — of being outside the club establishment — is what seems to attract patrons like Emily Spurr, 23, who works in advertising. "Everyone likes to feel like a rebel in a little way," she said at the High Five.
Many organizers said their landlords turn a blind eye as long as the rent is paid on time and there is no trouble with authorities. "The building manager was on my case, but I think he just wanted me to invite him," said Karen Williams, 46, a theater artist who recently started giving parties in her Chinatown loft. (She did not invite him, she said.)
"The club scene can be a drag," said Ms. Williams, a veteran of the 80's-era East Village. Conventional clubs are "expensive, and there can be an attitude," she said. "I just wanted to have fun."
Despite efforts to keep the parties secret and under the radar of authorities, it can be hard to disguise that hundreds of people are crowded into a living space, swilling beer and dancing to loud music.
At the last Buyrum party, the kitchen-cum-bar was doing a brisk business in Coronas and rum and Cokes. The dance floor was packed, videos played on a screen, and a dozen people were smoking on benches in the front of the apartment.
State to Forgo Cigarette Tax to Keep Peace With Indians
By David Staba
BUFFALO — Across the street from Randy's Smoke Shop on the Tuscarora reservation near Niagara Falls sits a pile of tires and wood pallets, a reminder of the fires set during American Indian demonstrations against state tax policies in 1997 that closed several Interstate highways.
Hoping to avoid a repeat of those protests, the Pataki administration has said it will not enforce a law taxing cigarettes and other goods sold to non-Indians at stores on Indian reservations across the state. Gov. George E. Pataki's budget proposal calls for delaying enforcement of the law, which took effect on March 1, until next year.
"Our goal has always been to solve this matter through cooperation instead of confrontation," said Kevin Quinn, a spokesman for the governor. "The Tax Department has indicated it will continue its current policy as the governor and Legislature discuss these matters."
Administration officials have said they are concerned that a repeat of the 1997 protests could slow interstate commerce, divert trucks carrying hazardous loads through heavily populated communities if the Interstates are blockaded again, and cost the state millions of dollars in state police expenses.
Indian business owners assert that the tax law infringes on Indian sovereignty, is virtually unenforceable and will hurt stores that generate important economic activity on the reservations.
"How are we supposed to live?" said Pauline Chrysler, whose son, Randy Chrysler, is a smoke shop owner.
But the Pataki administration's decision to delay enforcement of the new law has also fueled a partisan debate in Albany, where many Democrats have criticized the Republican governor for ignoring a significant source of revenue, because the state is not getting the $1.50-a-pack taxes it collects on cigarettes sold everywhere else in the state.
Last month, Attorney General Eliot L. Spitzer suggested that wholesalers who continued supplying cigarettes lacking a tax stamp, which sell for as little as half as much as cigarettes in nonreservation stores, to Indian merchants could lose their licenses. Mr. Spitzer, a Democrat, is running to replace Mr. Pataki, a Republican who is leaving office at the end of the year.
The latest budget bill passed by the Democratic-controlled State Assembly also calls for tax collections to begin immediately, with wholesalers facing penalties that could include loss of their licenses.
"You can't announce to the world that a law will simply be ignored and not enforced," Mr. Spitzer has said. Marc Violette, a spokesman for Mr. Spitzer, declined comment on Friday's clarifications by the Pataki administration.
The United States Supreme Court ruled in 1994 that states have the right to collect sales tax on purchases by non-Indians at reservation stores.
The conflicting messages from Albany have created confusion among Indian business owners and their wholesalers.
Last Tuesday, one of the largest wholesalers to stores on the Seneca and Tuscarora reservations notified store owners there that it would stop shipping the unstamped cigarettes. But by Friday, a lawyer for the wholesaler said he had received word from the Tax Department that shipments of unstamped cigarettes could continue.
Mr. Chrysler said he laid off about a dozen of his 30 employees shortly after being notified by the wholesaler that it was stopping shipments last week. By Thursday afternoon, customers were limited to one carton each in an effort to stretch dwindling supplies.
"All we're concerned about is knowing one way or another whether that policy (of nonenforcement) is going to continue," said Joseph E. Zdarsky, a lawyer for the wholesaler, Milhem Attea and Sons of Buffalo. "If it didn't, theoretically, someone could assess taxes against our client in crippling amounts."
The profits from sales of tax-free cigarettes and gasoline have helped spawn other Indian businesses. One of Mr. Chrysler's brothers started a bottled-water supplier, while another opened a sneaker shop, both on the same property as his store.
"They know there's no pot of gold at the end of the rainbow here," Mr. Chrysler, who has owned the store for 16 years, said of his employees, many of whom are related to him. "But it gives them pride and dignity, so they can go home and be a father or a mother — they can be a provider."
State Senator George D. Maziarz, a Republican whose district includes the Tuscarora reservation, said postponing a resolution doesn't solve the issue.
"It's like a train wreck that everybody sees coming, but nobody knows how to avoid it," Mr. Maziarz said.
Study Says Teenagers Are Avidly Shunning Cigarettes
By Sewell Chan
Smoking among New York City teenagers has shown a startling decline over the last four years, with a survey of smoking habits finding that just 11 percent of public high school students now smoke.
Mayor Michael R. Bloomberg, who announced the findings yesterday, attributed the decline to higher cigarette taxes, which have raised the price of a pack to as high as $8, and to a ban on workplace smoking. But the declines were also reflective of nationwide trends showing that teenagers are increasingly shunning smoking.
The city's study showed that 30,000 out of 280,000 high school students had smoked at least one cigarette in the last month and that the figure had fallen by half since 1997, when 23 percent of students smoked. In 2001, that proportion had fallen to 18 percent.
By comparison, the 2003 National Risk Behavior Survey, the most recent national survey available, concluded that 21.9 percent of high school students in the United States smoked. The next such survey is to be released later this year.
The mayor announced the city results at a news conference at the High School for Art and Design on the East Side. The survey, conducted every two years since 1997, involved a representative sample of students in the 9th through 12th grades at 87 high schools across the five boroughs; it was conducted last year by an outside research firm using protocols approved by the federal Centers for Disease Control and Prevention.
The findings suggest that the stereotype of the urbane, smoking teenager seen in films like "West Side Story" does not reflect a present-day reality, with students, particularly those in poorer neighborhoods, not smoking.
The study found that smoking is one of the rare health problems that is not concentrated in neighborhoods like the South Bronx, Harlem and north-central Brooklyn. Those three areas — cited by the city's Department of Health and Mental Hygiene for having some of the worst health problems — actually have lower rates of smoking among youths than the rest of the city.
Instead, the survey found that smoking rates were highest among white students (29 percent), students on Staten Island (23 percent) and girls (12 percent). Among white girls, 35 percent said they smoked, compared with 24 percent of white boys.
The causes for the relatively high prevalence of smoking in those groups are not clearly understood. Dr. Thomas R. Frieden, the health commissioner, said the rates may reflect higher percentages of parental smoking on Staten Island and "cultural norms" that make white students more susceptible to film, television and Internet images that glorify smoking.
Indeed, the biggest declines in youth smoking since 1997 have been among black and Hispanic students. They are on the whole poorer than white students, a factor that may discourage smoking as cigarette taxes rise.
Mr. Bloomberg has identified himself as a public health advocate and has repeatedly criticized the tobacco industry; he echoed both themes yesterday by calling for the state to raise the city's part of the cigarette tax and by accusing the tobacco industry of trying to influence children. The mayor, who is 64, also referred to his personal experiences.
"I used to smoke as a young man, so I know how strong the addiction is and how hard it is to beat it — but it can be beat, and of course the best way to beat it is never getting hooked in the first place," he said, adding that children "are bombarded each day with messages, both subtle and overt, encouraging them to smoke."
The American Cancer Society said the survey results were encouraging and urged Albany to pass Mr. Bloomberg's proposal to raise the tax on cigarettes bought in the city from $3 to $3.50. "By further increasing taxes, strictly enforcing laws about who can buy cigarettes, targeting education to the heaviest smokers and securing clean indoor air for everyone, we can continue this hopeful and healthful trend," said Kris Kim, executive vice president of the cancer society's New York and New Jersey division.
Jennifer L. Golisch, a spokeswoman for Philip Morris USA, the country's largest cigarette manufacturer, said the company had spent $1 billion to prevent youth smoking since 1998 and had not advertised its brands in general-circulation magazines and newspapers last year and so far this year. "Our products are intended for adults only," she said, adding that the company's marketing programs "comply with, and in many instances, go beyond what the applicable laws and state settlement agreements require."
Settlement Reached to Pursue Online Cigarette Sales Taxes
By Sewell Chan
Mayor Michael R. Bloomberg yesterday announced a settlement with an online cigarette vendor that will allow the city to pursue residents for up to $33 million in unpaid excise taxes. It was the largest such settlement, officials said, since the city sued dozens of companies and individuals in 2003 for illegally selling cigarettes over the Internet to city residents.
A 2000 state law banned direct sales of cigarettes over the Internet and by telephone or mail. Tobacco companies challenged the ban, but a federal appellate court upheld it in February 2003. The state began enforcing the law that June.
Officials acknowledge, however, that online cigarette sales are still commonplace, and say that when they occur, the state and city are unfairly cheated of tax revenues.
Even while the state ban was being challenged, the city began its own effort in January 2003 to pursue Internet cigarette vendors for failing to report sales and excise taxes. It has filed four lawsuits against about 35 companies and individuals, alleging that they had failed to file federal Jenkins Act reports, which are intended to alert state tax authorities to out-of-state cigarette purchases so that the purchases can be subject to local taxes.
The most recent settlement was filed last Wednesday in Federal Bankruptcy Court in Tampa, Fla. The online cigarette vendor, eSmokes, agreed to give the city an electronic database of all its sales to addresses in New York State from 2000 to mid-2003. The company also agreed to stop selling cigarettes to customers in New York State. The company, which began operations in 1999, filed for bankruptcy protection last May.
Eric Proshansky, deputy chief of affirmative litigation for the city's Law Department, said that eSmokes had turned over seven spreadsheets containing records on about 140,000 sales. However, many of the records may be duplicates.
The city's Finance Department will sort the data and send tax bills to city residents. In the past, such collection efforts have yielded 65 percent of the taxes owed; efforts continue to collect the remainder.
In a separate effort, Mr. Bloomberg has urged the state to raise the city's share of the state cigarette tax to $2 from $1.50 per pack. Smokers also pay $1.50 in state tax.
Guy Walks Into a Bar
By Nicholas Kulish
Recently my friend Brandon and I walked along Atlantic Avenue in Brooklyn looking for a place to watch a football game and to quench our thirst for a cold brew. I pushed open the door and we were headed for a pair of empty stools when we both stopped cold. The bar was packed with under-age patrons.
Some of them stumbled around the pub, others stood on chairs shouting. A few lay back, heads lolling, looking ready to be carried out. "Stroller derby," Brandon muttered, and we left.
Call me a hard-liner or a party pooper, but I say 21 means 21. No more babies in bars.
Obviously, today's working parents are eager to spend a little quality time with their youngsters, and we're used to seeing small fry everywhere from fancy restaurants to art gallery openings. I've adjusted to the idea that many otherwise reasonable people believe there's no point in paying for a baby sitter on movie night when their toddler can entertain himself by kicking the back of my chair.
But bars? A group of 19-year-olds would be stopped at the door, but no one has the guts to card the really little ones. I blame the law of unintended consequences — in this case, the no-smoking movement. Sure, cigarettes are a public health problem. But the smoky bar filled with unhealthy grown-ups at least felt like a bar. Now, the local gin joints look more like jungle gyms.
It was the bartenders' exposure to secondhand smoke that inspired the tobacco ban. Now their lungs are presumably healthier. But they are saddled with a raft of tiny patrons who never buy drinks. They bring their own bottles. And they never tip.
Bloomberg Would Put Higher Tax On Cigarettes
By Jim Rutenberg
ALBANY - Mayor Michael R. Bloomberg called for a further rise in the city's portion of the cigarette tax during testimony here on Monday in which he skewered parts of Gov. George E. Pataki's proposed budget as deeply flawed and unfair to New York City.
Aides to Mr. Bloomberg said he would lay out his ideas for a higher cigarette tax in his State of the City address on Thursday, and make a more detailed proposal when he unveils his own budget plans a few weeks after that.
But in comments to reporters after his testimony at the Legislative Office Building here on Monday afternoon, Mr. Bloomberg indicated that he believed a rise of 50 cents a pack was possible. Smokers in the city now pay $3 a pack in taxes.
"I think another 50 cents might be good," he said. "There's a clear correlation: You raise your cigarette taxes, fewer children go and smoke."
Mr. Bloomberg said the extra revenues would go toward new public health initiatives to reduce smoking.
Mr. Bloomberg's cigarette proposal, which would have to be approved by the Legislature, came as he criticized Mr. Pataki's complicated proposal rejiggering cigarette taxes statewide. In contrast to Mr. Bloomberg's proposal to raise the city's share of the tax, the Pataki budget would reduce it.
That budget proposal would raise revenues for the state for various health programs while reducing the difference between New York City and out-of-city cigarette prices. It would raise cigarette taxes outside New York City to $2.50 from $1.50 per pack while reducing the city's portion of the cigarette tax to 50 cents from $1.50 - so that statewide, smokers would pay $2.50 in taxes and city dwellers would continue to pay $3. The state would then reimburse the city the $78 million it would lose annually because of the change.
But Mr. Bloomberg said in his testimony yesterday that there was no way to ensure that that money would always go to the city. "This is a classic case of, 'If it ain't broken, don't fix it,' " he said.
Mr. Pataki's proposed changes in the cigarette tax provided but one target for Mr. Bloomberg yesterday. His critique was followed by similar testimony from the new City Council speaker, Christine C. Quinn.
The mayor called upon the state to follow the city and eliminate its portion of the "job-killing tax" on clothing items costing $110 or less, as did Ms. Quinn. He said the governor's proposed Medicaid cuts and cost reductions threatened the city's fragile hospital system.
But he reserved his fiercest criticism for what he termed "this ridiculous imbalance" between what city residents provide to the state in taxes and what they get back from the state in education money.
"Let me tell you, we are not going to stand by and let this happen," the mayor said. "We've been shortchanged for too long, and we'll use every resource at our disposal to correct this outrageous injustice."
During her testimony, Ms. Quinn said: "The administration and the Council are united and determined on this issue. We will fight on behalf of our city's children until the state fulfills its obligation."
Mayor Bloomberg and Ms. Quinn also both complained that one of Governor Pataki's main budget proposals - giving $400 property tax rebate checks to homeowners in school districts that limit their spending - left New York City out in the cold. The governor's budget states that no rebates shall be issued to property owners in any city with a population of one million or more. Only one city in New York has a population of one million or more: New York City. And the school districts in the municipalities whose residents do get the rebate will be reimbursed, for a total of $530 million.
"Of this $530 million in new education aid," Mr. Bloomberg said, "We get zero percent."
Mr. Bloomberg said that since the state is not sharply increasing education aid to comply with a court order, the city will be forced to cut $1.8 billion from its school building plan, causing the cancellation or delay of several projects, including a new elementary and middle school for Lower Manhattan, a beloved project of the Assembly speaker, Sheldon Silver.
Speaking with reporters earlier, Mr. Pataki shrugged off Mr. Bloomberg's complaints about school aid. "I've yet to have the mayor come and not say that," Mr. Pataki said, adding that the state was picking up $770 million in costs the city was not expecting it to bear.
But over all, the tension between the two Republicans played out in subtle ways, with neither taking on the other personally.
Mr. Bloomberg went out of his way to compliment Mr. Pataki personally, saying: "He's been a good governor for the last 12 years and he's trying to do what he thinks is right for 18 million people. What I've got to do is I've got to fight for the rights of 8 million people."
Smoking and Fuming
By Op Ed Contributor Javier Marias
Madrid - FOR far too many years, almost 40, the people of Spain were treated like minors by Franco's dictatorship. But it seems that some people among us still yearn for that era. The new antismoking law in Spain, which went into effect with the new year and bans smoking in workplaces and restricts it in many bars and restaurants, is a case in point: it is a clear example of the state trying to regulate citizens' private lives and customs. As such, it is a measure that is far more befitting of Franco than a democracy.
Now, I should say immediately that I am a smoker, like nearly a third of my fellow Spaniards, and I've never tried to quit. I know smoking isn't good for my health, but neither is walking in the polluted streets of Madrid or Barcelona, nor is living in a world where the United States refuses to sign on to the Kyoto Protocol.
Many of my friends are smokers too; many are not. But we have always managed to come to terms by asking if anyone minds our smoking - without the government's intervention.
Of course, nonsmokers should not be subjected to secondhand smoke nor obliged to suffer its effects, and in this vein, limits should be placed on smokers in enclosed, common-use spaces. But the government's argument that it is seeking to improve public health is hypocritical. The Spanish Treasury takes in colossal revenues, direct and indirect, thanks to this pernicious habit. Every time the government needs to find a way to finance some exceptional expense, a new cigarette tax is levied. The implicit message to Spanish citizens is this: "Smoke! Smoke more - so we can balance our budget."
Indeed, to escape the taint of hypocrisy, Spain would have to match its new antismoking measures with an array of others fighting everything else in the world that is at all harmful. Nowhere have I ever heard, for example, that cars are obliged to carry, just above the driver's-side door, a warning, like those on cigarette boxes, that "Driving a car may cause death, grisly amputations, quadriplegia and involuntary manslaughter."
I have also never seen anyone lay blame on sunbathers who go to the beach and almost drown, or mountain climbers who get lost and fall off cliffs, and whose rescue incurs a tremendous expense and endangers the lives of others. Nobody is forcing anyone to swim in the ocean or climb mountains, just as nobody is forcing smokers to smoke, and yet the latter are regarded practically as criminals.
People should be allowed to make decisions about their health as they see fit, even if that means undermining it. To keep someone from smoking on the job, if he or she has a private office where smoking does not endanger or annoy anyone, is an unacceptable act of paternalism.
As far as bars and restaurants are concerned, the ban is thankfully not absolute: in the end - after tremendous protests and battles over the law, that is - in establishments of less than 1,100 square feet (spaces that are too small to be divided into smoking and nonsmoking areas), the owner can decide if the place will be smoke-free or not. This way each citizen can decide whether or not to enter - and I, for one, will not go to a restaurant where I can't smoke. So far, it seems that the majority of these smaller bars and restaurants will opt to allow their clients to blow as many smoke rings as they care to, for fear of losing them.
Most probably, the Spanish people, rather civically minded in general, will not have too much trouble complying with the law, basically because it is only partly abusive and irrational. But watch out: the government is also trying to lower alcohol consumption and, in an unprecedented move, to alter the country's traditional schedule. People in Spain continue to eat lunch around 2:30, and to dine around 10 in the evening; we go to bed late. Efforts to make us more like the rest of the world in that regard strike a blow at the very essence of Spanishness: should our schedules change, we'll be much more like France or Switzerland - and definitely more boring.
A totalitarian state is one that sticks its nose where it doesn't belong and attempts to intervene in every aspect of its citizens' private lives, and many governments today, whether left, right or center, have developed this practice of behaving like busybodies. The old notion that only dictatorships can be totalitarian seems terribly naïve nowadays. And that is the worst thing about this antismoking law and others of the same ilk: they unfortunately prove that totalitarianism is no longer incompatible with the democratic systems that once guaranteed our freedoms.
Marlboro Smokers' Group Names Philip Morris in Suit
By Melanie Warner
A group of long-term Marlboro smokers filed an unusual lawsuit yesterday against Philip Morris USA, seeking to require the company to pay for medical tests to detect early-stage lung cancer.
While most tobacco-related lawsuits have sought billions of dollars in punitive damages, this suit, filed in Federal District Court in Brooklyn, asks that Philip Morris USA, the maker of Marlboro cigarettes and a unit of Altria, be required to pay for low-dose CT scan tests, a new method for identifying potentially cancerous lesions in the lungs.
The suit, which seeks class-action status, would include smokers in New York State who are 50 or over, have been smoking at least a pack of Marlboros a day for 20 years and have not been diagnosed with lung cancer.
Jerome H. Block, a lawyer at Levy Philips & Konigsberg in New York who filed the suit, said it was intended to save lives by getting smokers tested early.
"Hopefully, this suit will change things so that we will be dealing with lung cancers that are caught when they can be treated," Mr. Block said. "Today, most detection happens when cancer is already advanced."
Mr. Block said he did not have a specific number of people who could be included in the suit, but he estimated that it could be in the tens of thousands.
Two previous attempts to hold cigarette companies liable for medical monitoring have failed. A Louisiana jury in 2003 and a West Virginia jury in 2004 rejected plaintiffs' requests for medical monitoring, including low-dose CT scans.
Since those cases were decided, Mr. Block said, the use of low-dose CT scans for lung cancer detection has become more established.
The tests, which can be done on existing CAT scan machines using radiation doses that are 70 percent less than standard levels, do not conclusively detect lung cancer. Patients who test positive for lesions could undergo a PET (positron emission tomography) scan or a biopsy. If those procedures, which are typically covered by insurance, indicate the presence of cancer, a patient would then likely undergo surgery.
Robert Smith, director of Cancer Screening at the American Cancer Society, said that the CT scan was very effective in the early detection of lung cancer and that a major trial was under way to determine how effective it might be in reducing deaths from lung cancer.
Dr. Steven Markowitz, a professor for environmental sciences and director of the Center for the Biology of Natural Systems at Queens College, said that most lung cancer was detected only after patients started to experience an intense shortness of breath or coughed up blood.
"At that point their doctor will do a chest X-ray and see a mass that's quite large," said Dr. Markowitz, who has been using low-dose CT scans to detect cancers in nuclear energy workers for the Energy Department.
According to the American Cancer Society, lung cancer, once detected, kills 85 percent of those afflicted within five years.
The lawsuit seeks to have Philip Morris pay for low-dose CT scans by proving that the design of Marlboro cigarettes was defective and could be made safer. Mr. Block said the case would use the testimony of former Philip Morris employees given during other tobacco cases, including the continuing Justice Department suit. New York law requires that manufacturers make products that are reasonably safe.
He said he wanted Philip Morris to set up a fund to pay for annual tests, which cost about $500 each, because most insurance plans do not cover them.
Philip Morris said it had no comment because it had not seen the complaint.
The latest suit comes amid a brightening litigation picture for Philip Morris. In December, the Supreme Court of Illinois threw out a $10 billion judgment in a class-action suit that had accused the company of deceiving smokers by marketing its "light" cigarettes as having lower levels of tar and nicotine.
The decision averted what would have been a major financial blow to Philip Morris and gave investors reason to believe that the company's litigation problems were starting to ease.
The company is still awaiting a decision from the Florida Supreme Court
in the long-running class-action suit. In 2003, an appeals court overturned
a record $145 billion damage award; the Supreme Court is expected to rule
soon on whether that rejection was appropriate.
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CIG COPS STUB OUT BUTTLEGGERS
By Dan Mangan
A cigarette tax-evasion operation that cost the state tens of millions of dollars in revenue went up in smoke yesterday when authorities busted the owner of a Long Island Indian reservation tobacco shop who allegedly helped flood New York City's stores with truckloads of illegal and counterfeit butts.
The scheme's alleged "Big Chief" - Unkechaug Indian Nation member Ronald Bell of Mastic Beach, L.I. - is also being investigated for conspiracy to commit murder in connection with the tax-evasion enterprise.
Authorities seized about $750,000 in cash, 15 vehicles, including several Mercedes, three handguns, a shotgun and 41,000 cartons of untaxed cigarettes yesterday morning. They arrested Bell, 40, his 38-year-old wife Yvette Mitchner and six other people on felony tax charges.
One defendant, Kee Hodck Cheow, 44, allegedly tried to hide $100,000 in cash in a washing machine in the backyard of his Brooklyn home when cops came knocking.
Bell is the proprietor of The Outpost, one of several tobacco shops on the 52-acre Poospatuck Indian Reservation in Mastic.
Because the reservation is sovereign territory, Bell is not obligated to collect taxes on the cigarettes he sells at his shop, said Detective Sgt. Patrick Ryder of the Nassau County Police Department's asset-forfeiture unit.
However, Bell is obligated to collect those taxes on cigarettes he sells off the reservation, Ryder said. But for $18 million worth of cigarettes he bought wholesale and then sold to distributors last year, Bell did not collect taxes, netting him about $2 million in pure profit, according to Ryder.
He also sold distributors cartons of counterfeit Marlboro cigarettes manufactured in China, complete with counterfeit tax stamps, said Paul Rossi of the state Department of Taxation and Finance.
"You can call him the Marlboro Man," quipped Rossi.
MIKE WANTS TO PUFF UP CIG TAX BY 50¢
By Frankie Edozien
Another cigarette tax could be on the way, the Bloomberg administration announced yesterday.
Sarah Perl, the Health Department's assistant commissioner, said the city would ask state lawmakers for the authority to hike the tax by 50 cents next year.
"We invite the council to join us in our advocacy," she said in testimony to the City Council's Health Committee.
In 2002, the city increased the excise taxes on cigarettes to $1.50 a pack. With prices now hovering at $7 a pack, the city has the nation's fourth highest tax on cigarettes.
Perl made the announcement during a hearing in which the council was considering increasing the legal age to buy smokes from 18 to 19 or 21.
And lawmakers were also considering a ban on candy-flavored cigarettes. The administration does not favor either move.
"Sending the message that 'smoking is an adult choice' may paradoxically play into the hands of the tobacco industry and attract more kids to tobacco," Perl said, adding that there was no data to support those bans.
Councilman James Gennaro (D-Queens), who said he scarcely believed the testimony came from the Health Department, claimed, "I'm flabbergasted by the reluctance to even consider 19."
"That seems like a silly argument to me," added Councilman John Liu (D-Queens) of Perl's view that projecting a forbidden-fruit image on cigarettes would attract more kids to smoke.
"We should say to our teenagers, you shouldn't be able to buy cigarettes."
CIG-BANNING DR. BLOOMY FANS THE FUMES OF HYPOCRISY
By Steve Dunleavy
MAYOR Bloomberg is too smart a man to miss the irony he brought on his shoulders this week.
Let's go back to Dec. 30, 2002, when Bloomberg said of the bar-smoking ban, "We will save literally tens of thousands of lives."
He was talking about secondhand smoke in bars and restaurants and said we would all be healthier, if not wealthier, after the city curtailed it.
So smoking became the first legal product sold in New York that was partly banned in the city, based on Bloomberg's medical expertise, or access to pristine statistics about the effects of secondhand smoke in bars.
Some bars have lost from 10 to 30 percent of their business from Bloomberg's genius as a medical doctor - not to mention places that have gone out of business and lost the city tax money.
In fact, there has been absolutely no scientific, completely scientific study that links secondhand smoke to cancer. The city has never come up with one credible statistic.
But there has been a complete scientific study - from Mount Sinai research that shows that at least 70 percent of the thousands who labored at Ground Zero as first responders reported, and proved, that they had awful trouble breathing or worse.
Some are dead.
Bloomberg thinks these highly respected doctors are so crazy that they're barbecuing with the leprechauns.
"I don't believe that you can say specifically a particular problem came from this particular effect. There is no way to tell for sure and you've got to be very careful . . . If I say, 'I've got something because of this,' that's not just the way it works," said Dr. Bloomberg.
So now I have it perfectly clear: You ban smoking in bars with no statistics on secondhand smoke, but you are telling Mount Sinai, one of the best facilities in the world, they don't know their ear from their elbow when it comes to poison attacking the lungs like a spear.
Mayor Bloomberg, stick to politics and being a genius businessman, but you are as much of a medical expert as Dr. Kildare.
Cough Up Web Cig Taxes: City
By Stephanie Gaskell
If you ordered cigarettes from Dirtcheapcigs.com, expect to find a bill from the city for unpaid taxes in your mailbox soon.
The Finance Department is mailing out bills to more than 16,000 people telling them to pay cigarette sales taxes -- or face fines of up to $200 a carton.
The city hopes to collect up to $7 million in unpaid taxes from sales to the Kentucky-based company, which is no longer in business, as part of a settlement from a 2003 lawsuit.
"There's no such thing as a tax-free cigarette," warned Finance Commissioner Martha Stark.
The city has also billed 12,012 customers of Esmokes.com for $4,484,010 in unpaid taxes; 2,313 customers of Affordablecigs.com for $956,340; 136 customers of Cigoutlet.com for $120,845; and 1,221 customers of Smokesforless.com for $277,695.
CIG BAN NO BAR BURDEN
BIZ UP DESPITE LAW
By Carl Campanile
New York's once-controversial smoking ban has become widely accepted - without hurting the bar and restaurant industry, a comprehensive new state health study has found.
Many bar owners and restaurateurs had warned the prohibitions in the city and across the state would dramatically hurt their bottom lines - or even put them out of business.
Those predictions never materialized, according to the analysis conducted by the state Department of Health.
"New York's Clean Indoor Act has not had an adverse financial impact on bars and restaurants," the report said.
The study analyzed state sales tax data from 1999 through 2005 - or two years after both New York City and New York state's smoking bans went into effect in 2003. The data found sales tax revenues held steady, and even inched up.
"The CIAA had no apparent effect on sales tax receipts for bars or full-service restaurants or on totals from all retailers in New York City or New York state," the report concluded.
If anything, opinion surveys showed that the ban could help bars and restaurants because more nonsmokers said they would patronize them.
Industry leaders did not dispute the report's finding that the gloom and doom talk was all smoke.
"We've learned to live with the law," said Chuck Hunt of the New York Restaurant Association, the group that advocates for bars, restaurants and clubs. "There was a considerable impact initially, especially for the bar and nightclub establishments. The customers gradually came back."
Hunt also said some members reported getting new nonsmoking customers.
The report found that 93 percent of "hospitality venues" were abiding by the law.
Nearly all restaurants and bowling centers - 99 percent and 98 percent, respectively - complied. But many bars are still defying the ban, with only 84 percent being smoke-free.
"Compliance in bars consistently lagged behind compliance in restaurants and bowling facilities," health officials said.
The study - the most extensive conducted by the state - also for the first time looked at how the ban affected the health of nonsmokers. It reported a dramatic 50 percent decline in nonsmokers being exposed to toxic second-hand smoke a year after the ban went.
"This may be the first time ever that research has shown a decline in the public's exposure to second-hand smoke following the implementation of a state anti-smoking law," said state Health Commissioner Antonia Novello.
Meanwhile, 80 percent of the public supports the smoking restrictions.
(NYC C.L.A.S.H. Note: The
following was our letter to the editor criticizing the validity and timing
of this "study"):
The NYS Department of Health is hardly a neutral party when it comes to their beloved smoking ban. Yet their latest study (Cig Ban No Bar Burden, July 25th) on the effect it's had on compliance and business is greeted without an ounce of skepticism or investigation. Bells should go off when the source has a special interest in keeping up support by "proving" success for the very policy they were proponents of. Anyone critically reviewing their "new" study would find that there's nothing new about it. What they did is repackage a NYS DOH 2005 annual evaluation of their Tobacco Control Program (1) and then employ one of its recommended "effective strategy"! (2) That is, to mold public perception by keeping such things in the news. By any means necessary I guess, even recycling the old and calling it new. It also relies on the old adage that if you repeat lies long and loud enough they will become the accepted truth. Even worse, this study is based on old "observational" (by them!) data from 2004 (3) and is being peddled as if it represents how things stand today! About the only honest claim is the sales tax revenue period that was analyzed by the Tax Dept. But that too was already reported last year and, aside from the Tax Dept. admitting then that sales tax revenue dropped or remained relatively flat statewide, it was roundly criticized as skewed by the hospitality industry (4). Also, aggregate figures are a convenient way to ignore the number of individual bars that lost business or had to close completely due to the ban (5). When it comes to the smoking ban, trust nothing the DOH says or does.July 5, 2006
Founder, NYC Citizens Lobbying Against Smoker Harassment (C.L.A.S.H.)
(1) "Second Annual Independent Evaluation of New York's Tobacco Control Program", August 2005
And reported by NY Times on August 7, 2005, "Two Smoke-Free Years"
(2) Pg. 95 of "Second Annual Independent Evaluation of New York's Tobacco Control Program"
(3) PDF Pgs. 11 and 12 (including Chart 3-1) of "The Health and Economic Impact of New York's Clean Indoor Air Act (CIAA)", July 2006
(4) "Night Life Rises From Ashes of Smoking Ban", NY Post, by Kenneth Lovett, May 2, 2005
(5) "Ban Loss"
Mayor Bloomberg and his prying-eyes health czar, Thomas Frieden, aren't the only city officials determined to see that New Yorkers live healthy lives - or else.
Consider City Councilman Joel Rivera (D-Bronx) - who knows better than you how you should live your life.
Or so he thinks.
Poor people in particular, in his view, are in need of his wisdom - because they're not only fat, they're stupid.
According to Rivera, many poor people are fat because they eat fast food. And they do this, he thinks, because they don't know any better.
Happily for them, Rivera does.
Rivera would use municipal zoning powers to keep new fast-food shops out of obesity hot-spots all around the city, and away from schools.
Just how he would keep track of the relevant data isn't clear - though likely he would employ the same computers Bloomberg's Frieden is using, to keep close track of New Yorkers personal health records (for their own good, don't you know).
"It's one of the best ways to tackle the obesity issue," Rivera told The Post - notably overlooking education, diet, exercise and self-control.
Rivera's right that many people die from obesity.
Then again, everyone dies eventually.
Even skinny vegetarians.
Rivera and people like him don't care about postponing death so much as they care about controlling life.
Other people's lives.
But the way people live should be their decision, not Joel Rivera's.
Meanwhile, a recent (unscientific) NY1 poll found that more than 80 percent of respondents disagreed with Rivera's busy-bodying.
They understand that the proposal is just another effort by petty tyrants to dominate others - this time in the guise of an "innocuous" health campaign.
Its future was revealed recently in a Keystone Forum report: "Away-From-Home Foods: Opportunities for Preventing Weight Gain and Obesity."
The "study" recommends that restaurants be prohibited from offering "doggy bags."
It also asks Congress to somehow force restaurants to list calorie contents and serve smaller portions. (Both the Food and Drug Administration and the Department of Health and Human Services endorsed its findings.)
Meanwhile, the Naderite Center for Science in the Public Interest - a nanny-state pioneer - has asked Congress to mandate warning labels on caffeinated beverages. Its director has said, "We could envision taxes on butter, potato chips, whole milk, cheeses and meat."
These are the kind of ideas that get the health commissars lurking in the City Council and mayor's office salivating.
Because such notions potentially give them additional control over the lives of New Yorkers.
Nanny knows best.
MAKE THAT FAST FOOD 'TO GO': COUNCIL BIG
By Carl Campanile and Mathew Charles
Call it the "McZoning Law."
A powerful city council member yesterday proposed overhauling the city's zoning rules to limit the number of fast-food restaurants in neighborhoods where obesity is epidemic among youths.
The fat-busting plan also would bar McDonald's, Burger King, Dunkin' Donuts and the like from locating near schools, said council Health Committee Chairman Joel Rivera (D-Bronx).
Rivera dropped the frying-plan bombshell during a council hearing on obesity.
"We have to be as strong with obesity as with the cigarette campaign. More people die from obesity-related issues than smoking cigarettes," said Rivera.
"We're looking at the zoning resolution to limit the number of fast-food restaurants," he added.
Rivera asked city Assistant Health Commissioner Lynn Silver, testifying before his committee, what she thought of his idea.
She said restrictive zoning seemed to be a "perfect example" of how government could help curb the fat epidemic.
Rivera said obesity is a supersized problem in a city where 21 percent of kindergarten students are already fat and 53 percent of adults are overweight.
"It's one of the best ways to tackle the obesity issue," Rivera told The Post. "In low-income areas, you find more fast-food restaurants. In more affluent areas, you find more mom-and-pop restaurants."
He said he will also look at encouraging more healthy alternatives - like farmers' markets - to open in the city's poorest neighborhoods.
Rivera, who hasn't revealed the details of his plan yet, said he plans to draft legislation and hold public hearings soon on the meaty issue.
In one of the city's fast-food meccas - 125th Street in East Harlem - on-the-go eaters were divided on the issue.
"Trying to hide a donut won't work. People will find it," said Gary Londis, a Yonkers teacher.
He said teaching kids to exercise and eat better would be more practical.
A McDonald's manager, who requested his name not be published, said it was wrong to pick on fast food. "You have to include other factors like childhood exercise," he said.
Other critics blasted the idea as anti-business and big government run amok.
"This is what you call the 'Nanny State' at its absolute worst," said Mike Long, head of the state Conservative Party.
"These businesses create jobs and generate taxes," he pointed out.
EATERY'S UNLUCKY STRIKES
RISKS CIG SHUTDOWN
By Carl Campanile
It's two more strikes (of a match) and you're out - for the first bar shut down for repeatedly violating the city's smoking ban.
Byzantio, in Astoria, Queens, was cited twice in the past two months and each time closed down for a week or less.
If inspectors catch patrons lighting up again, it would mean a monthlong closing - and a fourth offense could lead to its license going up in smoke.
"If establishments are violating the law, we will close them down," said city Health Commissioner Thomas Frieden.
The smoking ban - a top priority of Mayor Bloomberg's - has been in effect since 2003.
"Compliance with the Smokefree Air Act is at 99 percent. It is unfortunate that there are still a few restaurants that are not complying, but they are a minority," said Health Department spokesman Andrew Tucker.
"Our goal is for all workplaces to comply with the laws and protect workers."
Department inspectors spotted smokers puffing away at Byzantio on Tuesday, April 25, and its permit was revoked until the end of the week. Byzantio got nailed for flouting the law again on May 30 after customers were seen smoking, and ashtrays were distributed around the cafe. This time, it was shut down for seven days.
"If we observe smoking again, the next closure will be for 30 days, and then we will seek permanent permit revocation," the department said in a statement.
On 31st Street in the heart of Astoria, Byzantio is a sleek cafe and bar that caters to Greek-Americans and other locals. It features pulsating Greek and American pop music.
It was one of the establishments The Post highlighted last month as one of the worst offenders of the smoking ban.
Byzantio, with its survival threatened, is now urging its customers to smoke outdoors.
During a recent Post visit, no one was seen lighting up inside the bar. In fact, there weren't many patrons because the recent closures may have scared away customers and damaged business.
"We were closed down for too many violations for allowing smoking," one employee confided. "When you get closed down you get a bad reputation."
Aside from smoking, misinformation may have spread that the business is dirty and has vermin, which is not the case, an employee insisted. And that misimpression could be the kiss of death in Astoria, where there are numerous European-style cafes vying for customers. Byzantio's manager declined comment.
Health officials said Byzantio had been given numerous opportunities to stop blowing smoke at the ban before its suspensions.
MIKE'S UGLY RX
By Columnist Adam Brodsky
MAYOR Bloomberg may have been joshing last weekend when he hinted of a possible bid for president.
By Friday, he was again denying it - though he says he sends articles on the idea to his mom.
But for those who enjoy parlor games, here's a question: Suppose Bloomberg does run - and wins. What exactly would a Michael Bloomberg presidency look like?
Think: Big Government.
Actually, Huge, Obscenely Intrusive Government.
For all Bloomberg's efforts to appear above partisan politics, the guy is simply a No-Bureaucracy-Is-Too-Big liberal.
Always will be.
Mike can claim he switched from Democrat to Republican when he first ran for mayor because, after all, "There's no Democratic or Republican way to pick up the garbage."
He can pretend he's an independent; if he does go for the gold in '08, he may well run as one. "Neither political party is blameless" in letting "ideology . . . trump science in public-health decision-making," Bloomberg said in Atlanta last week.
But don't buy it.
Bloomberg can seem non-partisan only because his context is leftist New York. Anywhere else, his government-knows-best elitism would be seen for what it is: left-wing nanny-state radicalism.
Hizzoner couldn't have proved that point better than in his Atlanta talk. His premise, in essence, was that all health issues are public-health issues - that is, matters for government to deal with.
If you stuff your face with cake and pizza and then tip the scales at 300 pounds, setting you up for obesity-related diseases, that's government's problem.
If moving your thumb on the TV's remote is your only exercise, obviously government is not doing its job.
Using tobacco? The bureaucracy needs to act.
Unsafe sex? Let's not even go there.
Most folks would agree that communicable diseases are a legitimate public-policy concern. But President Bloomberg wouldn't be satisfied with that.
"Chronic and non-communicable diseases have now replaced communicable diseases as our society's most pervasive killers," he said. Which to him, of course, signals a new imperative for government intervention.
But something will always be the leading cause of death; that doesn't make it government's responsibility. Arguably, the fact that contagious diseases have grown relatively less worrisome suggests that government's role should shrink - not expand.
No matter. Hizzoner has often said that the public always wants more government services. And he certainly aims to provide them.
Nor does he care much about what's lost in the tradeoffs: whether it's social approbation, economic benefits or the simple euphoria of a few scoops of New York Super Fudge Chunk.
"These new threats result from, and are aggravated by, our forbearance, and even social and economic encouragement, of such behavior as tobacco addiction, unhealthy nutrition and excessively sedentary lifestyles."
At bottom, he believes we're all fools. "All these deadly menaces result from our choices, both as individuals and as a society, to ignore or encourage life-threatening risks."
Which is why, one supposes, he doesn't think that educational programs are enough.
"Public-information campaigns are insufficient," he said. "In the realm of public health, law really does the work."
Bloomberg means to force people, in other words, not just to wear seat belts, but to stop drinking, monitor their health, get on the treadmill.
He's right about one thing: Such thinking can't quite be characterized as liberal or conservative - because it contains elements of both the wacky, New Age left and the authoritarianism often linked to the right.
In any case, it's radical. (It certainly makes you wonder about Democrats who freak out when the feds want to look at anonymous phone records to protect Americans from terror but who don't say boo about being battered into giving up vices, in an attempt to protect them from disease.)
And it's not just the loss of personal choices that's problematic. Or the fact that Bloomberg-style bureaucrats, who claim to base their planning on scientific findings, really have little handle on the medical and economic issues involved.
On top of all this, it's fair to wonder whether such pervasive paternalism will usher in a new kind of dependency - where folks accustomed to being taken care of by Uncle Sam become incapable of taking care of themselves.
But it would be a dream come true for President Bloomberg.
PACKS & SPEND POLICY
CIG TAX-HIKE BID
By Kenneth Lovett
ALBANY - New legislation to hike the city's cigarette tax by 50 cents has been quietly introduced on behalf of Mayor Bloomberg in a bid to discourage more people from smoking, The Post has learned.
The bill, now in the Democratic-led state Assembly, would authorize the city to increase the $1.50 cigarette to $2 a pack. Approval would bring the average cost per pack in the city up to $7 or $7.50.
"The mayor urges the earliest possible favorable consideration of this proposal by the Legislature," city chief Albany lobbyist Anthony "Skip" Piscitelli wrote in a memo in support of the bill.
Assembly Finance Committee Chairman Herman "Denny" Farrell's staff estimates that the increase would mean an additional $35 million for the city and $30 million for the state.
While Farrell, who is also chairman of the state Democratic Party, said he introduced the legislation for the mayor, he stressed that he did not necessarily support it.
Farrell said he traditionally introduces tax bills put forward by the city, regardless of his views on them.
"They've been given no commitment, but you never say never," Farrell told The Post.
In his memo of support, Piscitelli cites the potential health benefits of a cigarette-tax increase. He says that after the city hiked the then-8-cents-per-pack tax on cigarettes to $1.50 in 2002, the smoking rate fell 11 percent among adults from 2002 to 2003 and an additional 4 percent in 2004.
"The additional 50-cent increase now being proposed will continue to serve as a disincentive for cigarette consumption and, therefore, lead to a decrease in the long-term health costs associated with smoking-related illness and disease," Piscitelli wrote.
But opponents argue that tax-free cigarette sales on Indian reservations, as well as cigarette bootlegging, would dramatically increase as a result of a tax increase.
"A tyrant doesn't know when he's beaten," sighed Audrey Silk, co-founder of NYC CLASH, a pro-smokers organization, when told of the new bill.
Bloomberg first raised the possibility of another cigarette-tax hike earlier this year while addressing a joint legislative budget committee in Albany.
Gov. Pataki had proposed raising the state excise tax on cigarettes as well. In the end, the Legislature rejected both requests in its final budget, with Senate Majority Leader Joseph Bruno saying he was not in favor of any new tax increases this year.
Any bump in the excise tax would be in addition to existing sales tax.
MIKE: KICK-ASH COPS ON CASE
By Stephanie Gaskell
Bar owners who illegally allow smoking should follow the rules, Mayor Bloomberg said yesterday.
After The Post reported that patrons in many Astoria bars were lighting up, Hizzoner said health inspectors were on the case.
"The rules apply to everybody," he warned.
A Post investigation found that Astoria establishments are the worst offenders. One bar has racked up 11 violations.
"The rules are you can't smoke where there are employees," Bloomberg said. "If you don't have any employees in your bar and they're all volunteers, you can smoke. It's very simple."
CIG-BAN SCOFFLAWS LIGHT UP ASH-TORIA
By Carl Campanile
Establishments in Queens - particularly the nightspots of Astoria - are the biggest violators blowing smoke at the city's 3-year-old smoking ban, The Post has learned.
Over the past year, the city Health Department issued 601 violations citywide to "smoke-easies" for permitting smoking during spot inspections, data show.
Of that total, 232 were issued to businesses in Queens, compared to 158 in Manhattan, 126 in Brooklyn, 73 in The Bronx and 12 in Staten Island.
The Bloomberg administration said the crackdown is working because in the previous year, inspectors issued 1,000 violations to smoke havens citywide.
That means the illicit smoking plummeted 40 percent.
"Compliance with smoke-free workplace laws was high to begin with, and it has increased to more than 99 percent," said Health Department spokesman Andrew Tucker.
But not in Astoria.
Incredibly, nine of the city's 12 worst violators were watering holes and eateries in Astoria that cater to smoke-happy Greek, Slavic and other European ethnics and Middle Easterners.
Penalties range from $200 for a first offense to a maximum of $2,000 and possible license revocation for repeat offenders. But a Post probe found the violations had not stopped the Astoria bars from letting patrons puff.
At two Astoria bars just blocks apart on Broadway, which serve mainly to Croatian immigrants, even the barmaids puffed away.
Health inspectors slapped Cafe Scorpio with a total of 11 violations - tops in the city - during separate inspections. Seven infractions were for failing to inform patrons not to smoke and four were for providing ashtrays.
Cafe Scorpio was a smokers' paradise during a Post visit last week, with 13 of the 15 people present smoking. The sleek, dimly lit bar was lined up with packs of cigarettes and cigarette lighters. People also smoked at lounge tables or while playing billiards, watching ballgames or viewing the Croatian news channel.
Defying the smoking ban was so accepted that the barmaid even lit up behind the bar - despite two signs conspicuously posted above the cash register that read "No Smoking" and "Smoke Free."
Scorpio also handed out small juice bottles - for smokers to deposit their ashes.
When a reporter walked in, two young boys were playing at the pool table. Smokers were all around them.
Scorpio manager Denis Lisica put up his hands in disgust when confronted by The Post and insisted he's in a no-win situation.
"My clientele are all smokers. It's a European crowd," said Lisica, during an interview in which a patron handed him a pack of cigarettes.
Lisica said the controversy will continue - unless the city either allows certain bars to become legal smoking establishments or blitzes individual smokers with steep fines for breaking the law. Currently, the merchant pays the fines.
The smoking ban also was ignored two blocks away at Cafe Valentino, where inspectors previously issued seven violations.
"Do you need an ashtray?" the barmaid asked a Post reporter who stood at the bar.
Most people at the bar or sitting in lounge chairs smoked. Shortly thereafter, the barmaid lit up her own cigarette.
A Post reporter and photographer went to Valentino a second time, acting as a couple from out of town. Asked whether smoking was allowed, the bartender said yes and handed over a cup filled halfway with water for the ashes.
"Everyone's tired. They want to relax. It's Friday," a barmaid said the following day, after the Post reporter identified himself.
Middle Eastern establishments on Steinway Street known as "hookah" lounges - where people inhale sweet tobacco from tall, water-bubbling pipes - were also repeatedly hit with smoking fines. Leading the pack was the Egyptian Cafe with 10 violations, the second most in the city.
(Click here to view Bars/restaurants with most smoking violations graphic)
TRIBES BLAST CIG-TAX SUIT
By Selim Algar
New York Indian tribes are fuming over a renewed push by the state's convenience stores to end the tax-free sale of cigarettes on reservation land.
The New York Association of Convenience Stores filed a lawsuit against Gov. Pataki last week for failing to enforce a law that would require wholesalers to charge tax on tobacco products sold to Indian businesses.
"We would shut down," said Lance Gumbs, a smoke-shop owner and tribal councilman with the Shinnecock Indian nation of Southampton. "If our cigarettes are taxed, people will have no incentive to come here, and will go to 7-Eleven."
HOSP 'CIG SHELTER' FIRESTORM
By Stephanie Gaskell
Elmhurst Hospital wants to build two specially designed, taxpayer-funded "smoking shelters," The Post has learned.
The city-funded Queens hospital sent out a request yesterday for bids to build the shelters.
But the proposal has many bar owners - who are still fuming over Mayor Bloomberg's smoking ban - up in arms.
"It's outrageously hypocritical," said Amy McCloskey, who owns Madame X in Manhattan.
"We can't smoke in bars, but the city wants to use taxpayer dollars to accommodate smokers at a public hospital?"
The two 8-by-12-foot smoking enclosures would be placed far from the hospital entrance, to encourage smokers to stop lighting up there while still protecting puffers from the rain.
But once the head of the city's Health and Hospitals Corporation got wind of the plan, he immediately put the brakes on it.
"This is not the way our tax dollars should be spent," HHC acting President Alan Aviles said.
SMOKE 'OUT' AT RIKERS
GUARDS FACE CIG BAN
By David Seifman
Correction officers and others who work on Rikers Island would have to leave their cigarettes at the main entrance as part of a plan to contain the jail's black market in tobacco, officials said yesterday.
"That's one of the things being discussed," said Norman Seabrook, president of the Correction Officers Benevolent Association, responding to a Post report that a single illegal cigarette is fetching as much as $20 in city jails.
Inmates haven't been allowed to smoke since the city imposed a ban in March 2003.
But correction officers and other workers still enjoy the privilege, creating what officials describe as a "corruption hazard."
Seabrook, a smoker himself, said he would vigorously oppose any effort to stop his members from lighting up.
But he readily agreed to a possible compromise requiring that tobacco products be checked at Rikers' front gate, where they'd be accessible to nicotine-dependent workers.
"I think it's a home run for everybody," said Seabrook. "It protects the smoker. It protects the nonsmoker. It protects the safety and security of the institution."
Correction Commissioner Martin Horn pledged to work with Seabrook and other union leaders to "do whatever it takes to keep the jails safe."
On Wednesday, the Department of Investigation announced the arrest of six city workers, including three correction officers, for allegedly smuggling drugs and tobacco into Rikers.
Typically, the corrupt officers collect their payoffs from inmates' girlfriends or associates outside the jails, authorities said.
One correction officer told The Post that resourceful inmates have been known to sneak in discarded butts after trips to court.
"They take the tobacco, pull out a sheet of toilet paper and make a cigarette," explained the officer.
Asked where they'd get a light, he responded, "You take a pencil, stick it into the light [fixture] and you have a light quicker than with a match."
The officer confirmed Investigation Commissioner Rose Gill Hearn's report that illegal smokes are going for $10 to $20 apiece.
In fact, he said, the rate can hit $40 in "the brig," the solitary-confinement unit.
HOLY SMOKE! $20 PER JAIL CIG
RIKERS GUARDS NAILED IN BLACK-MARKET SMUGGLING
By David Seifman
The smoking ban imposed in city jails three years ago has made cigarette smuggling so lucrative that a single smoke can command up to $20 from nicotine-starved inmates - leading to concerns about corruption behind bars, officials reported yesterday.
News of the thriving sky-high black market came as the Department of Investigation announced arrests in separate cases of three correction officers, two cooks and a nurse's aide on charges of taking bribes of $50 to $1,000 to sneak tobacco, cocaine and a cellphone onto Rikers Island over the past year.
Two of the suspects - Correction Officer Glenda Glenn and nurse's aide Cleveland Porter - were the first to face criminal charges for cigarette smuggling since the new rules were enacted in March 2003.
"When the ban went into effect in 2003, that created a market and an opportunity for people who were going to want to continue to smoke in the fa- cility and it has created a corruption hazard and a bit of a black market," said Investigation Commissioner Rose Gill Hearn.
She said a single cigarette could fetch $10 to $20.
A bag a loose tobacco that stores sell for $2 might bring $40 to $50 in the illegal Rikers Island market.
While cigarettes are considered contraband for prisoners, they're perfectly legal for correction officers and others who work in the jail system. But perhaps not for long.
"In light of these charges, [Correction] Commissioner [Martin] Horn and Commissioner Hearn are going to examine to what extent they will allow employees to carry personal amounts of tobacco," said Deputy Correction Commissioner Richard White.
That brought an angry response from Peter Meringelo, president of the Correction Captains Association, who warned in 2003 that the smoking ban would cause major headaches.
He said he would vigorously fight any attempt to block correction personnel from smoking.
"If that's their vice in life, they should be allowed to enjoy it," Meringelo said. "They work a very tough job."
Norman Seabrook, president of the Correction Officers Benevolent Association, said he would also fight any attempt to restrict smoking by his members.
"I would have a major problem with that," he said. "Nicotine is proven to be addictive."
Like Meringelo, Seabrook described smoking as a way for correction officers to wind down from their tense jobs.
Glenn and Porter face up to seven years if convicted of a variety of charges, including bribe receiving.
The other four suspects were all accused of smuggling or agreeing to smuggle fake cocaine provided by undercover agents posing as inmates' girlfriends or by cooperating inmates.
They face sentences that could range up to life imprisonment.
In July 2003, DOI arrested seven city employees, including two correction officers, for smuggling drugs into jails. All pleaded guilty and were sentenced to terms ranging from 45 days to six years.
MORE PUFFERS HEEDING BLOOMY'S SMOKE CIG-NALS
By Carl Campanile
Complaints of illegal smoking in city bars, restaurants and other public places have plummeted 23 percent in the last year, The Post has learned.
The city Health Department received 2,283 complaints about defiant smokers puffing in forbidden indoor venues from July 1, 2005 through March 31, 2006.
The city received 2,959 complaints about violations of the smoking ban during the same time period the previous year.
The Bloomberg administration attributed the decrease to better compliance and a drop in the number of smokers since the Smoke Free Air Act was approved in 2002.
The tough ban - which drew anger from smokers and civil libertarians across the city - went into effect in March 2003.
"I mean it's not 100 percent compliance, but damn close to it," Bloomberg recently said on his WABC radio show.
City health officials said there are 200,000 fewer smokers than there were four years ago.
New Jersey followed last weekend when it imposed its own smoking ban.
Health officials in the Garden State said yesterday everything went smoothly- in part because residents there were already conditioned to smoke-free rules in neighboring New York and Delaware.
THE INDIAN EXEMPTION
Gristedes makes a good point in a lawsuit it filed yesterday, nudging
Albany to make vendors on Indian reservations pay cigarette taxes: Giving
the Indians a free ride on the taxes is not only unfair to other retailers
- it's also illegal.
Foolish policy, too.
"We're losing a lot of business, and so are a lot of small businesses," says John Catsimatidis, Gristedes' chairman.
In the suit, filed in Brooklyn Federal Court, the supermarket chain says permitting the reservation sales of untaxed cigarettes, even to non-Indians, has created "a thriving black market" for smokes.
Gristedes is looking for more than $60 million in damages from two Indian tribes in Long Island, the Unkechaug and Shinnecock nations.
You can't blame the company for suing.
After all, if it has to pay the taxes, then why shouldn't its competition - the stores and Internet retailers on Indian reservations - also pay?
In fact, state law says they do have to pony up.
But Gov. Pataki decided to ignore that law, telling Indian shopowners they needn't bother.
Pataki & Co. say they're trying to work out a plan "that makes sense."
Meanwhile, honest retailers are losing millions of dollars in sales.
No one should be surprised, of course, that smokers look to pay as little as possible - and thus flock to Indian shops and Web sites that can charge less because they don't pay taxes. The Senaca tribe, for example, sells cartons of Marlboro for about $30 apiece, while the going rate in Gotham is around $70.
Skirting tobacco levies has been a well-established practice in New York ever since the city and state first imposed them in the late '30s.
Officials like Mayor Bloomberg claim that such taxes lead to less smoking. But data from the Centers for Disease Control suggest otherwise.
Even Mayor Mike, in crediting cigarette-tax hikes with lower rates of smoking among kids, admitted that lighting up also fell before the hikes took effect.
So why credit the tax with a drop?
In fact, the notion that many folks will give up cigarettes when you raise the tax is deeply flawed, because smokers can simply flout the levy - buying from other states, the Internet, criminal "buttleggers" or exempt Indian tribes.
All of which makes taxing tobacco (at $3 a pack in the city) a godsend for organized crime.
"In New York, it is literally more profitable to hijack a cigarette delivery truck than an armored truck," one official quipped back in 1989 - when taxes were far less onerous.
Meanwhile, retailers who obey the law and pass along taxes to their customers are penalized - losing millions in sales.
Pataki has no right to discriminate in favor of the tribes - even if he fears riots like those seen when the state tried to collect taxes on reservations in the '90s.
If Albany won't make tribes pay, it shouldn't make anyone else pay, either. Which raises a better idea for leveling the playing field: Just scrap the tax altogether.
CITY SMOKING OUT TAX EVADERS
By Stephanie Gaskell
If you've ever bought cigarettes online from a company called eSmokes, Uncle Sam wants you.
As part of a bankruptcy settlement, the Virginia-based company agreed to hand over thousands of names of New Yorkers who bought cigarettes from them from 2000 to mid-2003.
City officials said the information, which also includes the dates and quantities of the sales, could net up to $33 million.
"When you buy cigarettes over the Internet, you have to pay New York City and New York state taxes, regardless of what any Web seller advertises," Mayor Bloomberg warned yesterday. He said the city should do everything it can to enforce the cigarette tax law.
"We have an obligation to level the playing field for retailers who play by the rules and collect taxes that support vital services for all New Yorkers," he said.
Bloomberg urged any New Yorker who bought cigarettes online without paying taxes to call 311.
The city has already collected nearly $1 million in back taxes from New Yorkers who have voluntarily come forward.
BLOOMBERG BEGS FOR MORE CRIME
Mayor Bloomberg's recently announced budget includes jacking up the city's tax on cigarettes another 50 cents.
Says Mike: "There's a clear correlation . . . You raise your cigarette taxes, fewer children go and smoke."
Actually, according to the Centers for Disease Control, New Yorkers' smoking habits mirror national trends; tax hikes have no evident effect. But that's beside the point.
The mayor really should deal with certainties — one of them being that organized crime would make a killing.
New York's history with cigarette taxes is a long, sordid and embarrassing tale, as documented in an insightful study by Patrick Fleenor.
The city's first tax on smokes came in 1938 and was, like all new taxes, "temporary." Politicians assumed the penny-per-pack levy would be innocuous.
The reverse was true: Cigarette bootlegging, crime associated with bootlegging and "border-shopping" (buying smokes from outside New York) immediately became problems.
When the state levied a tax in 1939, the problems grew.
In 1964, after the U.S. Surgeon General issued the famously damning report on the health effects of smoking, New York lawmakers jumped at the opportunity, doubling the tax from 5 cents to 10.
"From that very moment, bootlegging became a major problem," says Roy Goodman, the city's finance administrator at the time.
When mobsters forced amateurs out of the burgeoning buttlegging trade, Goodman called cigarette smuggling the "principal stoking facility of the engine of organized crime."
Eventually, the threat of hijacked trucks made shipping cigarettes so dangerous that trucking companies had to form convoys, and the costly security measures put some firms out of business.
In response, the city and state devoted more resources to combat bootlegging and expanded relevant police powers.
Nonetheless, in 1965 the anti-bootlegging campaign turned up a total of only 70,000 cartons of illegal cigarettes.
And bootlegging got much worse when, in 1968, the state tax jumped yet another 2 cents.
In 1970, the city's stepped-up enforcement netted a stunningly slim 1,000 cartons of contraband cigarettes. This, though the State Department of Taxation said that more than 112,000 illegal cartons were entering the state every day.
In 1972, the state tax rose to 15 cents per pack. Buttlegging boomed — and taxed sales fell.
A study for then-Gov. Nelson Rockefeller linked a host of crimes to buttlegging — including "attempted murder, torture, kidnapping and armed robbery" — and concluded that efforts to enforce taxes were "completely ineffective and a failure."
The report recommended a total repeal of the city's smoking tax.
It never happened.
In 1976, the state's Special Task Force on Cigarette Bootlegging and the Cigarette Tax again recommended abolishing the tax, citing an uptick in lethal crime associated with it.
Now fast forward to 2001.
State taxes rose to $1.11 a pack, and Gov. Pataki was forced to dedicate yet more tax dollars to battling buttleggers.
He also signed into law a ban on cigarette sales on the Internet, which had been crippling local sales. (A federal court later struck down the Web-sales ban as unconstitutional.)
In 2002, Mayor Bloomberg jacked up the tax from 8 cents to $1.50. Combined with a state tax that also grew to $1.50, New Yorkers now faced a tax bill of $3 per pack. It was a bootlegger's dream come true.
And, sure enough, the Bureau of Alcohol, Tobacco and Firearms (ATF) has reported a surge in regional tobacco thefts, with spillover effects in nearby states.
Since 2003, a violent wave of "cigarette wars" has hit town, leading to no less than three deaths. In one such killing, a black-market smokes dealer was killed for underselling a competitor.
Says John Dugan, an area supervisor for the ATF: "When it comes to smuggling and counterfeit [cigarette] stamps, traditional organized crime is involved, terrorist groups are involved and street gangs are involved."
Indeed, cops found counterfeit cigarette-tax stamps in the apartments used by the Egyptian Islamic Jihad group behind the 1993 World Trade Center bombing, a group that later merged with al Qaeda.
Suspected members of an al Qaeda sleeper cell in Buffalo, the "Lackawanna Six," are said to have been involved in the trade, as have captured Hezbollah agents in North Carolina.
No surprise there: The city's sky-high cig taxes have turned packs into gold.
If it's raised another 50 cents, as Mayor Mike wants, a case of 60 cartons will have a retail price of nearly $5,000.
This makes legal tobacco retailers a prized target for criminals. As one official at the Department of Taxation and Finance Tax Enforcement Office quipped, "In New York it is literally more profitable to hijack a cigarette delivery truck than an armored truck."
Alongside jumps in illegal activity related to avoiding cigarette taxes, sales of taxed cigarettes in New York have fallen every time the state and city have increased levies.
Which doesn't mean the hikes get New Yorkers to smoke less, but rather that they buy more cigarettes illegally or across state lines — and that legitimate retailers take a hit.
Money that would go to New York grocers instead goes to North Carolina and other low-taxed locales.
And consider this: Because everyone is avoiding the tax, revenues — so dear to lawmakers — don't even rise very much (if at all) from the hikes. In fact, quite the opposite: In 1994, when Canada cut its mindless $5-a-pack tax in half, revenues actually rose.
Mayor Bloomberg's compassion is heartening, but it's folly for him to think himself capable of altering human nature through taxation.
Slashing butt taxes — and thus freeing up tax dollars now spent to vainly enforce a levy that brings in comparatively little revenue — would strike a blow to New York's underworld.
Call us old-fashioned, but we still believe that instilling kids with good habits is the job of their parents; a mayor's job is to go after organized crime and terrorists.
If Bloomberg believes otherwise, he should at least be honest about it.
NAILING CIG-TAX CHEATS
By David Seifman and Heather Gilmore
The city has come up with a new 10 Most Wanted list — serial cigarette scofflaws who will have to cough up upwards of $40,000 for buying bushels of butts online.
The smokers likely thought they were being savvy by ordering hundreds of cartons of smokes from Web sites and not paying tax on the orders, the city said.
But the end result is they've puffed the most expensive cigarettes on earth, with the city billing them $1.50 per pack for unpaid taxes, with an added penalty of $100 per carton.
The city Finance Department is hunting down 194 Most Wanted Smokers who, the agency said, failed to respond to two written requests over the past year to settle up. The Post exclusively obtained the top 10 list. Eight of the worst offenders owe heart attack-inducing penalties of more than $20,000.
No. 1 on the list, Thomas Faernstrom, is accused of buying 377 untaxed cartons since July 2002, when the city's tax on cigarettes soared. He's been billed $43,355, representing $5,655 in taxes and $37,700 in penalties.
A man who answered the door at Faernstrom's most recent listed address in Bensonhurst said the alleged butt hoarder didn't live there, and a phone number at his current listed address in Richmond, Va., is disconnected. Others on the list have also proved elusive. The city said two on the list of 194 have died.
The Post successfully tracked down one of the alleged Top-10 scofflaws in Florida. The former New Yorker, speaking on the condition of anonymity, said he was not happy about the city's crackdown. "It's ridiculous. They're such a--holes. I haven't got anything in the mail here," he said. "The bastards. I got those cigarettes legally from an Indian reservation over a period of years; this is just revenue-raising."
A BUTT-TAX INDIAN GIVER
By John Catsimatidis
John A. Catsimatidis is CEO Of Red Apple Group, which operates 45 Gristede's supermarkets in New York City
and more than 200 convenience stores and gas stations upstate.
PROPOSALS by Gov. Pataki and Mayor Bloomberg to increase New York's cigarette taxes, already among the nation's highest, will slam the small businesses that collect them — unless the state finally enforces its rights to collect cigarette taxes from American Indian reservations.
Right now, an estimated $400 million in tax revenue escapes through this gaping loophole every year.
The U.S. Supreme Court ruled in 1994 that New York could collect sales taxes from the reservations on cigarettes sold to non-Indians — and the Legislature long ago passed laws to enable collection. Yet the state still declines to actually collect the taxes.
Yes, the state has been cracking down on untaxed cigarette sales over the Internet — and made big steps by getting most major credit-card companies to not honor transactions at Indian reservation retailers and by persauding two major shipping firms to not handle reservations' deliveries.
But that's not enough. Just this week, a reservation on Long Island placed an ad in a city newspaper soliciting cigarette orders by mail or phone, with payments accepted in personal checks or money orders, and delivery by U.S. mail. Advertised prices per carton amounted to about half of what the cigarettes would cost at stores off the reservation.
A carton of cigarettes in New York now runs at least $47.62, including $15 in state excise tax, outside the city — and at least $64.30, including $30 of state and city excise taxes, in the five boroughs. The governor wants to hike the state tax to $25 — while offseting the city tax to amount to no net increase in New York City proper. But Mayor Bloomberg is eyeing a city tax increase of $5 per carton.
On the reservations off-brand cigarettes run as low as $20 a carton and regular brands as low as $25 — because they're all sold tax-free.
If taxes are increased again, there should be no doubt in anyone's mind where even more New York consumers are going to purchase their cigarettes.
It's not just lost tax revenue. Non-reservation retailers lose income when their customers opt to buy from the reservations. Eventually, this leads to loss of jobs, which upstate especially are already scarce.
I don't argue with the sovereignty rights of the reservations. Nor do I question the state's right to set taxes and direct non-reservation retailers to collect them, or to enforce such policies as checking ID to make sure consumers are of legal age to buy cigarettes. But the playing field must be level.
Gov. Pataki twice has set a date to begin collecting the taxes from the reservations. Yet apparently the collection date has been moved yet again, to March of 2007 — after Pataki (conveniently for him) has left office.
Enough is enough. It is time to show respect for the law and equalize the obligations on all cigarette retailers in New York, both on and off the reservations. Unless that happens, any increase in taxes unfairly will hurt the law-abiding businesses that collect them.
WEB BUYERS $MOKED OUT
By David Seifman
Price-conscious smokers who thought they landed fantastic bargains on the Internet have been hit by the city with bills totaling nearly $1.4 million, officials said yesterday.
A crackdown on tax-free cigarette sales on the Web hauled in $695,479 from 2,156 puffers out of the $1,354,880 demanded in the first round of bills sent out to 3,780 New York City residents through May.
A second round in August took in another $169,990 out of $507,000 due.
Now, officials say, they're ready to get really serious and impose a $100-a-carton penalty — plus the $1.50-a-pack tax.
"We want voluntary compliance," said Finance Department spokesman Sam Miller. "Now that we've sent out three notices, it's not so voluntary anymore."
EVEN SMOKERS BACK CIG TAX
By David Seifman
A big majority of New Yorkers — and many smokers — support Mayor Bloomberg's proposed 50-cent hike in the cig tax, which would make the average price $8 a pack.
A Quinnipiac University poll found 71 percent supported the tax, including 36 percent of smokers, a sign they're desperate for any excuse to quit.
The poll also confirmed that fewer New Yorkers are smoking. Only 17 percent said they had smoked in the past week, compared with 23 percent in April 2001.
[NYC C.L.A.S.H. Note: Why wouldn't the three quarters of the non-smoking population not support a tax they wouldn't have to pay and that would take any tax target off their backs? They don't think about the question on the basis of principles -- the response is purely economics-driven. It's those 36% of self-hating, weak, government-dependent to help them live their lives that are the problem. They drag the rest down to their pathetic level of inviting the government in to make personal decisions for you]
PROMISES, UP IN SMOKE
Poof. A promise from Mayor Bloomberg just went up in smoke.
Expanding on one of his campaign's themes, Mayor Bloomberg said just days before the election, "If we focus on trying to do a little more with less, with the expansion of the economy, we will get through [next] year without any tax increases or fee increase."
Of course, only 48 hours after being re-elected, Mayor Mike was pledging to reinstate a commuters tax. (Fortunately, however, that plan appears to have been tossed into the dustbin of bad ideas.)
But Bloomy's back at it: Last week in Albany he was seeking to raise the city's levy on cigarettes even higher.
"I think another 50 cents might be good," he said. "Nobody likes taxes . . . but cigarette taxes are different."
Actually, they're not. A tax is a tax.
Just because a tax's targets are society's villains du jour — smokers, double-parkers (even legal parkers, according to some reports) — doesn't justify disproportionately increasing their share of financing the government. Profiting off the vices of others is a vice in itself.
It's no secret that Mayor Mike, an ex-smoker, is a born-again health fanatic. But this is getting ridiculous. Hizzoner's already hiked the city cigarette tax a full 1,875 percent!
This addiction to cigarette-tax dollars is seriously unhealthy.
Isn't it time to kick the habit?
POLS JOIN A$H FRAY
By Kenneth Lovett
ALBANY — Mayor Bloomberg's call for another cigarette tax hike was met with support yesterday from Assembly Speaker Sheldon Silver but avoidance from Senate Majority Leader Joseph Bruno.
Silver said he "probably could" support the proposed 50-cent city excise-tax increase.. But he expressed concern the move could promote more illegal cigarette imports.
Bruno, an avid anti-smoker on record against any tax increases in this year's budget, dodged comment on the proposal.
"All of this is going to be part of the budget in terms of revenue needs, health-care needs and Medicaid needs, so I won't be addressing people's comments in isolation," Bruno said.
A PAIN IN THE BUTTS
By Kenneth Lovett
ALBANY — Smokers, beware.
Mayor Bloomberg is ready to give you another butt-kicking by hiking the city tax on cigarettes.
Bloomberg told reporters yesterday he would like to boost cigarette taxes by 50 cents a pack in the city, which would raise the overall city tax to $2 a pack on top of the $1.50 state tax.
A Bloomberg aide said a final number has not been decided upon, but the mayor is set to include the call for a higher tax in his State of the City address on Thursday.
"Here's our chance to save lives, particularly among our children who perhaps don't know how dangerous smoking can be," the mayor said.
Smokers were incredulous, calling it "another assault on one quarter of the population."
Currently, with all taxes factored in, a pack of cigarettes in the city goes for an average of $7 to $7.50. The city in 2002 raised its cigarette tax to $1.50, up from just 8 cents a pack.
"The attempt by government to change legal behavior that they disapprove of by theft is un-American, un-Republican — and this from a man who said no new taxes this year," said Audrey Silk, of the city-based pro-smoking group NYC CLASH.
Bloomberg said he would use any extra revenue to help fund smoking-cessation and education programs.
He argued that since the last increase four years ago, there are 200,000 fewer smokers and believes another increase would further keep teens from trying cigarettes. The mayor said he opposes Gov. Pataki's plan to increase the state sales tax on cigarettes by $1 while subsequently lowering the current $1.50 city tax by $1.
Pataki's plan would then reimburse the city the $78 million it would lose from the change.
"If we make any change at all in the cigarette tax this year, we must raise the tax that the city can collect on cigarettes, which would provide the city with additional revenues to spend on new public-health efforts to prevent and stop smoking," he told lawmakers.
Lawmaker reaction was mixed.
Senate Majority Leader Joseph Bruno, who is anti-smoking, has insisted
he does not want to raise any taxes this year and has been cool to the
governor's plan to raise the state cigarette tax.
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Mayor lauds cig tax plan
By Frank Lombardi
A push for a $2-a-pack cigarette tax by neighboring suburban counties
got an attaboy from Mayor Bloomberg yesterday.
"New York City would love that," he said.
The city participated in a recent conference with suburban officials to discuss asking the state Legislature to authorize a $2 cigarette tax for the suburbs, which currently don't impose a separate local tax.
As part of that effort, the city would seek to add another 50 cents to its current $1.50-a-pack tax. That would make for a uniform $2 cigarette tax in both the city and suburbs.
Because "the price would be the same," smokers - especially teens - would have less incentive to go out of the city to buy their smokes and might quit instead, the mayor maintained.
Increase the age to buy cigs? Pols want to make teens wait, but critics say it goes too far
BY JAMES F. GENNARO
Every day, 40 New York City schoolchildren start smoking and, as a result, 13 will die from smoking-related illness. This horrifying statistic predicts that this year alone, almost 5,000 of our children will get hooked and be sentenced to early death by smoking.
Thanks to the efforts of Mayor Bloomberg and the City Council, New York City has become a national leader in anti-smoking efforts. Through the combination of the smoking ban, increased cigarette taxes and smoking cessation programs, smoking rates in the city have begun to decrease. But there is still much more to be done, especially to keep cigarettes out of the hands of those at greatest risk - our children.
On Thursday, the City Council heard two bills that would raise the legal age to purchase cigarettes. The bill I have sponsored would increase the age to 19 - but I'd also support a raise in the age to 21; the only unacceptable policy is the status quo.
There are compelling reasons why raising the age by just one year would be an effective tool in the fight against underage smoking. According to the Center for a Tobacco Free New York, almost 90% of life-long smokers started smoking before age 19. A study by the Centers for Disease Control and Prevention found that the earlier teenagers start smoking, the worse their addiction will be.
By increasing the smoking age to 19, New York City would mirror the laws in our neighboring counties of Nassau and Suffolk. New Jersey also recently joined Alaska, Utah and Alabama in raising the smoking age to 19. And there is ample evidence that these measures have worked. According to the CDC, teenage smoking rates have dropped in Alaska, Utah and Alabama since the legal smoking age was raised.
Increasing the smoking age alone is not the silver bullet to end teen smoking. However, in combination with greater education, decreasing tobacco marketing to youth, and other anti-smoking measures, it can make a real difference.
The legal drinking age was raised to protect our children from the dangers of alcohol. The time has come to do the same to protect our children from the deadly consequences of smoking. And we should do it now.
Gennaro, a Democrat, is chairman of the City Council's Environmental Protection Committee.
BY AUDREY SILK
City Council members are pushing two proposals on teen smoking. One
would raise the legal age for buying tobacco from 18 to 19 and the other
would raise it all the way to 21. To justify the necessity of such law,
they recite all sorts of statistics on the dangers of youth smoking. But
none of those assertions are relevant to this debate. Because in the end,
we're talking about the actions of adults - and the unconscionable way
these laws are designed to strip them of their adulthood.
The rationale behind raising the age to 21 has absolutely no legitimate basis. It's government paternalism at its worst. Those having the legal power to redefine adulthood will do so if that's what it takes to impose their will on others. The unique intolerance for anyone smoking is the anti-smokers' excuse to reduce adults to the status of children.
Cigarettes are legal. Responsibility, not risk, is the issue at hand. At 18, one is deemed adult enough to make all kinds of important choices - to marry, to serve in the military (an immediate risk to health these days), and to vote for the very people who think they're not smart enough to make an informed decision.
Commit a crime at age 16 and you're charged as an adult! Why? Apparently that is already an age at which government believes they should know better.
One bill sponsor claims risk trumps all. But life is full of risks. If risk is the measure, then at what age are we safe from the politicians' tyranny?
For the record, my organization is not in the business of encouraging anyone to smoke, and we believe that minors shouldn't smoke. But there is a law already on the books that covers this. Sales to minors are illegal. Enforce it and leave the adults alone.
Silk, a retired NYPD police officer, is founder of NYC Citizens Lobbying Against Smoker Harassment (NYC CLASH).
Mayor's cig snub leaves pols in huff
By Greg Wilson and Michael Saul
Mayor Bloomberg gave one thumb down and signaled he may give one thumb up to two proposals by city lawmakers to curb youth smoking - snuffing out a plan to raise the age for buying tobacco, but hinting he may be for banning candy-flavored smokes.
"I've always opposed banning products per se," Bloomberg told reporters even as the City Council Health Committee was holding hearings on its proposals. "We do ban some products and we're talking about it at the moment, and I'm not sure where we'll come out on it."
But raising the age for buying tobacco products, either to 19 or to 21 from the present 18, is a no-go for Hizzoner, who said he may veto such a bill if it ever finds his desk.
"The best way to reduce smoking among young people is to raise cigarette taxes," Bloomberg said, adding that hiking the age for buying tobacco may just make smoking even "more fashionable" for youngsters.
Health Department Assistant Commissioner Sarah Perl echoed her boss's objections to raising the age in testimony before the committee, leaving lawmakers stunned.
"I don't think the Health Department believes this testimony," fumed Councilman James Gennaro (D-Queens). "I'm flabbergasted."
No cigs at 18?
City may up age for buying butts
By Ethan Sacks and Greg Wilson
City lawmakers are considering raising the legal age for buying cigarettes, but this time New York's most famous anti-smoking crusader is not going along with the pack.
A City Council committee is preparing a bill that would raise the age for buying smokes to either 19 or 21 from the current 18. But Mayor Bloomberg, who spearheaded the city's widely duplicated ban on smoking in bars and restaurants, is against the bill.
"The mayor is not in favor of raising the legal smoking age," Bloomberg spokeswoman Virginia Lam said. "He supports efforts to help curb underage smoking and to expand smoking cessation programs."
Sources said the City Council's Health Committee expects to choose between two measures when it meets on Thursday: one raising the age for buying tobacco to 19 and the other raising it to 21.
Queens Councilman James Gennaro, who sponsored the version putting the legal age at 19, said he wrote his bill based on laws passed in Alabama, Alaska and Utah, as well as in Suffolk and Nassau counties.
"I'm for whatever is realistic and doable," Gennaro said.
Bronx Councilman Joel Rivera, the committee chairman, wants to make it illegal for anyone under 21 to buy cigarettes. Rivera could not be reached for comment, but Gennaro said he would sign on to Rivera's version if it prevails in the committee.
Lam would not speculate on whether Bloomberg would veto either bill, should one emerge from the Council.
But Bloomberg has an unlikely ally in Audrey Silk, a retired NYPD officer and founder of Citizens Lobbying Against Smoker Harassment. Silk, who railed against Bloomberg's smoking ban, said the proposal is part of a process of "infantalizing adults."
"These politicians would be more than happy to put their arm around an 18-year-old and say, 'Vote for me,'" said Silk. "Eighteen-year-olds are smart enough to do that. But they aren't smart enough to use a legal product."
Gennaro said risks trump Silk's concerns. Citing statistics from the American Lung Association, he said 40 New York City schoolkids take up smoking each day, and 13 of them will eventually die from tobacco-related diseases.
Not surprisingly, young smokers balked at the lawmakers' plans.
"Honestly, kids are going to smoke no matter what," said Richard Arriaga, 19, of the Bronx. "I started smoking when I was 10, and pretty much anyone could get a cigarette."
Andrew Rodriguez, 17, a high school student who lives near Union Square, said he's been having others buy his smokes for years.
"I've been looking forward to buying them legally," he said. "I'm sick of having other people buy them for me. It makes me feel sneaky and sleazy. If it passes, I would be outraged."
Fumin' Mike has got an ash to grind
Pledges 125M to fight tobacco
By Michael Saul
Mayor Bloomberg pledged to donate $125 million from his personal fortune yesterday to create the "Worldwide Stop Smoking Initiative," marking the largest- ever donation in the global anti-tobacco crusade.
Bloomberg, a former puffer who spearheaded the citywide ban on smoking in public places, described tobacco use as "one of the world's biggest killers."
It's a scourge that philanthropists "sadly" have overlooked, he said.
"There are roughly 5 million people who are killed by tobacco in this world each year, and, unless we take urgent action this century, a billion people will die from smoking," Bloomberg declared. "We know how to save millions of lives, and shame on us if we don't do it."
Bloomberg said his donation will provide the "initial funds" over the next two years for his campaign to "help the world become tobacco-free."
The mayor plans to join with existing organizations to improve anti-smoking programs, educate communities about the harms of tobacco and develop a system to monitor the status of global tobacco use and tobacco-free programs.
Bloomberg also plans to devote some of the money to help governments pass laws that would tax cigarettes, prevent smuggling and protect workers from secondhand smoke.
David Momrow, senior vice president for cancer control with the American Cancer Society's Eastern division, described Bloomberg's donation as unprecedented.
"We're delighted," Momrow said. "His message and his commitment of personal dollars makes a tremendous statement."
Bloomberg, who has taken on several national issues in recent months, has said repeatedly that he plans to become a full-time philanthropist when term limits force him out of office on Dec. 31, 2009.
The 64-year-old mayor recently bought an upper East Side building to serve as a headquarters for his philanthropy.
The mayor said yesterday he hasn't had a cigarette in "probably 25 or 30 years," and, since he's taken office, there are few issues he speaks about more passionately.
There are currently 200,000 fewer smokers in New York City than four years ago, and smoking among teenagers is down 36%, the mayor noted.
"There's no question that if you could get people to stop smoking, you would save tens of millions of lives," he said.
City to smokers: Cough up 7M in owed Net taxes
By Frank Lombardi
More than 16,000 New Yorkers who bought cheap cigarettes over the Internet are now tax targets of the city.
City officials announced yesterday that they intend to go after the smokers - who bought from www.dirtcheapcigs.com, a now-defunct Web site - for nearly $7 million in unpaid cigarette taxes.
The city obtained the names of the smokers through a legal settlement with the former Kentucky-based firm.
The sellers ignored a state law barring the sale of tax-free cigarettes to New York State residents.
Violators face a potential civil liability of three times the uncollected taxes if the city eventually wins its suits.
This is the fifth and largest such settlement the city has won since filing a series of federal civil suits in 2003 against some 40 Internet tobacco merchants, according to attorney Eric Proshansky of the city's Law Department.
The four prior settlements involved a combined $4.5 million in unpaid city cigarette taxes owed by 15,682 buyers.
So far, more than $800,000 in unpaid taxes has been collected from smokers who opted to pay within 30 days after getting dunning letters - rather than risk penalties of up to $200 for each untaxed carton they had bought.
Collection efforts, which could include filing property liens or salary garnishees, are still in the works for buyers who haven't coughed up their unpaid cigarette taxes.
"We have an obligation to collect all taxes owed to the city and create a level playing field for local retailers who properly collect the cigarette tax," asserted Finance Commissioner Martha Stark.
The buyers in the latest settlement made their Internet buys from 2000 to mid-2003.
Report's all smoke and mirrors
By Sidney Zion
If President Bush announced that secondhand smoke kills more Americans than the Iraqi insurgency, AIDS, drunken drivers and Katrina put together, would we nod in agreement — or look to Bellevue, if not to impeachment?
Comes now Richard Carmona, the surgeon general of the United States, telling us that secondhand smoke kills 49,000 Americans a year — and there's no outcry, no notion that maybe this is nuts. Instead, the mass media buys it without question, and so apparently do the people.
Does anybody out there know anything about Carmona, or even that he's the surgeon general? In 2003, he appeared before the Congress and came out for prohibition of tobacco. Which doesn't exactly make him a neutral scientific observer of the danger of secondhand smoke.
In fact, his 700-page report is full of junk science, delivered across 20 years by a band of willful anti-smoke zealots who understood that in order to get people to quit the habit, they had to promote the idea that smokers were destroying innocent bystanders, including their own children.
What the surgeon general never tells us is that the whole deal is entirely statistical — there are no autopsies, no direct evidence whatsoever. It is all computer generated: The computer is asked, if secondhand smoke kills, how many people will it kill?
For active smoking, there is plenty of direct evidence. More smokers die than nonsmokers. What the anti-smoke zealots have brilliantly done is to conflate the two: Smoking kills, therefore secondhand smoking kills.
The evidence is decidedly the other way. Every major study tells us this, including those done by the World Health Organization, the Congressional Research Service, the U.S. Department of Energy and a massive 35-year study financed for years by the American Cancer Society.
Against all this, the surgeon general, who never conducted his own study, says that "the debate is over," there is no longer any question about secondhand smoke. Dr. Robert Madden, former president of the New York Cancer Society, and a chest and vascular surgeon, told me it's "baloney," nothing but "junk science."
Dr. Elizabeth Whelan, president of the American Council on Science and Health, is also a longtime opponent of smoking. But to her, the idea that a 30-second exposure to secondhand smoke can kill — as says the surgeon general — is "outrageous." "It violated the basic tenet of toxicology: 'Only the dose makes the poison.'"
But who cares for dosage, when the ends justify the means, and political correctness rules the world.
2nd-hand smoke a killer: top doc
By Jordan Lite
Second-hand smoke is killing tens of thousands of Americans every year and banning indoor smoking is the only way to stop it, the U.S. surgeon general said yesterday.
"The debate is over. The science is clear: Second-hand smoke is not a mere annoyance, but a serious health hazard," said U.S. Surgeon General Richard Carmona.
Nearly half of nonsmoking Americans are exposed to second-hand smoke, despite an upswing in restrictions on tobacco, according to the first surgeon general's report to look at the problem in 20 years.
The use of ventilation and air cleaning systems, and physically separating smokers, doesn't keep second-hand smoke from threatening nonsmokers with cancer, asthma and other problems, the report said.
"It confirms what we said three years ago, that second-hand smoke kills. There's no safe level of exposure and there's no reason that people who are not smokers should be exposed to other people's carcinogens," said city health Commissioner Dr. Thomas Frieden.
Fourteen states, including New York, ban smoking in restaurants, bars and the workplace. The new report is likely to fuel further efforts to restrict smoking.
New Yorkers fed up with unwanted smoke in their apartments are increasingly complaining to their neighbors, even asking landlords to declare their buildings smoke-free, said Joanne Koldare, director of the NYC Coalition for a Smoke-Free City.
A poll by the coalition showed that 70% of New Yorkers want to live in a smoke-free building, and that 50% would pay more to live there.
Smoking advocates weren't swayed by Carmona's report.
"It has nothing to do with science; it's a religion now. It's about eradicating smoking, not second-hand smoke," said Audrey Silk, founder of the smokers' rights group NYC CLASH.
Sour reax to candy cig
By Frank Lombardi
They have names like "Twista Lime," "Beach Breezer" and "Mocha Taboo," and candy flavors to match.
But they are real tobacco cigarettes, and deadly, according to anti-smoking activists who yesterday called on the City Council to pass a law to ban candyflavored cigarettes.
"Candy-flavored cigarettes are a clear attempt by the tobacco industry to addict our youth to their toxic products," Louise Vetter, the chief executive officer of the American Lung Association of the City of New York, said at a press conference outside City Hall with a group of teens backing the proposed ban.
The City Hall event was one of many around the world marking World No Tobacco Day. Among the teens participating were members of ACTION (Activists Coming to Inform Our Neighborhoods), a project of The Point Community Development Corporation in Hunts Point, the Bronx.
"We know we are big tobacco's targets, but we do not want to be their victims," said ACTION member Robert Ingram, 18.
Councilman Joel Rivera (D-Bronx), the chairman of the Health Committee, announced he is drafting legislation to ban the candy-flavored cigarettes.
Under current city law, cigarettes can't be sold to youths under 18. But Rivera recently introduced another bill that would make 21 the legal age for buying tobacco products.
"We know that this is an approach by big tobacco to try to target our youths," Rivera said, referring to the candyflavored cigarettes. "To get them initiated and get them accustomed to inhaling cigarettes at an early age."
Similar campaigns to ban flavored cigarettes have been mounted elsewhere, but so far no city or state has banned them.
A bill passed last year by the Chicago City Council was later withdrawn because it also would have banned mentholflavored cigarettes, according to Dan Klotz of the NYC Coalition for a Smokefree City. That bill is being redrafted, he said.
Rivera said he was confident that a bill banning the flavored cigarettes that would withstand a legal challenge will be passed eventually by the New York City Council and approved by Mayor Bloomberg.
City blowing smoke on WTC health effects
Credibility lost after smoking ban claims
By Sidney Zion
Something stinks in our city, worse in its way than the toxins that emanated out of Ground Zero. It's the unwillingness by medical and scientific experts to admit that the suffering of firemen, cops and others who heroically cleaned up at Ground Zero can be definitively linked to their time spent at the site after 9/11.
Foremost here is Thomas Frieden, New York City's health commissioner, who last month said he would be "surprised" if the death of NYPD detective James Zadroga could be linked to the World Trade Center wreckage.
This, despite the fact that the autopsy of the 34-year-old policeman made a direct connection between his death and the WTC. Frieden dissed the autopsy. It wasn't definitive, he said. Autopsies don't prove the case.
Now this is the same Tom Frieden who, together with Mayor Bloomberg, banned smoking in New York on the grounds that secondhand smoke kills 1,000 people here every year.
Yet no autopsy ever backed that assertion, which as we all know, has changed the world, not just the city. Once New York fell to Frieden and Bloomberg, there went Ireland, Israel, England, next the world!
And this with no direct proof. The case against secondhand smoke is all smoke and mirrors.
Yesterday I called Frieden's office to ask how he could square his views on smoking with the assertion that it was doubtful Detective Zadroga's death was connected to his work at Ground Zero. His spokeswoman Sandra Mullin said, "There is no question about the deadly effects of secondhand smoke, but there is no definitive proof about the impact of what happened at the World Trade Center."
As a result of experts like Frieden failing to establish a connection between Ground Zero and health or death, the victims and their families suffer.
It's a sick joke. What really is going on, is a fear by the bureaucracy that a decision connecting Ground Zero with health consequences and/or death will result in big time money damages.
How else can you explain why, in one breath, docs, scientists, journalists and the rest refuse to question the "evidence" on secondhand smoke, and, in the next, all respectfully accept the complexities of proof beyond a reasonable doubt where heroes left their lungs and lives.
Drug OKd to help put butts out
By Jonathan Lemire
A new anti-smoking drug that helped one out of five smokers kick the habit will be on the market later this year.
Chantix, created by New York-based Pfizer Inc., was endorsed by the federal Food and Drug Administration yesterday.
"This is very welcome news, for it is aimed at all smokers, regardless of their level of dependence," said Lisa Daglian of the American Cancer Society, which says that tobacco causes one-third of all cancer deaths. "It seems to have a great success rate, so we're optimistic."
The prescription drug claims to regulate the body's level of dopamine - often known as its "pleasure chemical" - which cuts users' enjoyment of smoking and lessens the withdrawal symptoms.
That makes it different than the two existing smoking cessation drugs, which are either nicotine replacements - like the patch or gum - or antidepressants, like Zyban.
In a study run by Pfizer, Chantix helped 44% of users quit smoking, as opposed to 18% of the group that quit without the drug. One in five of those who quit were still cigarette-free a year later.
But it doesn't come without side effects - users who tried the drug experienced headaches, abnormal dreams and significant nausea.
"If nausea's involved, that might counteract the fear that people who quit smoking will gain weight," joked Dr. Norman Edelman, chief medical officer of the American Lung Association.
"Smoking still kills 440,000 people a year," Edelman continued. "We welcome any new weapon in that fight with open arms."
But not everyone was ready to embrace the new drug, the cost of which will not be determined until later this year.
"We've always contended that a lot of smoking bans and the anti-smoking push is funded by the pharmaceutical companies," said Audrey Silk, founder of Citizens Lobbying Against Smoker Harassment. "They're just trying to lean in on the tobacco industry's market."
Time to patch out the cigs
Quitters' healthy cheer as city offers stop packs
By Lisa L. Colangelo
Ben Gillig had promised his new bride he would stop smoking, but even his best efforts to kick the habit didn't work.
But when Gillig found out he was going to be a dad, he decided he needed to try one more time.
He signed up for the city's free nicotine patch program last year.
"It really has changed my life in a lot of ways," said Gillig, a 26-year-old patient representative at Long Island College Hospital, who has not smoked for almost a year. "I started smelling things that I hadn't smelled, tasting things that I hadn't tasted. I feel much healthier."
For the third time, the city is offering free nicotine patches to New York City residents who want to stop smoking. The first 35,000 eligible residents who call the city's 311 hotline will get a four-week supply of patches and other resources to help them kick the habit.
"Nicotine patches are effective, and they are safe," Health Commissioner Thomas Frieden said yesterday as he announced the latest giveaway at the city's 311 headquarters. "They just about double the likelihood that you will successfully quit."
John Eddie, who had smoked for 30 years, quit successfully six months ago.
"I came to a point in my life where I knew I had to do something," said Eddie, 52, who lives in Staten Island. "My whole health picture was somewhat deteriorating."
And 56-year-old Deanna Gross had smoked for more than 40 years before she finally quit with the help of the patches.
"It's never too late to quit," said Frieden. "People who quit smoking immediately experience benefits."
The latest patch giveaway, which will cost the city about $2.3 million, is part of Frieden and Mayor Bloomberg's aggressive anti-smoking push, which included the citywide smoking ban.
Frieden estimated about 1 million city residents are smokers. But according to a city survey, there are about 200,000 fewer smokers now than there were four years ago.
Supermart is smokin' mad
Sues L.I. Indians over sale of cigs
By Frank Lombardi
A city supermarket chain is suing two Long Island Indian reservations, saying their illegal cigarette sales are cutting into profits.
Lawyers for Gristedes Foods are expected to file the suit today in Brooklyn Federal Court, charging two Indian nations helped spawn "a thriving black market of discount cigarette sales."
The suit contends that Gristedes, which operates 45 grocery stores in the metropolitan area, has "lost in excess of $20 million in cigarette sales revenue and lost ancillary sales" from illegal competition.
The action seeks an injunction, punitive damages and the grocer's share of what it considers illegal profits.
Gristedes boss John Catsimatidis said he decided to file the suit because the state Taxation and Finance Department is not enforcing the law.
State and federal statutes allow cigarette retailers on Indian reservations to skip taxes for Indian customers, but duties must be collected from non-Indian customers, whether in person or online.
"I'm not taking the law in my own hands," Catsimatidis said. "But we're losing a lot of business, and so are a lot of small businesses."
The Unkechaug Poospatuck Tribe of Mastic and the Shinnecock Indian Nation in Southampton, both in Suffolk County, are named in the suit.
Critics have accused Gov. Pataki of dragging his feet on collecting cigarette taxes on Indian reservations, despite a legislative budget directive this year. His spokesmen contend the governor is trying to work out agreements to collect the taxes "in a way that makes sense."
A pack of cigarettes sold in the city now carries a $3 tax - $1.50 each for the city and state. Mayor Bloomberg has proposed a 50-cent hike.
Also named are Poospatuck Chief Harry Wallace, who operates the Poospatuck Smoke Shop and Trading Post, and several leaders of the Shinnecocks, including Lance Gumbs, the tribe's former board chairman.
Told of the impending suit, Wallace, who is also a lawyer, said that private individuals "have no authority to sue an Indian nation or its subsidiaries."
Gumbs called the suit "frivolous" and said it was "intended to deprive the tribes of their economic engine" that is used to pay for needed services on the reservation.
Gristedes lawyer William Wachtel countered that "the lion's share" of money made on reservation cigarette sales is not being used to improve tribal conditions.
"A lot of money is ending up in the Cayman Islands [banks]," he charged.
Pols fume as cig tax is ignored
By William Sherman
The Pataki administration is refusing to enforce a new law that effectively shuts down the lucrative sale of untaxed cigarettes by the state's Native American tribes - costing the city and state $500 million this year.
Pataki administration sources concede the governor's decision to defy the Legislature is motivated by politics.
The state is in delicate negotiations with the tribes, led by the Seneca nation, over its land claims and the proposed construction of casinos upstate.
Enforcing the new cigarette law could cripple those talks - and Pataki also wants to avoid a repeat of the violence that broke out nine years ago when untaxed cigarette sales were banned temporarily and Native Americans rioted for days, blocking the state thruway near Buffalo, sources said.
Pataki spokesman Kevin Quinn told the Daily News, "Our goal has always been to solve this matter through cooperation instead of confrontation."
But state Attorney General Eliot Spitzer, Assembly Speaker Sheldon Silver, Senate Majority Leader Joe Bruno and Assemblyman Pete Grannis are demanding Pataki enforce the law.
"The administration is being a scofflaw on carrying out the law that we're emphatically arguing should be enforced," said Grannis (D-Manhattan). "There are hundreds of millions of dollars at stake."
Native American tribes sold more than 475 million packs of untaxed smokes in New York last year. The tribes enjoy tax-free commerce because of their sovereign nation status.
Selling the tax-free tobacco has brought millions of dollars a year to the tribes, which hawk cigarettes over the Internet and at stores on reservation land.
Seneca nation President Barry Snyder has railed against the new law, arguing it breaks treaties and is an economic assault on the tribes' sovereignty.
If it's enforced, Snyder said, "hundreds of Seneca-owned businesses would be forced to close, putting 1,000 Senecas and non-Senecas out of work."
"Doing so would wreak havoc on both the nations and western New York economy," he added.
The sale of tax-free cigarettes has been contested in numerous court cases involving the tribes, rival retail stores, trade associations, the Legislature and the city for more than a decade.
Pataki has proposed changing the new law in his budget and wants to hold off enforcing it while the Legislature considers several amendments.
Pataki also wants to cut the Legislature out of any negotiations with the tribes over land claims, casino operations and cigarette taxes. That would please the tribal leaders, who prefer to deal one on one with the governor, sources said.
The new law, which went into effect March 1, requires wholesalers to collect taxes from tribes as well as other retailers before tobacco products are sold. The taxes are then turned over to the Department of Taxation and Finance.
The tribes would have to pass the new taxes along to their customers to avoid losing profits, essentially killing their tremendous pricing advantage over other retailers.
For example, Seneca tribe businesses are selling untaxed cartons of Marlboros over the Internet for $29.99 each, while the taxed retail store price per carton in the city is about $70.
More than 20 Internet sites and 500 smoke shops are run by tribes in the state. They include the Tuscarora, Tonawanda Seneca, Cayuga, Onondaga, Oneida, Akwesasne Mohawk and Ganiehkeh Mohawk nations, which all are located upstate. The Poospatuck and Shinnecock nations in Suffolk County also sell untaxed cigarettes.
Stamping out mail cigs
By Celeste Katz
Neither snow nor rain nor heat nor gloom of night stops the Postal Service from delivering cigarettes - but the law should, Sen. Chuck Schumer said yesterday.
Mail deliveries of cigarettes let kids get their hands on smokes and rob states of millions in taxes, Schumer and state Attorney General Eliot Spitzer said.
Schumer proposes a bill to make it illegal to mail cigarettes and light up violators with fines of at least $1,000 or jail.
It's already illegal to buy butts off the Internet in New York State. Major shipping companies FedEx, UPS and DHL have agreed not to handle cigarette shipments to U.S. buyers, and credit card companies have agreed to stop processing Internet cigarette orders.
Schumer said the bill "will close the last loophole in the robust Internet trade of illegally selling cigarettes to minors."
Spitzer said the Postal Service should be "ashamed of itself" for delivering cigarettes.
Postal Service spokesman Gerry McKiernan said that right now, "the policy is if you put a stamp on it and bring a package to a post office, we're required to deliver it. In the absence of a search warrant, we don't know what's in it."
(SEE NY Office of Attorney General Press Release)
Holy smoke! Puffers face 33M e-cig tax bill
By Frank Lombardi
A deal with an Internet cigarette peddler could make 12,500 city smokers cough up $33 million in unpaid sales tax, city officials said yesterday.
A Virginia-based company, eSmokes Inc., agreed to settle a city suit by giving up detailed information on untaxed cigarette sales it made to city residents between 2002 and 2003.
That includes names, shipping addresses, dates and quantities of cigarettes purchased.
City tax collectors plan to use that information to send dunning notices to the tax-cheating smokers. Puffers would have 30 days to pay the owed taxes - or face penalties of up to $200 a carton.
So far, the Finance Department's crackdown on Internet cigarette tax cheaters has collected nearly $1 million from thousands of city smokers.
Finance Commissioner Martha Stark urged tax-cheating smokers to turn themselves in by calling 311. They'll be billed for unpaid taxes, with no penalties, she said.
Mayor Bloomberg, who led the ban on public smoking, has proposed a 50-cent hike in the city's $1.50 per pack tax. But Senate GOP Leader Joe Bruno declared yesterday he wouldn't back the move.
Cig tax-hike plan burns merchants
By Frank Lombardi
Mayor Bloomberg's call for a 50-cent hike in the cigarette tax has local tobacco retailers smoking mad.
According to representatives of bodegas, convenience stores, newsstands and other small retailers, the tax hike would only drive more of their tobacco-addicted customers into the beckoning arms of untaxed sources, such as street peddlers, the Internet and Indian reservations.
"The more the mayor continues to increase the tax, the more the disparity between the legal sales and the nontax sales, and the more the black market will continue to cripple local stores," said Richard Lipsky, spokesman for the Neighborhood Retail Alliance, which represents scores of small retailers in the city.
City tax officials, however, hope that smokers will simply decide to quit. And for those tempted to patronize buttleggers, the city intends to intensify enforcement efforts.
"Generally speaking, I don't think people will look for ways to break the law," said Owen Stone, Finance Department spokesman. "They will stop smoking or pay the tax."
A Quinnipiac University poll last week reported that 71% of city voters favor the mayor's call for hiking the city's cigarette taxes to $2 a pack from $1.50.
The hike - which requires approval from the Legislature and Gov. Pataki - would generate $21.2 million in additional revenue for the new 2006-07 city budget, and an average of $38.7 million a year for the next three fiscal years.
Most of the funds would be earmarked for smoking prevention and cessation programs, the mayor said.
As he did in 2002 - when Bloomberg engineered the mammoth tax boost to $1.50 a pack from 8 cents - the smoke-hating mayor contends his new tax hike is aimed at keeping smokers, especially teenagers, from damaging their health and even slowly killing themselves.
State Sen. Jeffrey Klein (D-Bronx-Westchester) and City Councilman Oliver Koppell (D-Bronx) argued that city and state officials would be better off doing more to collect the unpaid tax revenues from Indian reservations than raising cigarette taxes again.
Koppell said Pataki gave up on efforts to collect the Indian taxes because of violent demonstrations in 1997.
"It's shocking to think that we're not enforcing the law because of a threat of violence," he said.
50¢ cig tax has smokers fuming at the mouth
By Celeste Katz
Antoinette Smith of Brooklyn likes to smoke.
But she hates paying $6.75 a pack for cigarettes - and she's burning up over Mayor Bloomberg's desire to tack on another 50 cents.
"One little pleasure, and he's going to fine us for it?" groaned Smith, 51, of East New York. "Come on!"
The mayor's quest to jack up the local tax to $2 from $1.50 - conceivably bringing a pack of smokes at higher-priced shops to $8 or more - was not sitting well with the cigarette set yesterday.
Bloomberg, who banned smoking in city bars and restaurants and wants to use the new tax revenue to fund anti-smoking programs, says it's a simple choice.
"Either [your] objective is to reduce smoking among our children, or it is to help those who sell cancer," he told reporters yesterday.
But smokers rights activist Audrey Silk says continually raising taxes just "turns law-abiding citizens into outlaws" by driving them to shop on the black market.
Not everyone puffing away yesterday thought a higher tax would be a sin. At a newsstand outside Penn Station hawking Marlboros for $6.90, receptionist Susan Overeem said she wouldn't oppose a 50-cent hike.
"I see cigarettes as a luxury. I understand a luxury tax," said Overeem, a Staten Islander who picked up the habit during her bartending days. "And I think kids shouldn't smoke."
The threat of a tax hike had smoker Paul Del Castillo, 41, a Queens scaffold rigger, envisioning money-saving cigarette runs to Long Island or New Jersey.
"I'll have to stretch out [a pack] three days - sell loose cigarettes for a dollar to make my money back," he said.
Mostly, Del Castillo said, he resented what he sees as Bloomberg's intrusion into a private matter.
"I've been thinking about quitting - but I'm not going to do it on his terms," he said.
Mayor burning to raise cig tax
By Michael Saul
ALBANY - New York City's tax on cigarettes - already the highest in the nation - should be upped another 50 cents per pack, with the revenue going to public health efforts to stop smoking, Mayor Bloomberg proposed yesterday.
The hike would raise the combined city and state tax on cigarettes to $3.50 per pack, which would bring the price of a pack of smokes in some parts of the city to a staggering $8.
The proposal needs approval by the City Council and the state Legislature.
"We're trying to save the lives of our children," Bloomberg said in Albany after testifying on the state budget.
City Hall aides confirmed the mayor plans to include the new cigarette tax in his preliminary budget proposal on Jan. 31.
In his first term as mayor, Bloomberg led the charge to impose a citywide ban on smoking in bars and restaurants.
Bloomberg said he opposes Gov. Pataki's proposal to reduce the city cigarette tax by $1 and raise the state tax by $1. Under Pataki's plan, the state proposed to reimburse the city for the $78 million loss.
Snuff out Astoria's hookah bars: foes
By Moira Herbst
Layali Beirut, an ornate Lebanese cafe in the Little Egypt section of Astoria, is packed nearly every night.
Patrons cluster around tables on terraces, drawing on Middle Eastern water pipes called hookahs while they play round after round of backgammon. As they puff on fruit-flavored tobacco, or shisha, dense clouds of smoke merge into a flavored haze that fills the area.
"The hookahs allow us to come together and unwind," Beirut-born Mahmoud Abraham, co-owner of the cafe, said. "It's an important part of our culture."
But while customers at Layali Beirut - and the nine other hookah bars on Steinway St. - are enjoying the centuries-old tradition, neighbors like Laurie Lunenberg, 46, are furious.
Contending that the smoke from the bars is putting her health at risk, Lunenberg is organizing a group of residents living above or near the cafes to protest that the state's smoking ban, the 2003 Clean Indoor Air Act, is not being enforced there.
"It's aggravating my allergies so terribly that it hurts to talk sometimes," said Lunenberg, who lives on 38th St. behind Layali Beirut and the adjacent Al Sukaria Egyptian cafe.
She has called on the local community board, the city and state Health Departments, the public advocate's office and local City Council members to urge enforcement of the ban, which would effectively put the cafes out of business.
Last fall, Lunenberg presented a petition signed by 30 neighbors asking that Queens Community Board 1 shut down the outdoor terraces where customers smoke. But board representatives told her it is legal to smoke outside, and their hands were tied unless the law is changed.
Franciska Knippel, 77, who has lived on 38th St. for 40 years with her asthmatic husband, Eugene, signed the petition.
"It's aggravating my husband's asthma so much we can't open the windows anymore," Knippel said.
The city Health Department said in a statement: "We enforce the Smoke-Free Air Act in hookah cafes. We inspect them upon complaint and issue violations as appropriate."
But many of the fines have been dismissed, as some hookah bar owners have argued at hearings that shisha is made primarily of fruit. "It's not like a cigarette," said Gamal Dewidar, who manages his brother's Elkhaiam cafe and Hookah Palace on Steinway St. "There is a little tobacco and honey mixed in, but it's not dangerous."
Health experts say, however, that hookah smoke is no less harmful than cigarette smoke.
Cafe owners contend that their establishments should be eligible for a cultural exemption from the law, which exempts tobacco bars only if they serve alcohol. In accordance with Muslim custom, Steinway St. hookah bars do not serve alcohol.
City Councilman Peter Vallone (D-Astoria) has been petitioning the Health
Department to grant the hookah bars an exemption. "No one should be punished
for not serving alcohol, much less when it's for religious reasons," he
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10 Now - December 19, 2006
Lawmakers raise minimum age on purchasing tobacco products
By Narmeen Choudhury
A public hearing kicked off the Onondaga County legislature's controversial vote on raising the minimum age on purchasing tobacco products from 18 to 19. Representatives from NYPIRG and the state's Association of Convenient Stores were there against the law. Both say it's important to continue the fight against smoking, but disagree the law would be effective.
NYPIRG Legislative Director Blair Horner said, "The experts know what works. This just isn't one of them. What we know works is if you run TV ads targeting young people, 12 to 17 year olds, telling them not to smoke. We know that educating them in school will work."
James Calvin of the New York Association of Convenience Stores said, "There are so many readily available unlicensed, untaxed, unregulated sources of tobacco here in Onondaga County -- Native American smokeshops, the Internet, black market entrepreneurs."
The debate has certainly been a mixed bag throughout New York State. Several counties have voted the legislation down, and Nassau and Suffolk counties are the only other counties before Tuesday to have adopted it.
Onondaga County Legislator Bob Warner said, "Just by the very nature of it, when you think about it and all those 18 year olds who walk into those stores and buying these cigarettes, it's gotta help some. And that's all we're asking for is that it helps some."
Local store owners have until April 1 of next year to make changes to signs indicating the age change as well as training their employees.
Press - December 13, 2006
Tribe considering making own cigarettes to boost revenues
By William Kates
NEDROW, N.Y. -- The Onondaga Indian Nation is considering opening a cigarette factory in a warehouse it is building on its territory south of Syracuse.
The cigarette factory is one of several possible ventures the Onondaga are discussing, Joseph Heath, the tribe's attorney, said Wednesday.
Other possibilities include an organic grocery store, a pharmacy or a lumber store, he said.
At this time, though, the cigarette factory is the front-runner.
"The tribe needs to maintain an income. If the opportunity is there with cigarettes, the tribe will reluctantly continue. It's not the ideal business the Onondagas want to be in, but it's something that has worked well," Heath said.
The tribe began building the warehouse last month and expects to complete it by late spring. It sits next to the tribe's smoke shop and million-dollar lacrosse arena.
The decision on whether to go ahead with a cigarette factory depends on whether the tribe can work out an agreement with the federal government, Heath said.
Cigarette manufacturers, including those operating on Indian territory, are required to obtain a federal permit from the U.S. Treasury Department, agency spokesman Art Resnick said. The Onondaga are still exploring legal issues involving the permit requirements, Heath said.
"We are seeking a government-to-government arrangement. But there are complications. That's why we are also looking at other possible uses," Heath said.
Earlier this year, the treasury department announced an agreement with the Native Trading Association to manufacture cigarettes on the St. Regis Mohawk Reservation. Native Trading agreed to forfeit $2 million and to pay taxes on all the cigarettes it makes.
Other privately owned cigarette factories are located on the Tuscarora and Seneca Nation territories in western New York.
Heath said the Onondaga are considering manufacturing their own cigarettes because it appears the state may try to enforce tax laws on Indian cigarettes.
Indian tribes and businesses in New York have argued that the state cannot force them to collect a state tax because they are sovereign governments. The state excise tax on cigarettes has been $15 per carton since April 2002.
In 1994, the U.S. Supreme Court ruled that New York could tax cigarette sales by Indian stores to non-Indian customers. Non-Indian businesses claim they are at a disadvantage because they must charge customers more to cover the excise tax.
State legislators passed a law effective March 1 that barred wholesalers from selling cigarettes to reservation retailers who sell them tax-free. But Gov. George Pataki has refused to enforce the law.
Heath said it would create an economic hardship if the Onondaga have to add the state tax to the cost of its cigarettes.
The Onondaga depend on its cigarette shop revenue to pay for the tribe's fire department, youth sports programs, a home rehabilitation program and assistance for senior citizens, Heath said.
Onondaga chiefs do not disclose how much money the smoke shop generates or how many cigarettes it sells. However, state tax records showed that wholesalers delivered about 1.1 million cartons to the Onondaga Nation in 2005.
of Atlantic City - November 26, 2006
Casinos prepare for possibility of smoking ban
By Pete McAleer
New Jersey's Casino Association will mount a legal challenge if Atlantic City Council adopts a smoking ban on gaming floors, but casino executives have begun to look at ways to cut their losses should the ban become a reality.
Pressure has mounted in recent weeks to end an exemption that allows smoking to continue on casino gaming floors even while it is banned at most other indoor public areas across the state.
The leading advocates for New Jersey's statewide smoking ban, Group Against Smoking Pollution (GASP), held a news conference Nov. 9 to announce they had tested the air quality at casinos and found high levels of pollution not only on the gaming floors but in surrounding areas where advocates say smoking is legally banned.
The group also charged that casinos had not effectively banned smoking in restaurants and other areas where smoking is legally off-limits.
Less than a week later, City Council voted unanimously to introduce an ordinance to prohibit smoking in all casino areas. The ordinance could be adopted as soon as Dec. 29. The Casino Association — which held a private conference call Wednesday afternoon to discuss the issue — plans to launch an immediate legal challenge on the grounds that the ordinance could not supersede state law.
The casino industry argues that banning smoking at gaming facilities would cause significant economic damage. In the October issue of Casino Connection, New Jersey Casino Association President Joe Corbo said a ban would cost the state 3,377 jobs and $93 million in tax revenues in the first two years.
Still, support for ending the exemption seems to be expanding, even among the lawmakers who helped create it. State Sen. Bill Gormley, R-Atlantic, has said the eventual ban of smoking on gaming floors appears inevitable. Freshman Assemblyman Jim Whelan, D-Atlantic — who was not in office when the smoking ban was enacted — has introduced legislation to end the exemption. Whelan, along with other opponents of the gaming-floor exemption, argues that any economic losses would be slight and temporary.
At least one casino company favors pursuing a regional agreement to end smoking at gaming areas in New Jersey and three neighboring states, Connecticut, Pennsylvania and New York. Smoking already is banned at slot machine facilities in Delaware. The idea would prevent smokers from taking their business elsewhere, but it comes with significant hurdles. Connecticut's casinos — Foxwood Resorts and Mohegan Sun — are owned by Indian tribes that could likely claim sovereign exemptions from such an agreement. Without the involvement of Connecticut casinos, a regional deal would make little sense.
Corbo said there had been no discussion by the association of a regional smoking ban agreement. He declined further comment.
The more popular strategy appears to be a gradual phase-out of smoking on gaming floors that would give the industry time to prepare for the ban. At a global gaming exposition held in Las Vegas earlier this month, casino executives from around the world talked about dealing with smoking bans by communicating with customers through advertisements and by setting up smoking balconies and attractive smoking areas.
Buffalo News - November 21, 2006
Seneca tobacco merchant agrees to comply with federal demands
By Dan Herbeck
A prominent Seneca Nation tobacco merchant who has tangled several times with the federal government has agreed to change his business practices and forfeit $1.25 million to the government.
Scott B. Maybee, one of the largest Seneca tobacco merchants in the region, signed a recent federal court agreement promising that his cigarette companies will closely adhere to federal laws during all future sales.
The agreement is believed to be the first of its kind between a Native American mail-order tobacco business and the federal government, federal officials said Thursday.
Maybee runs three Salamanca-based companies that employ about 200 people to do mail-order and Internet cigarette sales. His business was the subject of a lengthy investigation by the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives.
In court papers, U.S. Attorney Terrance P. Flynn agreed that the government will not criminally prosecute Maybee for any activities uncovered during the investigation.
Maybee, in turn, will forfeit $1.25 million to the government, in six payments spread out over the next two years.
"[As] long as Maybee is fully compliant with all federal laws, Maybee may continue to operate his interstate cigarette business," Flynn said.
According to his attorney, Margaret A. Murphy, Maybee agreed to:
Adopt a written age-verification procedure that ensures cigarettes are only sold to adults at least 21 years old.
Guarantee that all shipments of cigarettes not bearing government tax stamps will fully comply with federal regulations.
Limit individual consumer sales to 10 cartons per order and 25 cartons per month.
Maybee said his agreement was reached after a series of discussions involving him, Murphy and Assistant U.S. Attorney Richard D. Kaufman.
Maybee's is believed to be one of the largest among approximately 200 tobacco-related businesses run by Seneca Nation members. He also runs several nontobacco businesses. In recent years, his tobacco operations have had several legal run-ins with federal agents. Maybee has never been charged criminally, but in 2004, he had to forfeit 588,000 cigarettes that had been seized during an ATF investigation.
The 34-year-old businessman encouraged other Seneca tobacco sellers to adopt similar business practices to avoid problems with the federal government, but he said he will not do anything that would harm the Senecas' rights to operate as a sovereign Indian nation.
Maybee said he will continue to fight in court against what he considers to be unfair tax enforcement actions by New York State. The cigarette companies involved are called SmartSmoker, OrderSmokesDirect and BuyCheapCigarettes.com. Maybee's agreement with the government was approved by U.S. District Judge Richard J. Arcara.
Press - November 16, 2006
Odds against smoking in Atlantic City casinos
ATLANTIC CITY, N.J. (AP) - Casinos that helped push through an exemption to a new statewide smoking ban may have to start clearing the air anyway.
The City Council voted unanimously Wednesday to introduce a proposal to eliminate smoking in all public places, including gambling floors at the city's 13 casinos.
A final vote could take place late next month, and the measure could take effect as soon as January if approved and signed by the mayor.
City Councilman Bruce Ward, a health care lawyer and a co-sponsor of the proposal, said he ``became inspired by the cause'' while attending a recent anti-smoking rally.
``People were giving their testimony about their lives and how their lives were impacted. Legislation at the state level takes a long time,'' he said. ``Meanwhile, we have a health hazard that continues.''
At the time the state law was passed, lawmakers said they lacked the votes to get a smoking ban through the Legislature without exempting casinos - but they did add a provision allowing cities to craft tougher rules of their own. Cigar bars and simulcast racing sites also are exempt from the state law, which took effect in April.
Representatives of the Casino Association of New Jersey did not return calls seeking comment Thursday.
Press - November 16, 2006
Onondaga County considers raising smoking age
SYRACUSE, N.Y. A proposal to raise the smoking age from 18 to 19 is moving forward in an upstate county.
The Onondaga County Legislature's Health Committee unanimously voted yesterday to recommend raising the age to buy tobacco in the county to 19.
The intention is to keep 18-year-old high school students from buying smokes for younger students. The law could come up for a full legislature vote as soon as December 5th.
The New York Public Interest Research Group opposes the law.
NYPIRG has supported most other anti-tobacco legislation. But the student-directed group opposes raising the purchase age because it would curtail the rights of persons who otherwise are considered adults, without evidence that it would reduce teen smoking.
- November 10, 2006
Health groups file to appeal tobacco case
WASHINGTON - Anti-smoking and health groups said on Friday they had notified a federal judge that they would appeal a ruling that allowed cigarette makers to avoid major financial penalties in the government's racketeering case.
The groups, including the Tobacco-Free Kids Action Fund, American Cancer Society, American Heart Association and American Lung Association, filed notice on Thursday that they intend to appeal the August 17 ruling.
The sanctions imposed by the court fell short of the remedies recommended by the public health groups, which among other things would have forced the industry to fund a $4.8 billion-a-year, nationwide anti-smoking program.
The ruling by U.S. District Judge Gladys Kessler found tobacco companies engaged in a decades-long conspiracy to hide the dangers of smoking.
Kessler imposed some remedies, including ordering the companies to make "corrective" public statements about the health effects and the addictive nature of smoking, and banning them from describing cigarettes in ways that convey health claims such as "low tar" and "light."
Kessler said a previous ruling, by a federal appeals court, barred her from imposing stricter actions sought by the health groups and the U.S. Justice Department.
The department, which asked the court to fund a less-expensive quit-smoking program, notified the court last month that it planned to appeal the ruling.
The cigarette makers are appealing the ruling as well and last month the U.S. Court of Appeals for the District of Columbia agreed to put Kessler's remedies on hold while the companies' appeal is pending.
Targeted in the 1999 lawsuit were Altria Group Inc. and its Philip Morris USA unit; Loews Corp.'s Lorillard Tobacco unit, which has a tracking stock, Carolina Group; Vector Group Ltd.'s Liggett Group; Reynolds American Inc.'s R.J. Reynolds Tobacco unit and British American Tobacco Plc unit British American Tobacco Investments Ltd.
Kessler exempted Liggett from the remedies because she found it withdrew from the conspiracy in the mid 1990s.
of Atlantic City - November 6, 2006
Smoking a chore for cold-weather bar patrons
By Courtney McCann
The door to Skelly's Hi-Point Pub in Absecon creaked open as Greg Herrman
stepped out into the parking lot for a cigarette.
He stood outside in the November twilight puffing away, hands stuck as deep into his pants pockets as they could go and shoulders hunched against the chill that cut right through his thin long-sleeved button-down shirt.
“I'm definitely not going to sit down,” the Galloway Township resident said, gesturing to the benches next to the door. “The cold will go right through my clothes.”
The New Jersey Smoke Free Air Act, which banned indoor smoking beginning in April, didn't seem so bad in July. Bars and restaurants set up patios with tables and chairs or put awnings over their decks. Patrons were able to relax outside and enjoy the warm sunshine along with their cigarettes. But now the sun is setting earlier, and daytime temperatures are struggling to rise out of the 50s. The formerly comfortable patios are exposed to the wind and the cold, leaving smokers shivering and stewing over the law that requires them to be there.
Herrman estimates he smokes about four or five cigarettes during a night out at the bar. But he tries to keep his cravings at bay because he knows it means leaving the warm comfort of the bar stool for a chilly bench outside.
“I enjoy tobacco with my drink,” Herrman said. “I shouldn't have to
stand outside in the cold to do that.”
Patrons at L.A.'s restaurant and nightclub in Manahawkin wore jackets and fleece pullovers as they stood on the deck smoking cigarettes in 40-degree weather one recent evening.
Trevor McCarthy, 35, of Manahawkin said that, in the summertime, standing out on the deck of L.A.'s and socializing was a pleasure. But not anymore.
“Two weeks ago it was pouring rain and freezing,” McCarthy said. “I had about half a cigarette and went back in. It was ridiculous.”
Bar and restaurant owners tried to accommodate smokers when the ban first went into effect.
Cookie Till, owner of Steve & Cookie's By the Bay in Margate, set up two outdoor patio areas with a few benches and planters. BoJo's Ale House in Millville has a canopy stretched over tables, chairs and benches. But none of the owners are sure what to do to keep their smokers warm.
“Our little stone patio has walls and it's underneath a Cypress tree, so it's kind of protected,” Till said. “If (the cold) becomes a problem, there are always those outdoor heater things.”
That's what Lynn Bowman, owner of BoJo's, had in mind. But she's not sure what customers with a few beers in them would do to a standing heat lamp or a fire pit.
“We're not sure how safe that is,” Bowman said. “When people are drinking they might knock things over. We're still trying to mull that over.”
Charles Ross Jr., owner of JR's Tavern in Somers Point, thought he had the problem beat. Ross purchased JR's — formerly Sullivan's — in January and is just now finishing up renovations. With the smoking ban in mind, Ross built a separate smoking room at the front of the building and furnished it with tables, stools, a bar and a plasma TV. The room is protected from the elements by Eisenglass — a clear vinyl material — save for a bay-window-sized hole at one end.
Last week, Ross learned that the room, which has been open to the public for several months, must have two openings to allow for cross-ventilation, according to the ban. The result, a door-sized floor-to-ceiling opening at one end and the existing window-sized opening at the other, leaves smokers at JR's prey to the chilly breeze whipping up Route 9.
“I see people in here hunched over and shivering,” Ross said. “They won't be sitting out here for long.”
And it's only November. The months of 20-degree temperatures, freezing sleet and snow are still ahead. Business owners who have had a successful summer despite the ban are having renewed fears that they will lose business. They say smokers stop in for one drink and leave, or forgo the bar altogether and drink at home instead.
“What are we supposed to do when it's really freezing out?” Bowman asked. “(Customers) now are buying a six pack and going home to drink and have a cigarette where it's warm.”
Some owners say the cold could give smokers an incentive to put down the butt and slap on the patch. The smokers say that's not likely.
“I tried to quit smoking and I lasted for about a week after the ban,” McCarthy said. “When it starts getting colder we're going wind up smoking in the bathrooms.”
Herrman says when winter arrives, he'll need a lot more than just a long-sleeve shirt when he braves the elements for a cigarette.
“In the winter,” Herrman said. “I'm going to start bringing my own rock salt.”
3 - November 2, 2006
Atlantic City Casino Workers Tired Of Smoke
By Cydney Long
ATLANTIC CITY Gaming supervisor Vincent Rennich and dealer Kim Hesse blame second hand smoke on their poor health.
"The smoke is just overwhelming some days I go outside I don't want to go back in," said Kim Hesse, Caesars Dealer.
"You can see it and taste it, it permeates your body," said Vincent Rennich, Tropicana Gaming Supervisor.
Both have more than 25 years on the casino floor.
Hesse will find out Monday if she has Emphysema, and doctors told Rennich 2 years ago, he could die of lung cancer.
"I can't tell you how hard that is, that you're going to die," said Rennich.
"As of April 15 the rest of New Jersey was able to breathe clean fresh air. We are not," said Hesse.
And that is why Atlantic City Councilmen Gene Robinson and Bruce Ward will introduce an ordinance to ban smoking all together on casino floors: New Jersey's Clean Indoor Air Act took effect April 15th, but the casino floors are exempt & still allow smoking.
[NYC C.L.A.S.H. Note: Emotional B.S. Alert!! Mr. Hesse has not been diagnosed with anything but the doctor tells him he COULD die (as could we all... of something) and now Mr. Hesse turns it into he IS going to die. Yeah, of something....eventually... Like the rest of us -- that's hard for all of us to take.]
Epoch Times - October 22, 2006
American Cancer Society Seeks Ban on Flavored Cigarettes
By Evan Mantyk
With names like "Twista Lime," "Midnight Berry," and "Warm Winter Toffee," the local American Cancer Society, backed by New York City Council members, is seeking a ban on candy-flavored cigarettes that they say target kids.
"This is an insidious product that blatantly targets kids," said Louise Veeter of the NYC chapter of the American Lung Association. "We owe it to the youth of New York City to protect them from deadly tobacco addiction, and removing these products from store shelves is the most effective way to do that."
The City Council held a hearing on the ban last Thursday.
Researchers at the Roswell Park Cancer Institute in Buffalo, New York, recently released several surveys showing that 20 percent of smokers aged 17-19 smoked flavored cigarettes in the past 30 days, while only 6 percent of smokers over the age of 25 had.
"It's clear who buys these cigarettes: kids and first-timers," said City Council Health Committee chair Joel Rivera, who is sponsoring Intro 433, the bill behind the ban.
Chief medical officer of the cancer society, Donald Gemson, MD, said, "Make no mistake, these cigarettes are like training wheels for full-flavored cigarettes. Once you are hooked on nicotine, you're hooked—it doesn't matter if it's Midnight Berry or Marlboro."
The bill, which cigarette companies will likely see as an infringement on their freedoms, bans a wide range of cigarettes with "tastes and aromas relating to any fruit, chocolate, vanilla, honey, candy, mint, cocoa, dessert, alcoholic beverage."
Mayor Michael R. Bloomberg, an anti-smoking advocate, has not come out in favor of the ban. In the past, Bloomberg has raised cigarette taxes and banned smoking from restaurants and bars. Bloomberg, a billionaire, also donated $125 million of his own money to help fight smoking.
Bloomberg remains skeptical about the effectiveness of banning candy-flavored cigarettes, concerned that it might have the opposite effect and make smoking such cigarettes more fashionable.
Sun - October 20, 2006
City Councilmember James Gennaro suggested yesterday that testimony from the Bloomberg administration in respect of the legal age for tobacco purchases might as well have been written by the city's finance department. Mr. Gennaro certainly seems to have a point. He is one of the cosponsors of a bill in the Council to raise the minimum age an individual must attain before buying cigarettes. Mr. Gennaro's bill would raise the age to 19 from 18, while a competing bill would raise the age to 21.
The mayor opposes both these provisions, and we agree with him, or rather, he agrees with us that more regulation isn't the answer to whatever public policy problem smoking poses. But, not to look a gift horse in the mouth, the question is, why? Mr. Bloomberg is a Johnny-come-lately to our more laissez-faire view of smoking, and it's hard to square his opposition to these latest legislative efforts with his earlier banning smoking in bars and jacking up the cigarette excise collected by the city, not to mention his pursuit of those who tried to provide some tax competition by buying untaxed cigarettes on the Internet.
Unless, that is, the testimony of the city health department's assistant commissioner for tobacco control, Sarah Perl, really was drafted by the city's finance department. Cigarette taxes, which currently add $3 in state and city excise plus sales tax to the cost of a pack, are big business. The city in August ratcheted efforts to extract $6.95 million in unpaid taxes from just 16,000 New Yorkers who had bought smokes from just one Internet site. Could it possibly be the revenue protection is the mayor's motive in opposing a raising of the age at which one can buy a cigarette — i.e., that he's addicted to tobacco revenues?
No other explanation makes sense. Ms. Perl argued, for example, that higher legal age requirements haven't reduced teen smoking in other jurisdictions that have tried the tack. But then why bother to enforce any minimum smoking age if clearly people who fall below the minimum will find ways to get cigarettes anyway? Even more bizarrely, Ms. Perl seemed to argue that another problem with the proposals would be that after they were enacted, some people who had previously been able to purchase cigarettes legally would be saddled with addictions they would no longer be able to satisfy. By this logic, one might as well pack it in with all anti-drug measures.
The real reason to oppose the City Council legislation is that there is no reason to restrict the sale of cigarettes to legal adults, who should be free to make the trade-off between perfect health and enjoyment in smoking. If politicians like Mr. Bloomberg believed as much as they claim to in the dangers of cigarettes, they would ban them outright.Instead, the political class tries to profit from them. Mr. Bloomberg's wrongheaded arguments on the right side of this particular issue serve only to point up just how muddled — or cynical — his other tobacco policies have been.
Sun - October 20, 2006
New Restrictions on Teenage Smoking Are Opposed by Mayor Bloomberg
By Matthew Chayes
Mayor Bloomberg, who won a reputation as an anti-tobacco activist in his first term by raising cigarette taxes and banning smoking in restaurants and bars, is now vowing to veto two anti-teen-smoking proposals that are before the City Council.
City Council members yesterday expressed surprise at the mayor's position. "I'm speechless. I am speechless," said Council Member James Gennaro, a Queens Democrat who is the sponsor of a bill to increase the minimum legal age to buy cigarettes in the city to 19 from 18. Mr. Gennaro pronounced himself "flabbergasted."
A second proposal, sponsored by the Democratic leader, Joel Rivera, would go further, banning the sale of cigarettes to anyone younger than 21.
A third proposal, which the mayor did not threaten to veto but which his administration criticized, would ban the sale of flavored tobacco products, such as Kool's "Mintrigue" and hazelnut-flavored pipe tobacco.
Mr. Bloomberg and his health advisers say similar restrictions on cigarette sales to teenagers in places like Nassau and Suffolk counties haven't proved effective. And the advisers expressed concern about the effects of the measures on 18-, 19-, and 20-year-olds who are already addicted to tobacco and now would not be able to get their nicotine fix legally.
An assistant health commissioner for tobacco control, Sarah Perl, said increasing the minimum age would increase cigarettes' "forbidden fruit" appeal, which she said tobacco-industry documents suggest could make smoking more alluring to young people.
"Sending the message that ‘smoking is an adult choice' may paradoxically play into the hands of the tobacco industry and attract more children to tobacco," Ms. Perl said.
Ms. Perl said 11% of city public high school students smoke cigarettes, less than half the national average of 23%. She said the most effective way to combat smoking is by changing the perception that smoking is socially acceptable.
Mayor Bloomberg, who said at an afternoon news conference that he would veto the two age bills, said he and the city health commissioner aren't convinced that the council's latest antismoking initiatives would work.
"The best ways to reduce smoking among young people is to raise cigarette taxes because cigarette taxes have been shown to directly impact the younger people's ability to buy cigarettes," the mayor said.
The city forecasts that tobacco tax revenue for the fiscal year 2006 will be $121 million, a spokesman for the mayor, Matthew Kelly, said last night. State and local excise taxes are $3 a pack, and the mayor has proposed an additional 50 cent a pack increase. In addition, cigarettes are subject to the sales tax.
The opposition of the mayor — who has donated at least $125 million of his personal fortune to global anti-smoking causes — surprised many on the panel yesterday, who questioned whether other factions in the administration were behind the opposition to the bills.
"I find it hard to believe that this testimony actually comes from you because I know what an ardent advocate and fighter you are against the use of tobacco, particularly among our young kids," Council Member John Liu of Queens said to Ms. Perl.
Mr. Gennaro suggested that the Finance Department might have influenced the decision.
Physicians from tobacco-control groups, including the American Cancer Society of New York and New Jersey and the American Lung Association of the City of New York, testified in favor of the bans.
The only council member during the bulk of the hearing who questioned the wisdom of the bans was Simcha Felder of Brooklyn.
"It's not popular to say anything against a bill that would be prohibiting smoking," Mr. Felder said, adding, "Take a census, certainly from the 18-, 19-, 20-, 21-year olds, and they'll say to you, ‘if we can go out to war and potentially be killed we should have the right to buy a pack of cigarettes.'"
Max Neuman, a teenage smoker waiting for friends on Chambers Street where he attends Stuyvesant High School, said that he and his classmates who smoke would always find a way to get cigarettes no matter what officials try.
"People are going to smoke. People have smoked," Mr. Neuman said as a lighter dangled from his belt loop. "There's no law they're going to make that's going to stop them."
But the City Council members who support the bills argued that with more than 400,000 Americans dying of tobacco-related disease every year, the need to curb underage use is so great that it's worth trying anything that could make a difference.
"Most things are done by theorizing, not done with hard core facts," Council Member Rivera said yesterday, "because if we wait for facts for everything we will never have a law enacted in the City of New York ever."
Aficionado - October 5, 2006
Local Law Shuts Long Island Cigar Bars
By David Savona
New York's state smoking ban has a loophole for cigar bars. But cigar smokers in Long Island's Suffolk County have recently discovered that a local law passed more than three years ago now makes it illegal to smoke even in a cigar bar.
"It's quite disturbing. The people are very, very angry," said Arlene Furer, owner of The Cigar Bar in Sag Harbor, who recently was fined $1,000 for breaking the law. "I now have no-smoking signs all around. It's ridiculous."
In January 2003, the Suffolk County legislature voted to toughen its ban on smoking. Responding to pressure from county bar owners, the lawmakers delayed the start of the ban until 2006. In March 2003, New York State legislators passed a statewide smoking ban that went into effect that July. The tougher state law superceded the local ordinance, banning smoking throughout Suffolk County as well as all of New York.
The state law allowed for smoking in cigar bars, such as Manhattan's Club Macanudo. There is no such exemption in Suffolk County's smoking ban. When that ban went into effect this January, smoking became illegal in The Cigar Bar, as well as in the other cigar bars in Suffolk County.
"They were fine until the implementation of the local law," said Robert Morcerf, senior public health inspector for Suffolk County. "The local [more restrictive] law takes precedence. Now that the new local law is in effect, there's no exemption."
Sun - September 18, 2006
City Accused of Using ‘Scare Tactics' To Get Back Unpaid Cigarette Taxes
By Russell Berman
The chairman of the City Council's Finance Committee says the Bloomberg administration is using "scare tactics" to recover millions of dollars in unpaid taxes from residents who bought discount cigarettes on the Internet.
Council Member David Weprin of Queens criticized what he called a "threatening" letter that the Department of Finance sent to thousands of New Yorkers last month. The city obtained purchase information and the addresses of the city residents as part of a legal settlement with an online company, esmokes.com, which sold untaxed cigarettes.
In many cases, residents had bought dozens of cartons of cigarettes and owed more than $1,000 in back taxes. The letter stated that they had 30 days to pay the taxes or risk facing hundreds of dollars in penalties, litigation, and liens against their wages and bank accounts.
"Such actions would damage your credit, making it difficult to buy a home or obtain a loan," the letter, signed by an assistant commissioner for tax enforcement, Carlton Butler, warned."We do not want to take such drastic steps, which is why I strongly urge you to pay the amount listed above — without interest or penalties — within 30 days."
Mr. Weprin said the city should demand more money from the Internet retailers, not go after "innocent victims" of their deceptive sales pitches, which included no disclaimer that consumers were liable for state and city taxes on the cigarettes they bought. "It's great that the city is collecting revenue," Mr. Weprin said at City Hall yesterday. "They shouldn't be doing it with scare tactics."
Recipients of the letter who call the city's Finance Department can work out a payment plan over several years, but that is not stipulated in the letter,
"We did not make that clear in the letter. To be honest, perhaps we should have," a spokesman for the Finance Department, Sam Miller, said.
Mr. Miller said about 12,000 bills would go out seeking a total of nearly $4.5 million in taxes.The city is also trying to collect taxes from tens of thousands of other residents as a result of settlements with other online cigarette retailers. It has already collected more than $1 million.
-September 18, 2006
Pols: Anti-smoking move goes too far
By Chuck Bennett
New York hasn't been a smoker-friendly town for years, but even politicians are now saying City Hall is getting too tough on them.
About 16,000 New Yorkers received letters last month demanding they pay the back taxes they owe on cartons of cigarettes ordered online. Some owe bills in the thousands from purchases made three years ago.
If the smokers don't cough up in 30 days, the city's Finance Department threatens to garnish their wages, take the money directly from their bank accounts and ruin their credit.
"It is a bullying letter, no question," said Councilman David Weprin (D-Hollis), chairman of the finance committee. "I'm not standing up for smokers, I don't advocate smoking, what I am standing up for are the citizens getting threatening letters from the government with these scare tactics."
He said most customers were duped by an Internet retailers who claimed they won't ever have to pay taxes on the online smokes. But city and state law require New Yorkers to pay taxes on all online tobacco purchases.
The 30 retailers sued by the city this year provided the Finance Department with a list of all its customers. The companies themselves typically got away with a $5,000 fine or went of business to avoid the penalties completely.
Weprin said he is in talks with the Finance Department to send out new letters apologizing for the tone of last letter and informing people they can work out a payment plan for the back taxes. He even suggested that some people, such as senior citizens, should only pay a portion of the taxes.
"Even the IRS allows an opportunity to make an offer or compromise to settle a claim," Weprin said.
Sun - September 15, 2006
Smoker Numbers Rise, but Mayor Lauds Other City Statistics
By Russell Berman
The proportion of adult New Yorkers who smoke rose slightly last year, halting a five-year decline since Mayor Bloomberg took office and made stamping out cigarette use a top priority.
The percentage of smokers was 18.9% in 2005, an uptick of half a point from the previous year, according to data in the annual mayor's management report released yesterday.
When Mr. Bloomberg arrived at City Hall in 2002, the percentage had hovered above 21.5% for a decade. Taking aim at smokers, the mayor fought for steep increases in cigarette taxes and a ban on smoking in bars and restaurants, and he launched an aggressive anti-smoking campaign featuring print and television ads.
The city's Department of Health and Mental Hygiene said the increase was not significant and blamed persistent advertising from the tobacco industry.
Chronicle - September 14, 2006
Up In Smoke: City Wants Cigarette Money
By Liz Rhoades
Numerous city residents, including many from Queens, are being asked by the city to ante up thousands of dollars in cigarette taxes—or face the threat of garnishment of wages and liens on property.
Letters to 16,000 city residents went out in August to people who previously bought cigarettes over the Internet, where no payment of city or state taxes were required.
Although the sales were made in 2002 and 2003, there was no prior warning or notification to the online cigarette purchasers. Councilman David Weprin (D Hollis), chairman of the Finance Committee, said he is outraged by the city’s heavy handed action and plans to do something about it.
He was accompanied on Tuesday in his district office by a constituent, Joseph Maletzky of Bayside, who was charged $1,155 for purchasing 77 cartons of untaxed cigarettes in one year. “These are scare tactics,” Weprin said. “I am in favor of collecting taxes, but not on the backs of senior citizens and others who didn’t know they were doing anything wrong.”
Maletzky, 53, is disabled and unable to work. He counts on his disability check every month. “I’d be in big trouble if they (checks) are garnished,” he said. “The cigarette Web site never mentioned city or state taxes.”
Weprin will hold a news conference on the steps of City Hall Sunday at 11 a.m. where he will call for the Department of Finance to make several changes. He will first ask for a 30 day moratorium by the agency on collecting the back taxes. During that time, the councilman will meet with officials to come up with an equitable resolution.
He also believes each case should be handled individually. “Someone who buys 77 cartons a year is obviously not selling them in a store and should not be punished,” Weprin said. “The cigarette buyers were acting in good faith and if it’s for personal use, they shouldn’t have to pay.”
In other cases, he believes people should pay a reduced amount or work out a payment schedule. The city is demanding the tax money be paid within 30 days. “It’s absurd to have to pay up so quickly,” Weprin added.
He also wants to give the Department of Finance time to alert the public about current and future cigarette sales that are subject to taxes. Online cigarette sales are no longer legal in New York state. “People should be able to go down on an interview to discuss their cases and not to have to pay interest or penalties,” Weprin said.
If interest and penalties were applied to Maletzky, it could double his payment—something that he doesn’t want to contemplate. “My wife and I just can’t afford it,” he added.
The city is hoping to take in $6.95 million in unpaid cigarette taxes. Penalties for non payment will be assessed at up to $200 per carton. The city’s tax is $1.50 per pack of cigarettes.
Owen Stone, a Department of Finance spokesman, said his agency is standing behind its policy. “The letter people got is the warning. If they want to work out a payment plan, they can do so,” he added.
But Weprin said his office has gotten dozens of calls from residents who had no idea they were breaking the law and now are being penalized without any warning. Many, such as senior citizens, are on fixed incomes and bought cigarettes over the Internet to save money.
The city got the names of online purchases from the companies after filing a lawsuit against 30 such firms. While the case was pending, 15 of the companies settled with the city, paying fines and giving up lists of their New York City customers. Many of the companies then went out of business. Although the city eventually lost the case on a technicality, it is appealing.
For Maletzky, who now has respiratory problems in addition to other health concerns, he is still purchasing online to save money. He buys through Indian reservations, which are exempt from collecting taxes. “I know I have to quit smoking,” Maletzky added.
Jill Perrone, of Rego Park, also got a letter from the city saying she owed $1,230 for purchasing 82 cartons of cigarettes. “I was shocked at the letter and scared to death not to pay,” she said.
Perrone added that she purchased them for personal use. “It’s okay to pay taxes if you bought them in the city, but outside, you shouldn’t owe,” she said.
[NYC C.L.A.S.H. Note: The claims over legalities made by Mr. Maletzky and Ms. Perrone are incorrect. This is a case to be won but by using rightful arguments, not claims over law that is in fact unfavorable to them]
Life News - August 30, 2006
County To Beef Up Smoking Prohibitions?
By Chris Mascaro
Suffolk County law states that smoking is prohibited within a 50-foot radius of street entrances for county facilities. However, smokers have found a loophole in the law that allows them to light up at plaza-level entrances, which are raised above street level and are generally for employees only, such as the one at the H. Lee Dennison Building on Veterans Highway in Hauppauge. This evasion of the rules has led many workers to complain about the constant problem of secondhand smoke.
To combat this, Suffolk County Legislature’s Presiding Officer William Lindsay (D-Holbrook) brought forth an introductory resolution on August 8 that will strengthen smoking prohibitions around county buildings.
“Not only have there been complaints,” Lindsay said, “it’s a health hazard to get into a building [with smoke all around the entrance]. You almost have to go through a gauntlet of smoke to get into county buildings.”
The proposal would amend the previous law by substituting two words in Section 437-3 of the Suffolk County Code. Now, instead of saying smoking is prohibited in the 50-foot radius around street entrances to county buildings, it says that it is prohibited within 50 feet of all entrances.
“[The proposal] is a clarification for spots where there may not have been a sign posted,” Lindsay said.
Lindsay, who is an ex-smoker, added that he hopes the proposal will be approved by the Legislature on September 5 when it is voted on. However, even if the proposal is supported by the Legislature, it may have trouble getting past the veto stamp of County Executive Steve Levy, who is skeptical of the measure.
“While I agree with prohibiting smoking in public areas, there still has to be a place where smokers can go,” Levy said. “I don’t want to treat a smoker as a criminal.”
Levy went on to say that he believes there will be an added burden on those who wish to smoke when there is inclement weather, while also noting that productivity of workers who smoke will go down if they are forced go to the their cars to have a cigarette. “I come in and out of the Dennison Building everyday and there are smokers there, but so what? I never felt that it was an affront to my health.”
While Lindsay and Levy have strong feelings on both sides of this particular issue, some members of the county Legislature would like to hear more about the proposal before making any judgments about it. Included in that group is Legislator Elie Mystal (D-Amityville), who is the chairman of the Health and Human Services Committee and is credited with creating a local law that prohibits the sale of tobacco products, including rolling paper or pipes, to anyone under the age of 19.
“You have to balance health against people’s rights,” Mystal said. “At what point do we cross the line and infringe on what people want to do? I’m all for limiting secondhand smoke and getting people to quit [smoking], but at what point do we say, ‘you are infringing upon the rights of people to engage in something that is a legal activity?’”
Store News - August 20, 2006
NYACS Shook-Up after Tobacco Taxation Veto
ALBANY, N.Y. -- Supporters -- including the New York Association of Convenience Stores (NYACS) -- were disappointed in Governor George Pataki's veto of a bill that prohibited manufacturers from providing tobacco to distributors that are known for providing unstamped cigarettes to Native American tribes.
"We're dismayed, but given Governor Pataki's abysmal record on this issue, we're not surprised," said James Calvin, president of NYACS. "The reality, however, is that anything Mr. Pataki does or says on the tax fairness issue is no longer relevant."
The fight is not over, however. The state legislature could override the veto with a two-thirds majority vote in both houses. When the legislature returns in September, NYACS plans to lobby for a vote at that time.
"The Legislature, the Attorney General, and the community of law-abiding manufacturers, distributors and retailers are determined to remedy this problem without him," Calvin added.
Another setback comes in the form of a temporary restraining order in a New York Supreme Court case involving Day Wholesale, a distributor that is charged with supplying untaxed cigarettes to Native American tribes.
The restraining order will be in effect until Sept. 25, when defendants, including Day Wholesale, the Attorney General's Office and the State of New York, will discuss the case's merits to Judge Sconiers. The restraining order bans the state from enforcing the law against supplying retailers with untaxed cigarettes, as well as banning the Attorney General from claiming that the sales of untaxed products violates the law, which went into effect in March.
But NYACS president James Calvin remains optimistic, and stated in a release, "The veto can be overridden by the Legislature, and the restraining order can be lifted by the judge after hearing argument. The tax collection law is still in effect, even though the Governor is shirking his responsibility to enforce it."
In related news, there has been no decision from State Supreme Court Justice E. Michael Kavanaugh in a lawsuit filed by NYACS that seeks an order to implement the new tax collection law. The suit was filed against Gov. Pataki, state Tax Commissioner Andrew Eristoff, Day Wholesale and other cigarette distributors that allegedly supply Native American stores with untaxed cigarettes.
Press - August 18, 2006
Philip Morris to appeal tobacco ruling
WASHINGTON (AP) - Philip Morris is appealing a federal judge's ruling that the nation's top cigarette makers conspired to mislead the public about the dangers of smoking.
A lawyer for the parent company of Philip Morris USA says it believes the judge's decision and order "are not supported by the law." Altria Group official William Ohlemeyer also says the company doesn't think the judge's ruling is supported by evidence that was presented at the trial.
In yesterday's ruling, Washington federal judge Gladys Kessler sided with the government in its racketeering case against the industry.
She rejected the government's proposal to impose billions of dollars of fines on the industry. However, all of the tobacco companies involved, except the Liggett Group, have been ordered to pay the government's cost for pursuing the case.
The Justice Department estimates the cost is more than $140 million.
- August 17, 2006
Tobacco firms escape damage
By Peter Kaplan
WASHINGTON - Cigarette makers escaped major financial penalties on Thursday, even though a federal judge found them liable for violating racketeering laws in a decades-long conspiracy to hide the dangers of smoking.
U.S. District Judge Gladys Kessler ruled that the group of tobacco companies had broken the law, but could not be forced to fund a multibillion-dollar quit-smoking campaign, as the government had sought.
"Cigarette smoking causes disease, suffering, and death. Despite internal recognition of this fact, defendants have publicly denied, distorted, and minimized the hazards of smoking for decades," she said in the 1,653-page opinion.
Kessler said the companies suppressed research, destroyed documents and manipulated nicotine levels to perpetuate addiction, but an appeals court ruling prevented her from slapping the companies with costly remedies.
She did impose some remedies, including ordering the companies to make "corrective" public statements about the health effects and addictiveness of smoking, and banning them from describing cigarettes in ways that convey health claims such as "low tar" and "light."
Targeted in the 1999 lawsuit were Altria Group Inc. (NYSE:MO - News) and its Philip Morris USA unit; Loews Corp.'s (NYSE:LTR - News) Lorillard Tobacco unit, which has a tracking stock, Carolina Group (NYSE:CG - News); Vector Group Ltd.'s (NYSE:VGR - News) Liggett Group; Reynolds American Inc.'s (NYSE:RAI - News) R.J. Reynolds Tobacco unit and British American Tobacco Plc (London:BATS.L - News) unit British American Tobacco Investments Ltd.
In a first response, Philip Morris USA and Altria said they will seek a review of the ruling. They had not yet decided whether to first seek further review in the trial court or appeal directly to the U.S. Circuit Court of Appeals for the District of Columbia.
"...much of today's decision and order are not supported by the law or the evidence presented at trial, and appear to be constitutionally impermissible or infringe on Congress' sole right to provide for the regulation of tobacco products," William Ohlemeyer, Altria's vice president and associate general counsel, said in a statement.
U.S. District Judge Gladys Kessler ruled that the group of tobacco companies had broken the law, but could not be forced to fund a multibillion-dollar quit-smoking campaign, as the government had sought.
Ohlemeyer said the companies are studying the lengthy decision and will d As public health groups expressed disappointment in the outcome, tobacco stocks rose. Altria gained over 3 percent in extended trading, Reynolds rose over 2 percent, Carolina Group was up over 1 percent.
"Although they lost, they won. It's a victory for the tobacco companies," said Tim Ghriskey, chief investment officer at Solaris Asset Management.
A spokesman for Reynolds Tobacco said the company was disappointed that Kessler ruled in favor of the government but "certainly we're pleased that the court did not award unjustified and extraordinary expensive monetary penalties..."
The ruling was also seen as the last major hurdle to be cleared before Altria decides when it will spin off its Kraft Foods Inc. (NYSE:KFT - News) business.
WEB SITES, ADS
Kessler ordered each company to post on its Web site all documents it submitted to prosecutors in the case and transcripts of letters and depositions of former employees about the health impacts of cigarette smoking or research. The material must remain on their Web sites until 2016.
The corrective statements would have to appear on Web sites, in full-page advertisements in major newspapers, on three major television networks, and on cigarette packaging.
She also ruled that the tobacco companies will have to pay for the government's court costs. Current figures are not available, but the government has previously said it spent more than $130 million on the case.
Kessler said sale of a cigarette brand or business to an outside entity can only occur with her permission.
The companies pursued profits "with little, if any, regard for individual illness and suffering, soaring health costs, or the integrity of the legal system," Kessler said.
But Kessler exempted Liggett from the remedies, saying the company "does not have a reasonable likelihood of future (racketeering) violations" because it withdrew from the conspiracy in the mid 1990s.
The judge said she was barred from imposing stricter penalties by a February 2005 ruling of the U.S. Court of Appeals for the District of Columbia Circuit.
That opinion, written by U.S. Appeals Court Judge David Sentelle, barred the government from seeking $280 billion in past industry profits, depriving the government of its biggest potential weapon in the case.
Lawyers for the Justice Department eventually asked the judge to instead require tobacco companies to fund a 10-year, $14 billion anti-smoking program if the government prevailed.
But in Thursday's opinion, Kessler said that remedy was also out of step with the appeals court ruling, which dictated that civil racketeering remedies focus on the prevention of future misconduct, not punishment of past misdeeds.
Public health groups applauded Kessler for holding the tobacco companies liable but expressed disappointment in the remedies.
"It's... worthy of a life sentence but instead they got a slap on the wrist," Cass Wheeler, the chief executive of the American Heart Association, said in a statement.
The Justice Department applauded Kessler's finding of liability, and while disappointed with the remedies, was hopeful they could have "a significant, positive impact on the health of the American public."
Press - August 17, 2006
Judge: Tobacco firms deceived smokers
WASHINGTON - A federal judge ruled Thursday that the nation's top cigarette makers violated racketeering laws, deceiving the public for years about the health hazards of smoking, but said she couldn't order them to pay the billions of dollars the government had sought.
U.S. District Judge Gladys Kessler did order the companies to publish in newspapers and on their Web sites "corrective statements" on the adverse health effects and addictiveness of smoking and nicotine.
She also ordered tobacco companies to stop labeling cigarettes as "low tar," "light," "ultra light" or "mild," since such cigarettes have been found to be no safer than others because of how people smoke them.
In her ruling in the long-running case, the judge said, "Over the course of more than 50 years, defendants lied, misrepresented and deceived the American public, including smokers and the young people they avidly sought as 'replacement smokers,' about the devastating health effects of smoking and environmental tobacco smoke (secondhand smoke)."
Kessler, who presided over the nonjury trial in the case, said that adoption of a national stop-smoking program, as sought by the government, "would unquestionably serve the public interest" but that she was barred by an appeals court ruling that said remedies must be forward-looking and not penalties for past actions.
The government had asked the judge to make the companies pay $10 billion for smoking cessation programs, though the Justice Department's own expert said $130 billion was needed.
That reduction in recommended remedies led to accusations that Robert McCallum, an associate attorney general appointed by President Bush, had tried to weaken the case. An internal Justice Department investigation cleared him of wrongdoing, however, saying he was supporting a figure he thought could be sustained on appeal. McCallum is now U.S. ambassador to Australia.
Kessler's decision came nearly a decade after the states reached legal settlements with the industry worth $246 billion and aimed at recovering health care costs. Those settlements imposed some restrictions on the industry, such as banning ads on billboards and public transportation.
In the federal case, tobacco companies had denied committing fraud and had said changes in how cigarettes are sold now make it impossible for them to act fraudulently in the future.
In addition to saying she could not force the companies to pay for a quit-smoking program, Kessler rejected a government bid to impose fines on the industry if youth-smoking rates fail to drop in the coming years.
Mark Smith, a spokesman for R.J. Reynolds Tobacco Co., said company officials were "gratified that the court did not award unjustified and extraordinarily expensive monetary penalties."
At the same time, Smith said, the company was disappointed by Kessler's finding that the companies had conspired to violate federal law and deceive consumers. He said company lawyers would analyze the decision and decide a next course of action.
The Justice Department, which filed the lawsuit, expressed disappointment in Kessler's decision not to impose financial penalties against cigarette makers.
"Nevertheless, we are hopeful that the remedies that were imposed by the court can have a significant, positive impact on the health of the American public," the department said.
Sharon Eubanks, who recently stepped down as the head of the government's tobacco team said, "We won. It's clear the government won. This is the first time they've been found to violate the racketeering statute. For crying out loud, that's significant. They're racketeers."
The government filed the civil case under a 1970 racketeering law commonly as RICO used primarily to prosecute mobsters in cases in which there has been a group effort to commit fraud.
The tobacco companies - except for one defendant, Liggett Group Inc. - were ordered to pay the government's cost for pursing the lawsuit. The government's costs, according to the most recent Justice Department estimate, were more than $140 million.
The suit was first filed in 1999 during the Clinton administration. The Bush administration pursued it after receiving early criticism for openly discussing the case's perceived weaknesses and attempting unsuccessfully to settle it.
A separate court issued an interim ruling last year, finding that civil racketeering laws did not permit the government to seek $280 billion from the companies for money they allegedly earned over many years through fraud.
During the trial, Kessler heard accusations that the companies established a "gentleman's agreement" in which they agreed not to compete over whose products were the least hazardous to smokers. That was to ensure they didn't have to publicly address the harm caused by smoking, government lawyers said. Tobacco lawyers denied the contention.
The defendants in the federal lawsuit were: Philip Morris USA Inc. and its parent, Altria Group Inc.; R.J. Reynolds Tobacco Co.; Brown & Williamson Tobacco Corp.; British American Tobacco Ltd.; Lorillard Tobacco Co.; Liggett Group Inc.; Counsel for Tobacco Research-U.S.A.; and the now-defunct Tobacco Institute.
The only cigarette maker excluded from Kessler's ruling was Liggett.
Kessler credited Liggett with coming forward in the 1990s to admit smoking causes disease and is addictive and for being the only company to disclose the ingredients of its cigarettes on its cartons. She also said the company had been helpful as state and federal officials pursued claims against the industry.
"Liggett is pleased with the court's decision to award no remedies against the company," said Carrie Bloom, a spokeswoman for Liggett, which is based in Mebane, N.C., and makes discount brands.
Press - August 15, 2006
New York mayor puts own $125 million into anti-smoking campaign
By Sara Kugler
Mayor Michael Bloomberg, a billionaire and former smoker, announced Tuesday he is pouring $125 million of his own money into a worldwide campaign against smoking, a cause he said is largely neglected by philanthropists.
Bloomberg's fortune is estimated at $5.1 billion, making him the 40th richest American and 112th in the world, according to Forbes magazine. He built his wealth after founding the financial information company that bears his name, and he gives away millions of dollars each year to benefit medical research, arts groups and education, among other causes.
Now that the 64-year-old Republican mayor is in his last term and still enjoying sky-high approval numbers, every word he utters and move he makes outside city limits stirs speculation about his future plans. He has said repeatedly he will not run for president and plans to create a foundation for full-time charitable work when he leaves City Hall in 2009.
Bloomberg, who quit smoking about 30 years ago, noted Tuesday that he recently bought a building on the Upper East Side of Manhattan to house his foundation and said the anti-tobacco initiative is an example of what the foundation will do.
The mayor typically writes his charitable checks without announcing that he is doing so, but he made a special effort to publicize this donation, which will be spread among several established organizations that have not yet been selected.
"Unless we take urgent action, this century a billion people will die from smoking," Bloomberg said. "It is one of the world's biggest killers, and it has sadly been overlooked by the philanthropic community."
Dr. John Seffrin, CEO of the American Cancer Society, said the gift was overwhelming in its size and would go a long way toward stopping smoking worldwide.
"There has never been this kind of philanthropy dedicated to tobacco control," Seffrin said. "Once again the mayor's making history, and this will save more lives than any other way that money could be spent."
Bloomberg, who outlawed smoking in city bars and restaurants during his first term, said the funds will help jump-start an international no-smoking drive over two years.
Recipients will use the cash for programs that help smokers quit and educate children about the dangers of starting; for funds to push for smoking bans and higher tobacco taxes in other cities and countries; and for a system to track global tobacco use and the effectiveness of anti-smoking efforts.
According to the World Health Organization, an estimated 1.3 billion people worldwide are smokers. In 2003, the WHO adopted an anti-tobacco treaty that requires participants to restrict tobacco advertising, put tougher health warnings on cigarettes, enact tax hikes and install smoking bans.
Vince Willmore, spokesman for the Campaign for Tobacco-Free Kids, said the treaty has helped establish a global infrastructure to fight tobacco but the effort desperately lacks funding.
"This initiative will give a tremendous boost to efforts around the world to implement the proven measures that we know work to reduce smoking," Willmore said.
The effort mirrors what Bloomberg already has begun in New York. Besides the smoking ban, the city health department runs an aggressive program focused on quitting. Nearly 1.2 million New Yorkers smoke, and health officials have given out thousands of free nicotine patches.
Ithaca Journal - August 11, 2006
Slaterville bar fined $500 for 3rd smoking violation
By Andrew Tutino
SLATERVILLE SPRINGS — The lone bar here became the first business in Tompkins County to be fined for repeatedly violating the local and state anti-smoking laws.
The owners of the Crooked Board Tavern, David and Caryl Arsenault, were fined $500 by the Tompkins County Board of Health on Tuesday for violating the county's anti-smoking law for the third time in as many years.
On May 1, a county public health sanitarian observed David Arsenault smoking in the barroom, according to findings of fact issued by a hearing officer in June.
At the hearing, held on June 21, Hearing Officer Robert J. Spitzer concluded the Crooked Board Tavern was in violation of the law and recommended that the county fine the Arsenaults $1,000 — a record amount and the maximum penalty that can be levied under law.
The Arsenaults did not attend that hearing, but did attend the Board of Health meeting on Tuesday. At the meeting, the board reduced the fine to $500.
“The whole thing is bogus,” David Arsenault said. “They should have dropped it to nothing.”
He said the establishment abides by the law, but patrons do light up. He said he can't afford to lose customers so his options for disciplining them are limited.
“There is nothing I can do,” he added.
The Crooked Board Tavern, located at 21 Creamery Road, was fined under the local law passed by the Tompkins County Legislature in 2003. That law is essentially the same as the New York State Clean Indoor Air Act passed by the state Legislature that same year.
The laws essentially ban smoking indoors at businesses, including restaurants, private clubs and taverns.
Businesses can apply for a waiver if they can prove loss of income and show that they are able to provide patrons with a sealed-off, smoking-only room as an alternative.
The local version of the law was passed because county officials were fearful the state law would become watered down due to lobbying from tavern and restaurant owners.
The Arsenaults must pay the $500 fine within 30 days of the Board of Health's vote.
Press - August 7, 2006
Tobacco Wholesalers Mull Suit Over NY Cigs
By Carolyn Thompson
BUFFALO, N.Y. — Tobacco wholesalers frustrated by mixed messages from the state over whether they are still allowed to supply Indian retailers with untaxed, unstamped cigarettes are ready to ask a court to intervene.
At issue is a law that went on the books March 1 that bars wholesalers from selling cigarettes to reservation retailers who sell them tax-free. Attorney General Eliot Spitzer says the law is in effect; the state Department of Taxation and Finance says it is not yet being enforced.
The conflicting positions have meant headaches for businesses like Day Wholesale in Franklin County, which finds itself scrambling to preserve its supply of cigarettes for reservation and non-reservation customers.
According to a lawyer for Day, Philip Morris USA has given wholesalers that supply New York Indian tribes until noon Wednesday to promise to stop selling unstamped cigarettes on reservations or provide written proof that such sales are legal. Otherwise, a July 11 letter said, Philip Morris would stop shipping cigarettes.
The wholesalers say they are in the middle of a political fight between the attorney general's office and the Pataki administration's Department of Taxation and Finance over an issue that has sparked violence in the past.
"It's the state of New York that doesn't seem to have everybody together as to what they're supposed to do," said attorney Margaret Murphy, who represents Day Wholesale.
The letter from Philip Morris came two weeks after an attorney from Spitzer's office sent letters to tobacco companies, including Philip Morris, telling them that Day and other wholesale clients were continuing to sell tax-free cigarettes to Indian retailers in violation of state law.
"By this letter, we are putting you on notice of this conduct and asking for your cooperation in ending it," the letter from Assistant Attorney General David Weinstein, said.
Philip Morris USA spokesman Bill Phelps declined to comment Monday except to say that the company supports the legislation governing sales by wholesalers to reservations.
Murphy said a lawsuit to be filed this week will seek to end the uncertainty. In the meantime, she said, her client will stop selling unstamped cigarettes to avoid being shut off by Philip Morris.
"We're bringing a lawsuit against the state of New York, against the attorney general, asking a court to resolve the issue," Murphy said. "Is the law in effect? What is the obligation of licensed wholesalers?"
Murphy contended the legislation is not active because certain provisions _ including the issuance of coupons that would allow Indian retailers to sell untaxed cigarettes to tribal members while taxing other customers _ have not been met.
A spokesman for Spitzer said that doesn't matter.
"The sale in New York of unstamped cigarettes is a clear violation of the law, regardless of who is doing it," Marc Violette said, "regardless of whether it's a private individual or an Indian nation or anybody else."
A spokesman for the Department of Taxation and Finance did not return a call for comment Monday.
The law aimed at wholesalers is among the latest attempts by the state to collect millions of dollars of tax revenues on cigarettes sold by Indian retailers to non-Indian customers.
Tribes such as the Seneca Indian Nation, which operates numerous smoke shops in western New York, say centuries-old treaties shield them from having to collect taxes on their sovereign territories. That allows them to sell at lower prices than their non-Indian competitors. Seneca retailers sold $347.5 million worth of tobacco products in 2003.
A 1997 attempt by the state to collect tax on reservation sales resulted in violent clashes between state police and tribal members in western New York.
- August 7, 2006
Set to Put Out Casino Smoking
Gambling’s hard-won exclusion from the ban could go up in smoke
By Scott Goldstein
STATEHOUSE - There is a strong move afoot to expand the state’s indoor-smoking
ban to Atlantic City casinos by the end of the year. Gov. Jon Corzine has
already said he would happily sign such a measure into law.
“I’m in favor of an overall smoking ban,” Corzine told NJBIZ last spring. “If the bill comes to my desk, I will sign it.”
The state’s 12 casinos fought hard to win their exemption from the indoor smoking ban signed in January by then-Gov. Richard Codey. But last week, one of the casinos’ strongest champions in the statehouse, Sen. William L. Gormley (R-Atlantic), had a concise answer when asked about the prospect of extending the ban to the gambling halls. “There’s going to be changes,” Gormley said.
Sen. Shirley K. Turner (D-Mercer) plans an aggressive drive for a bill (S-1089) to extend the ban to casinos when the full Legislature returns to Trenton in October. “I’m looking to push this to the forefront in the fall and hopefully we can get this done before the end of the year,” says Turner, who co-sponsored the bill with Sens. John H. Adler (D-Camden) and Joseph F. Vitale (D-Middlesex).
The measure could hit a roadblock in Assembly Speaker Joseph Roberts (D-Camden), who says it may be premature to discuss broadening the measure that officially took effect on April 15. “Before extending the ban, the spe1aker wants to make sure that the law is working as designed and properly enforced, and that an extension would not lead smokers to take their business elsewhere,” says Roberts spokesman Derek Roseman.
Three casinos are currently expanding, and three companies have expressed interest in spending more than $1 billion apiece to build new casinos here.
A coalition of bars, restaurants and bowling alley operators sued the state in March, claiming that exempting casinos from the smoking ban unconstitutional.
Last month, a casino worker diagnosed with lung cancer sued the operator of the Tropicana Casino and Resort, claiming the casino failed to protect its employees against secondhand smoke. Vincent Rennich, 48, of Somers Point, a casino tables supervisor since 1981, claims that Aztar Corp., which owns the Tropicana, worked harder at getting an exception to the state's smoke-free law than protecting employees with ventilation equipment.
George DiFerdinando, chairman of New Jersey Breathes, an anti-tobacco coalition, said his group recently hosted a forum for casino employees “where over 50 workers came and wanted to know why they were second-class citizens. The 40,000 workers [in casinos] need to know why they were left behind. We will not rest until those 40,000 and their families are protected.”
“Clearly Atlantic City casino operators would feel an economic hit if smoking were prohibited,” says Joe Weinert, vice president of Spectrum Gaming Group, a Princeton-based firm that tracks trends in the gaming industry. But Weinert says the casinos have bigger worries on the horizon, particularly the prospect of the state legalizing slot machine-like terminals in the Meadowlands (see sidebar).
“I think that smoke-free casinos are inevitable,” he said. “At least there is an upside in terms of happier and healthier employees, cleaner casino floors and it greatly reduces the possibility of legal action.”
Corzine appears sympathetic. “A lot of people across the state are healthier and more secure because they don’t have to deal with secondhand smoke,” Corzine said earlier this year. “Personally, I would do that everywhere.”
However, he added, the economic impact “ought to be studied and debated. Atlantic City is on track to be a full competitor of Las Vegas if we continue to make the investments we are making, so we shouldn’t be undermining that just casually. I personally don’t believe that a smoking ban will derail that.”
Daily Enterprise - August 5, 2006
Cigarette tax dispute leaves Day Wholesale facing lawsuits
By Jacob Resneck
TUPPER LAKE — Day Wholesale is facing several lawsuits seeking damages against cigarette wholesalers who sell untaxed cigarettes to non-natives on Indian reservations in the state. It’s a fight that’s pitting cigarette wholesalers, the city of New York, Indian reservations and the state’s tax and finance authority against each other, with a string of unlikely alliances.
Attorneys for the city of New York said a 2005 city Department of Health survey found that about 15 percent of all smokers consume untaxed cigarettes. In 2004, a state DOH study projected that the state loses as much as $576 million in lost tax revenue through the sale of untaxed cigarettes, the city’s lawsuit said.
“The claim against (wholesalers) is that they’re simply selling untaxed cigarettes,” city lawyer Eric Proshansky told the Enterprise. The reason the city is aggressively pursuing the case now is to enforce legislation passed in March requiring cigarette taxes and tax stamps on all cigarettes sold within New York state, he said.
Peter Day, owner of Day Wholesale in Tupper Lake, says his company has done nothing wrong and is following the legal advice of the agency that regulates state cigarette tax, the Department of Taxation and Finance.
“The law hasn’t really changed,” Day said.
In fact, it’s this authority in charge of regulating cigarette taxes that is — indirectly — rising to the defense of wholesalers. In a legal opinion released March 16 by the Department of Taxation and Finance, wholesalers were advised that the department, “has no intention to alter its long-standing policy” regarding the sale of untaxed cigarettes on Indian reservations. The new law, the legal opinion said, needs to be amended to respect Indian sovereignty and “avoid excessive entanglement in Indian commerce.”
Taxation and Finance spokesman Tom Bergin said he couldn’t comment because of the litigation involved, but he confirmed that his department is advising cigarette wholesalers that the law is not being enforced until the law is amended to the satisfaction of the commissioner of Taxation and Finance.
“We said we’re not going to enforce this law,” Bergin said. “We’re going to consider some amendments” before directing wholesalers to change their business practices.
Proshansky said the city takes issue with the Department of Taxation and Finance’s selective enforcement of laws.
“We believe, regardless of what an agency does, it’s on the books,” Proshansky said. “It’s a law; you have to obey it — regardless of whether an agency enforces it.”
But Day said he and other wholesalers will continue to follow the advice of the Tax and Finance commissioner, and he expects the lawsuits against wholesalers to be thrown out of court.
Day, who employs 22 people in Tupper Lake, said he’s been doing business with the Indian reservations for 18 years and is confident that he’ll prevail in court. About 80 percent of his revenue is from the sale of cigarettes and tobacco products to Indian reservations, Day is quoted as saying in a deposition with Seneca County attorneys.
Day said the whole issue is the result of rising taxes, which naturally increases demand for tax-free products. With the state collecting $15 per carton in excise tax and $3.60 in sales tax, it is the state that profits the most from the sale of cigarette sales, Day said. And New York City collects even more, with an additional $1.50 per pack.
“The simple solution is for state government to reduce onerous excise taxes on cigarettes, tobacco and motor fuel,” Day said. “Then there would not be the incentive for people to go shopping on the reservations. But all they want is to get the Indians out of the cigarette business.”
In the federal lawsuit, which the wholesalers are expected to answer by the end of the month, the City of New York seeks damages from the wholesalers, including city excise and sales taxes lost as a result of alleged violations of the March statute requiring that cigarettes to non-Indians be taxed.
The lawsuit is also asking the court to cease the practice of selling unstamped cigarettes and tobacco products in the state. This lawsuit, filed in U.S. District Court in Brooklyn last month, was preceded by two similar lawsuits, brought by Seneca County and the New York Association of Convenience Stores.
Day said he’s confident these lawsuits will be thrown out as they impinge on tribal sovereignty, which only the U.S. Congress can legislate.
“The Indian nations have rights and treaties in this state that go back to colonial times,” Day said. “These nations were never defeated; they entered into treaties. They were looked on to be brothers and equals with the Europeans. All we’re asking is that these treaties be recognized and be allowed to have commerce as they’ve always had it.”
Sun - July 25, 2006
LAW DEPARTMENT SUES CIGARETTE WHOLESALERS
The city's law department has sued seven cigarette wholesalers for not paying taxes on tobacco sold on Native American reservations across the state. The lawsuit was filed yesterday in Brooklyn and goes after six New York vendors and one in Vermont, the city's corporation counsel, Michael Cardozo, said in a statement."Although smoking is never encouraged, since it is legal, the city must ensure that all laws are followed appropriately," Mr. Cardozo, said. "By making cheap cigarettes available, the wholesalers' practices also cut into the efforts by all levels of government and the private sector that are aimed at reducing smoking by children and teenagers." (Also see Press Release)
Evening Bulletin - July 18, 2006
N.Y., N.J. Businesses Say Smoking Ban...
By Dan Hirschhorn
New York - In the working-class borough of Staten Island, an assistant manager of a bar chuckled at what hardly seemed like a joking matter. A smoking ban was instituted in the state three years ago, and the effect at Mug Shots was clear.
"[Business has] probably been cut down by half because of it," Steve Conroy said with a chuckle. Mug Shots has increased food service and added an outdoor area for smoking in response to the ban, but as Conroy said, "there's only so much you can do."
As businesses in Philadelphia brace for a smoking ban that may take effect next year, premonitions of what could come can be found here and in New Jersey, which also recently instituted a smoking ban.
Mayor John Street has not committed to signing smoking ban legislation passed by City Council June 21, but he has indicated he is in favor of the ban, leading many to believe he will sign the bill.
The legislation would ban smoking in all public buildings - including restaurants and bars - in Philadelphia, with only outdoor cafes, private clubs and tobacco retailers exempt. Neighborhood taverns that gross less than 10 percent of their sales from food could apply to be exempt, but the exemption would only last two years.
Business owners, industry experts and economists seem to almost universally agree that the bans in New York and in New Jersey have had significantly detrimental effects on sales, although estimates vary as to the precise impact on business. Experts say traditional bars and taverns - particularly ones in working-class neighborhoods with high smoking rates - have been affected the most, while nightclubs and restaurants have seen smaller drops in business. Some restaurants have reported an increase in business.
Government statistics downplay the losses, but even those numbers show
a clearly negative effect on most establishments.
"There's no question ... that the smoking bans have hurt the taverns and the bars," said Scott Wexler, the executive director of the Empire State Restaurant and Tavern Association.
He said a loss of about 20 percent of sales has been typical.
"People have seen gains from the floor, closing the gap in the losses. But most of my members are still doing less business today than they were before the ban ... About 25 percent of our member establishments closed over the last three years."
John Dunham, who is the principal of Guerilla Economics in New York and has published several studies analyzing smoking bans, said there is no questioning the negative effect the bans have on businesses.
"I personally as an economist think a business should cater to its customers, and if a bar has smoking customers, it should cater to that," he said.
Wexler said that, even when people go to bars, they spend more time
outside smoking and less time inside spending money.
"People don't go to bars to drink," he said. "It's cheaper to drink at home. They go to bars and taverns to socialize. When the social environment becomes less hospitable, they find other ways to do it."
David Rabin, who owns Lotus nightclub in New York's Meatpacking district
and is the president of the New York Nightlife Association, said the "other
ways" have yielded an exorbitant amount of pedestrian smoking traffic on
the streets of the city.
"There's been an enormous increase in noise complaints from people outside," he said. "You can't dump dozens of smokers under people's windows and expect there to be peace. There won't be."
Rabin said nightclubs have had an easier time adjusting to the ban than bars.
"I think nightclubs have come back from the initial shock, more than a lot of little bars that got smacked," he said.
Sometimes, that initial smack made people decide to allow smoking anyway, Wexler said.
"That economic reality has caused a fair number of places to flaunt the law pretty plainly," he said, estimating that between1,500 and 2,000 establishments still allow smoking. "Most health departments have taken an enforce-by-complaint approach, and if everyone in the bar is okay with smoking, then no one's complaining."
Things are somewhat different in New Jersey, where the ban has only been in effect for three months and certain businesses - casinos in particular - are exempt.
Cathy Burke, the co-owner of Irish Pub in Atlantic City, which also has two locations in Philadelphia, said the exemptions create an unfair playing field.
"The weather's nice now, so you can still smoke outside," she said. "What's going to happen when it gets cold?"
She said her customer is a casino customer -her pub is less than two blocks away from a casino - and competing with free food and drink offered at casinos was hard enough before casino floors were the only place people could smoke. She said she worries about casinos now building big bars to attract more customers.
"It's a bad situation," she said. "I'm here to defend my constitutional right to equal protection. I don't want a ban for the casinos, but I don't want a ban here either."
With slot parlors on the horizon in Philadelphia and businesses already considering exemptions, Burke worries that the impending ban will have the same effect on her business in Philadelphia.
"I'm hopeful that [Mayor John Street] will see to it that what has happened to us in Atlantic City doesn't happen in Philadelphia," she said, adding that Mayor Street has been supportive of the hospitality industry in the past.
Mayor Street has said one of his objections to the smoking ban bill is its exemption for outdoor cafes.
Deborah Dowdell, the president of the New Jersey Restaurant Association,
sang only a slightly more optimistic tune.
"This industry is always going to snap back in some way, but the damage is pretty severe," she said. She agreed that the Philadelphia ban had the potential to set up a "very unlevel playing field."
"I wonder how enforcement will be fairly applied," she said.
For now, smokers in restaurants and bars in Philadelphia have at least a few more months to enjoy the air before it could get cleaned up.
Many of those smokers make late-night trips to Little Pete's, a 24-hour diner near Rittenhouse Square that allows smoking. Night in and night out, the diner is a hot-spot for smoking revelers at the end of their night.
Jimmy Dafis, a former manager at Little Pete's who still spends time
there, said he expects the ban to affect business "a lot."
"I wonder if the government will tell us what to eat and what not to eat," he said. "What's next?"
News - July 6, 2006
Florida Top Court Rules Out $145 Bln Tobacco Verdict
By Bob Van Voris
Philip Morris USA and other cigarette makers don't have to pay $145 billion to Florida smokers, the state's top court ruled, refusing to reinstate a punitive-damage award the companies had said would bankrupt them.
Shares of Altria Group Inc. and Reynolds American Inc.'s R.J. Reynolds Tobacco jumped to all-time highs on the ruling.
The court was reviewing the record $145 billion verdict that a Miami jury handed down in July 2000 against Philip Morris, a unit of Altria, Reynolds American Inc.'s R.J. Reynolds Tobacco and other U.S. cigarette companies. A state appeals court threw out the award in May 2003, calling it ``grossly excessive.'' The Florida Supreme Court affirmed that appeals decision today.
The ruling eliminates the biggest financial risk to the tobacco industry from lawsuits over smoking-related deaths and disease. It also removes a roadblock to Altria's plan to break up the company to make it more valuable to shareholders.
``The window is open, and Altria has an opportunity to go ahead and make the strategic changes they've talked about,'' said Herb Achey, an analyst at New York-based U.S. Trust, which manages about $107 billion including 22.9 million shares as of March 31.
Altria spokesman John Sorrells said the company is reviewing today's ruling and had no immediate comment.
Altria shares rose $4.21, or 5.7 percent, to $77.54 at 12:33 p.m. in New York Stock Exchange composite trading, while Reynolds American shares gained $5.36, or 4.7 percent, to $119.73. Loews Corp. shares jumped 81 cents, or 2.3 percent, to $36.31.
The court held that the case can't be treated as a class action, which would consider all the smokers claims in one case. Instead Florida smokers must proceed with their claims individually, the court said. Separate suits give claimants less leverage in any settlement. Florida smokers in the case were given one year by the ruling to file individual claims.
The court found that the amount of punitive damages was excessive ``because it would bankrupt some of the defendants.''
The verdict, the largest in U.S. history, was also found to be improper because the trial court decided the punitive amount for the whole class without first determining what actual damages were needed to compensate smokers for their injuries.
Smokers who pursue individual suits will be aided by an earlier decision in the case, upheld today by the Florida Supreme Court, that smoking causes certain specific diseases, including lung cancer and coronary heart disease.
$6.9 Mln Upheld
In today's decision, the court upheld $6.9 million in compensatory damages awarded to two smokers who served as representatives of the state-wide class. The court reversed $5.8 million in compensatory damages to a third class representative.
The Florida decision comes after the Illinois Supreme Court ruled on Dec. 15 that Philip Morris doesn't have to pay a $10.1 billion damage award to smokers of its light cigarettes in that state. The decision doomed similar suits against other cigarette makers in Illinois.
Altria Chief Executive Officer Louis Camilleri, 51, said in November that separating the company's tobacco and food businesses hinged on winning the Florida case decided today, the Illinois case, and the U.S. Department of Justice's racketeering suit against cigarette manufacturers.
A decision in the Department of Justice suit, which ended a nine-month trial in June 2005, could come at any time. The government reduced its demand in that case from $280 billion to $14 billion after an appeals court ruling favoring the industry.
The Florida suit was filed in 1994 on behalf of some 700,000 smokers in the state, including Howard Engle, a Miami Beach pediatrician with emphysema who represented the plaintiffs' class. Florida's 3rd District Court of Appeal overturned the award and decertified the class, asserting that ``the issue of damages requires individualized proof with regard to each smoker.''
The $145 billion award came after the second part of a three-phase trial, in a novel procedure that considered punitive damages before determining the amount of compensatory damages for each class member.
The third phase would have involved limited individual trials on claims by each of the smokers or their heirs.
``The fate of an entire industry and of close to a million Florida residents cannot rest upon such a fundamentally unfair proceeding,'' a state court of appeal said about the trial.
The appeals court also criticized Stanley Rosenblatt, the lead attorney for the smokers, saying he had ``irretrievably tainted'' the trial by making inflammatory racial appeals to the predominantly African-American jury and arguing that the companies wouldn't go bankrupt.
``We condemn in no uncertain terms some of these arguments,'' the court said. It disagreed with the lower court, ruling that the arguments did not require it to throw out the entire case.
Rosenblatt did not immediately return a message seeking comment on the ruling.
Any punitive damages verdict in new suits might be limited by the amount of actual damages found. In 2003, the U.S. Supreme Court said that most punitive-damage awards that exceed compensatory damages by 10 times or more are unconstitutional. The court said that a case involving ``a particularly egregious act'' that results in relatively low economic damages might be an exception.
In addition to Philip Morris, the world's biggest cigarette maker, and R.J. Reynolds, the other defendants in the case include Brown & Williamson Tobacco Co.; Loews Corp.'s Lorillard Tobacco Co.; and Vector Group Ltd.'s Liggett Group Inc. In July 2004, R.J. Reynolds acquired Brown & Williamson's U.S. operations.
On April 20, in its earnings report for the first quarter of 2006, Altria said that net income climbed to $3.48 billion, or $1.65 a share, from $2.6 billion, or $1.25, a year earlier. Revenue rose 3.1 percent to $24.4 billion, Altria said.
The case is: Engle v. Liggett Group, No. SC03-1856, Supreme Court of Florida.
York Sun - June 30, 2006
Sting Nets Scores of Markets Selling Cigarettes to Minors
By Jill Gardiner
City investigators have busted nearly 200 bodegas and supermarkets for selling cigarettes to minors over the last two years.
Mayor Bloomberg yesterday released the names of the stores, which were caught as part of an undercover operation using teenage volunteers posing as customers looking to buy cigarettes.
"These businesses were all too willing to put cigarettes in the hands of our kids," Mr. Bloomberg said. "In doing so, they not only broke the law, they opened the door to another child to become a lifelong smoker."
The announcement is part of the larger crackdown on the tobacco industry that Mr. Bloomberg and the city's health commissioner, Thomas Frieden, have been pursuing since they successfully convinced the City Council to ban smoking in restaurants and bars and impose higher taxes on cigarettes. Yesterday, Dr. Frieden did not rule out a move to raise the smoking age to 21 from 18. "It's certainly something that should be looked at," Dr. Frieden said. "We need to think about ways that we can further reduce smoking." The chair of the City Council's health committee, Joel Rivera, recently introduced a bill to raise the age.
The commissioner of the Department of Consumer Affairs, Jonathan Mintz, said the government can revoke a license after an establishment gets slapped with three "points." That may not necessarily be three citations, as stores can get a break on points if its employees attend state training. Stores must wait a year before applying for a new license.
"Many stores have told us that their tobacco retail license is sometimes the lifeblood of their business," Mr. Mintz said. "These are very serious consequences."
Dr. Frieden said he "was not going to pass a law to make homes smoke-free."
An employee at Space Market on University Place said the establishment had its license revoked last September. "They sent some people who looked like they were 30, at least 28, and they were underage. It's not fair," Jay Son said.
of Atlantic City - June 29, 2006
Legislator urges complete ban on smoking in casinos
TRENTON — New Jersey must move quickly to extend the state's indoor smoking ban to casinos, a state lawmaker said Wednesday.
State Sen. Loretta Weinberg, D-Bergen, cited this week's report from the U.S. surgeon general that called secondhand smoke a serious health hazard.
“We can no longer tolerate a double standard, where casino workers and nonsmoking patrons are put in harm's way because of the lobbying strength of the industry,” Weinberg said.
The state's smoking ban, which went into effect April 15, prohibits smoking in bars, restaurants and most other indoor public places. However, the rule excludes casino gambling areas.
Press - June 27, 2006
SUNY To Make All Dorms Smoke-Free
ALBANY, N.Y. -- State University of New York dormitories will be smoke-free in a year, SUNY Chancellor John Ryan said Tuesday.
Ryan told his staff to come with a plan to prohibit smoking in all SUNY residential facilities for the fall 2007 semester.
Currently, smoking is permitted in 13 percent of SUNY's dorm rooms and a few campuses allow smoking in some dorms and other residential facilities.
"We need to make this 100 percent," said Ryan, the former superintendent of the U.S. Naval Academy. "Smoking is not only a health risk but also a safety risk as cigarettes serve as ignition sources that result in fires. Our job is not just to educate students, but also to keep or start them on a path towards a healthy lifestyle."
Audrey Silk of New York City Citizens Lobbying Against Smoker Harassment said the move is a "test step" to banning smoking in private homes.
"These are peoples' residences," she said of the SUNY decision. "They allow it in hotel rooms, where 25 percent have to be designated for smoking. Why? Because it's peoples' temporary residence. The same applies to dorm rooms."
Most campus buildings are subject to state anti-smoking laws that ban smoking in public buildings and some campuses have adopted stronger measures outside buildings.
A year ago, Upstate Medical Center in Syracuse became the first of SUNY's 64 campuses to be designated smoke-free.
(PBS) - June 27, 2006
Groups Ask Pataki to Sign Back-Door Bill to Collect Cigarette Taxes
By Karen DeWitt
ALBANY -- A coalition of anti-smoking groups and convenience store owners is urging Governor Pataki to sign a bill passed by the state legislature that would prevent the sale of untaxed cigarettes in New York.
New York has a law on the books that requires the collection of the sales tax on cigarettes sold to non- Indians on reservations. But Governor Pataki has refused to enforce the statute, saying he still wants to try to negotiate complex settlements with tribes over issues like land claims and gambling casinos. Many Native American tribes say they don't have to collect the tax, because they are a sovereign nation.
The legislature, which has been budgeting the additional tax money for spending items for several years, passed new legislation in the final days of the 2006 session that would create a back door mechanism for collecting the tax.
The bill aims to stem the supply of illegal cigarettes to wholesalers who then sell to Indian reservation stores or other bootleg outlets without collecting the tax.
The State Tax Department, Attorney General, or City of New York would have the authority to name the black market wholesalers to cigarette makers. Manufacturers would no longer be allowed to sell the cigarettes to the wholesalers who are breaking the law, effectively cutting off the source of untaxed cigarettes.
Adding the Attorney General Eliot Spitzer's office to the list of authorities that could carry out the law is key, because Spitzer, unlike Pataki, supports collecting the tax.
The Coalition for a Tobacco Free New York's Russ Schiandra says 500 lives could be saved in the first year if the tax were uniformly collected. The group estimates, based on past data connecting higher cigarette taxes to the number of smokers who quit, that 50,000 fewer New Yorkers would smoke if they had to pay the full $1.50 per pack tax upstate, or the $3.00 per pack tax in New York City.
Jim Calvin, with the New York Association of Convenience Stores, also wants the tax collections to be enforced. Calvin admits that his group makes for strange political bedfellows with the American Cancer Society and Lung Association, but he says they have a common interest. The convenience stores are not against selling cigarettes, they want a level playing field with the stores on Indian reservations. Calvin says if the state has made a decision, that for public health reasons, it is going to charge high taxes on cigarettes, then the law must be enforced fairly. And he commends lawmakers for coming up with an alternative.
"What a shame, what a disgrace, that the legislature has to go around the governor to get a law enforced that the governor himself signed," said Calvin.
Calvin says convenience stores lose an estimated $1 billion dollars a year in cigarette sales because of the easy availability of untaxed cigarettes.
Governor Pataki is going to be leaving office at the end of the year,
and all of the major party candidates for governor to replace him, including
Eliot Spitzer, a Democrat, and Republican John Faso, favor collecting the
tax on Indian reservations. But the groups say they can't wait until then.
At the very least, they say, the law should be enforced sooner because
the state is losing around $1 million dollars in tax revenue a day.
Buffalo News - June 22, 2006
Senecas blast new law cutting tobacco supply
Seneca Nation of Indians President Barry E. Snyder Sr. called the passage of a state law to cut off the supply of tax-free cigarettes to Indian businesses a "back-door effort" to get Seneca tobacco stores to collect state taxes.
"The State Legislature has once again taken action to undermine our sovereign right to consume and trade tobacco products in our territory," Snyder said. "The nation, as well as individual Senecas, cannot be denied the ability to purchase tobacco products, because we are not subject to state taxes.
"As always," Snyder added, "we will contemplate any and all options that may be necessary to protect our economy and defend our sovereignty."
News - June 22, 2006
Reservation Cigarettes to be Taxed
by Virginia Butler
The state senate approved a bill to collect sales tax on tobacco products sold at Native American owned businesses.
The bill requires taxes be collected from manufacturers on the cigarettes they sell to all distributors, including all Native American distributors. The bill sponsor, State Senator Mike Nozzolio says the change will generate more than $400 million annually in state revenue.
The bill was sponsored in the assembly by William Magee, and it was approved there last week.
- June 22, 2006
Senate approves [cigarette tax measure]
By Yancey Roy
Another issue legislators took up Wednesday was cigarette taxes. They said they've found another way to end American Indians' practice of selling tax-free cigarettes: threaten to cut off their wholesalers.
The Senate passed a measure late Tuesday to prohibit cigarette manufacturers from selling smokes to wholesalers who sell to tax-free merchants. Effectively, this would force wholesalers to impose New York's steep taxes before selling them to Indian retail shops -- or face losing their supply.
The Legislature has for several years passed bills to force the state to collect sales taxes cigarettes and gasoline sold to non-Indians on Indian reservations. However, Pataki has vetoed measures, ignored the idea when the Legislature made it part of the state budget, and his Tax Department has deployed technicalities to delay the implementation.
Pataki officials have tried to negotiate "parity" deals in which tribes would voluntarily raise the prices of gas and cigarettes to match what nearby non-Indian stores charge -- without paying state taxes. But tentative agreements -- sometimes included as part of a way to settle long-standing Indian land-claim lawsuits and open Indian-run casinos -- have always fallen through.
The Legislature's new tactic would take the issue out of the governor's hands -- if he signs the bill -- a good move, according to anti-smoking groups who believe that high prices encourage smokers to quit.
Legislators have long complained that the state is losing $300 million or more annually because of reservations sales and that the practice hurts competing convenience stores.
"By collecting the taxes directly from tobacco companies when they sell cigarettes to distributors including Native American tribes, we are leveling the playing field for all businesses in New York State," said Sen. Michael Nozzolio, R-Fayette, Seneca County, who pushed the bill through the Senate.
Jim Calvin, head of the New York Association of Convenience Stores, said he doesn't think Pataki would sign the bill. Pataki aide Saleem Cheeks said only that the governor would review the legislation.
News - June 18, 2006
Post Office Said to Abet Cigarette Sales to Kids
Web Sites Offering Tax-Free Cigarette Sales Off Indian Reservations, Allegedly to Minors, Called Illegal
By Dan Harris and Felicia Biberica
New York Attorney General Eliot Spitzer says the U.S. Postal Service has become "the delivery arm of a massive criminal enterprise."
Every day, Native American businesses ship millions of cigarettes from reservations across the country.
While Native Americans on the reservation are entitled to tax-free cigarettes, the Web sites that offer those tax-free cigarettes for sale off the reservation are, officials say, illegal.
The public health community says Web sites that illegally sell cheap smokes are a real concern — especially when it comes to young smokers.
"The monetary incentive, from the state's perspective, is not what drives us," Spitzer says. "What drives us is the concern that kids will gain access to cigarettes online."
Studies confirm that children can easily buy cheap cigarettes online.
"I got Virginia Slims Light cigarettes, and I'm 14," said one teen who was working for law enforcement.
Spitzer, now running for governor of New York as a Democrat, is on a mission to shut down the sites. He's convinced private delivery services like FedEx, DHL and UPS to stop shipping cigarettes to individual consumers. But he can't convince the U.S. Postal Service.
"Somebody at the Postal Service," says Spitzer, "should be smart enough to say, 'Stop this. We don't need the money. It is illegal to deliver these goods. We shouldn't do it.' "
But Tom Boyle of the U.S. Postal Inspection Service says, "That's unfair to the Postal Service.
"We are not a private carrier," Boyle adds. "We are a government entity. … By law, we cannot just open packages. We have to get a federal search warrant."
Spitzer counters, "We're not saying to them they should be opening packages randomly. We're saying when there is a company whose sole line of business is to ship cigarettes, then you can say to the company, 'We don't think you should be delivering your product because we believe it may be contraband.' "
But deciding what's contraband or not, says the post office, is not their job.
"We're doing as much as we possibly can," Boyle says.
In the meantime, the two sides can't agree on how to solve what they both say is a problem. And so a branch of the federal government continues to deliver throughout the country what Spitzer says are millions of illegal cigarettes.
10 Now - June 17, 2006
Councilors to vote on public playground smoking ban
City councilors in Watertown will vote Monday on a resolution to ban smoking on public playgrounds.
Councils said smoking on playgrounds is hazardous to children.
They said in addition to the smoke, discarded cigarette butts ruin the beauty of the park.
Councilors also said passing the resolution will have a positive effect on the lifestyle choices children will make.
York - June 14, 2006
Drop in smokers stalls
By Justin Rocket Silverman
With an unprecedented decline in city smokers under its belt, the Department of Health is concerned that the number of quitters may be leveling off as the initial shock of an $8 pack finally fades.
"We took two major steps with the Smoke Free Air Act and the new cigarette tax," said DOH spokesman Andrew Tucker, "and we saw the single greatest drop in the city's history. We think we can continue to see a decline."
New figures, however, suggest that most New Yorkers have quit quitting.
About 150,000 smokers kicked the habit in the two years after bars put away their ashtrays and high taxes were introduced, the city said.
But between 2004 and 2005, the number of city dwellers lighting up appeared to be on a slight upswing, according to the DOH figures.
According to the department, 18.4% of the city's adult population smoked in 2004. That number had inched up to 18.9% last year.
"Taxation is, by far, the single most effective tool against smoking," said Health Commissioner Thomas Frieden. "It is now more critical than ever that New York State grant New York City the authority to raise the city's tobacco tax."
Health officials say that if the city is allowed to add another fifty-cent tax, 10,000 people who would have died of smoking-related illnesses will instead be saved.
The DOH's goal is to have another quarter million New Yorkers quit smoking by 2008. But while higher taxes are seen as a sure-fire way to deter smokers, lawmakers in Albany are not likely to permit the tax hike this year.
That's just fine with Audrey Silk, founder of NYC Citizens Lobbying Against Smoker Harassment.
"To use the government's power of taxation to stop a legal behavior is just wrong," she said. "If you want to quit smoking, do it because you want to, not because you are being forced into it."
Rep. Charlie Rangel (D-Manhattan) is also opposed to new cigarette taxes, calling it a tax that unfairly targets the poor.
"If a guy makes a million dollars and a guy makes $10,000 they pay the same taxes on cigarettes... It is regressive," he told amNewYork in an interview in March.
Still, the DOH insists taxation is the most effective way to make people quit, and the smoking cessation is among its top priorities.
"Quitting is most important thing smoker can do," said the DOH's Tucker. "It's not easy, but there are things you can do to make it work."
Press - June 13, 2006
As drop in smoking stalls, city calls for another tax increase
The city's health commissioner called for another increase in cigarette taxes Tuesday after a survey showed that a two-year decline in the number of smokers in New York burnt itself out in 2005.
The survey by the Department of Health and Mental Hygiene found that the percent of New Yorkers who said they were smokers actually increased slightly, from 18.4 percent in 2004 to 18.9 percent in 2005.
Smoking rates were virtually unchanged for a decade before the city adopted a $1.50 per pack tax in 2002 and imposed a ban on smoking in most indoor public spaces in the spring of 2003. Before those changes, a survey found that about 21.6 percent of New Yorkers smoked.
Health Commissioner Thomas R. Frieden called on state legislators to pass legislation that would let the city raise cigarette taxes further, in hopes of forcing more people to quit.
"Taxation is, by far, the single most effective tool against smoking, which is still the leading epidemic of our time," Frieden said in a statement. He estimated that a 50 cent tax increase could prevent 10,000 premature deaths.
State legislation that would allow the city to pass an increase was introduced in the assembly in May.
Buffalo News - June 12, 2006
Tobacco firms aid fight against tax-free sales
By Tom Precious
ALBANY - In the decadelong battle to end tax-free cigarette sales by Seneca Nation and other Indian merchants, a new advocate has joined the scene: Big Tobacco.
Long on the sidelines in this controversy, the nation's top cigarette manufacturers - Philip Morris and R.J. Reynolds Tobacco - say they now support a measure to make it illegal for them to do business with wholesalers that sell tax-free cigarettes to Indian retailers.
In addition, legislation was introduced last week to add a high-tech weapon to the state's arsenal to slow bootleg and counterfeit cigarettes flowing into New York from other states and as far away as North Korea and Russia.
The bills are a two-pronged attack on an illegal cigarette trade that costs the state an estimated $500 million in lost tax revenue and creates new generations of smokers lured to cheap cigarettes, lawmakers say.
"The state is hemorrhaging tax revenue that is rightfully due the people of this state from the sale of cigarettes," said Assemblyman Alexander Grannis, D-Manhattan, a leading tobacco critic.
"When contraband cigarettes are sold, they're sold at lower prices, and keeping cigarette prices high and increasing them is one of the most effective ways to prevent and reduce smoking," said Eric Lindblom at the Campaign for Tobacco-Free Kids in Washington.
Last week, the Assembly overwhelmingly passed legislation directed at tobacco manufacturers that in turn supply the Indian retailers.
The legislation is seen as an end-run around Gov. George E. Pataki, who this year ordered his tax department not to enforce a new law that makes it illegal for wholesalers to sell tax-free cigarettes.
In a surprise to anti-smoking lobbyists, the nation's top tobacco manufacturers support the measure.
"We support it because it addresses the ongoing uncertainty of the [American Indian] tobacco sales," said Dana Bolden, a spokesman at Philip Morris, the world's largest cigarette company.
"We support it because it accomplishes the goal of preventing the sale of untaxed cigarettes without placing an undue burden on us," added Fred McConnell, an R.J. Reynolds spokesman.
Health groups and non-Indian retail groups are now zeroing in on the State Senate, which has been among the loudest critics of Pataki's refusal to try to collect the taxes on Indian cigarette sales. But Joseph Crangle, counsel to the Seneca Nation, said the measure violates federal interstate commerce provisions. Seneca leaders also say it would violate centuries-old treaty protections.
Not many others are opposed, though.
"Other than retailers profiting from the smuggling, there doesn't seem to be anyone else who opposes this," said Russell Sciandra, director of the Center for a Tobacco Free New York. He called on the State Senate to act by today to provide time to override an expected Pataki veto of the bill. Meanwhile, State Sen. Dale M. Volker, R-Depew, and Assembly Majority Leader Paul A. Tokasz, D-Cheektowaga, last week introduced legislation that targets the cigarette smuggling business. Tobacco contraband once was almost exclusively a business of trucks illegally hauling cigarettes into New York from states with low or no tobacco taxes.
In recent years, another illegal business is booming: the manufacture of fake major brand cigarettes complete with packaging and phony tax stamps that even retailers can't distinguish. These illegal cigarettes have a common characteristic: They either don't have the required tax stamp, or the stamps are phony. New York, like other states, since the 1950s has been using the same kind of heat-applied stamp affixed on the bottom of every pack of cigarettes by wholesalers who pay $1.50 per pack for the stamps.
No one has a clear picture just how many illegal or tax-free cigarettes are sold, although some industry groups have estimated as many as one-third of cigarette sales in New York are illegal.
State officials say they confiscate about 30 million cigarettes a year; most have no New York stamps. In recent years, a sophisticated business has spread around the world: copycat cigarettes. Produced cheaply mostly in Asia and Europe, they have flooded the United States. The Volker and Tokasz measure is modeled on a California program that puts a counterfeit-resistant stamp on cigarettes.
"It would be very difficult to get around," Volker said.
The stamps also contain encrypted information that can be read by tax agents using portable devices to determine if the cigarettes are legal.
In the first year, officials in Sacramento credit the new stamps and a related program with bringing in an additional $117 million in tobacco tax revenue. "We have found it to be effective," said Anita Gore, a spokeswoman with the California Board of Equalization.
Volker and Tokasz also have a parochial interest: They represent Lancaster, home to United Silicone, which made the tax stamping machines for the new California program. The machines can cost up to $120,000 apiece.
United Silicone and a Texas company, Authentix, already are laying plans for a possible bid for the New York business if the new measure is approved.
Observer-Dispatch - June 8, 2006
Oneidas won't consent to smoking ban hearing
Hearing officer to make report in 2 weeks
By Patrick Corbett
UTICA — The Oneida Indian Nation on Wednesday again rebuffed Oneida County's attempt to enforce a smoking ban in the Indians' Turning Stone Resort and Casino.
State Health Department Hearing Officer Armando Yacco said he would review Wednesday's testimony and make his recommendation to the health commissioner within two weeks.
County health department inspectors testified they saw more than 100 patrons smoking in the casino and connected hotel and retail area when they inspected the premises in November. Principal sanitarian Susan Batson said the absence of "no smoking" signs violated the state Clean Indoor Air Act.
County sanitarian Bobbi Jo Girven, who accompanied Batson on the inspection, said she saw a card player light a cigarette at a card table and "The dealer completely ignored it."
Yacco said he would expect a quick decision from the commissioner because the case "has been dragging on for a while."
Oneida Nation lawyer Peter Carmen showed up at a hearing in the County Office Building Wednesday and told Yacco, "We do not consent to this hearing." He said he would expect a state ruling to be challenged in court.
He said the Nation is sovereign and is not subject to the laws of another government. He said the Nation is willing to work out issues with the county on a government-to-government basis.
Carmen called Wednesday's session a "coercive hearing" and left the hearing room before the witnesses testified.
Yacco said that he previously had rejected the Nation's sovereignty argument, but he said he would review Carmen's latest submission in view of last week's U.S. District Court ruling that Oneida County could not foreclose on Nation property.
Batson said the county inspected the resort after receiving a second written complaint about smoking violations. She and Girven were the only witnesses.
Yacco said, "Mr. Carmen would have had the opportunity to cross-examine witnesses" if he had remained.
County Legislator Michael Hennessy, D-Sherrill, said he wasn't happy.
"Once again, the Oneida Nation has snubbed their noses at our laws and regulations. This attitude and behavior must come to an end now," Hennessy said. "The end will only come when state leaders have the courage to strictly enforce the laws of the state."
County Times - June 4, 2006
Smoking ban limits donations
By Jim Six
MONROE TWP. (NJ) -- About a half dozen American Legion members sat around an old picnic table behind Post 252 Friday, despite the humid heat.
Inside, the air conditioner was keeping the bar cool -- but out here, they can smoke.
Thanks to new state legislation prohibiting smoking in all public places but casinos, this American Legion post lost approximately $5,000 in bar income during the month of May, said Commander Joe Reed.
The post has a gaming license that allows them to operate a couple of Pull-Tab gambling machines, and the income from them is down about the same amount, Reed said.
Three-quarters of all the money brought in through the Pull-Tab machines goes to charity, he said. Last year, the post contributed approximately $90,000, but this year, Reed said, with the smoking ban cutting post income, the donations, too, will suffer.
"People are having a couple of drinks. They get tired having to go outside (to smoke), and leave," Reed said.
"There are no (new) non-smokers coming in, and smokers are just not coming," he said. In fact, he said, non-smoking members often join the smokers outside, since the camaraderie is an important part of why they come.
Members here agree on one thing: They don't think the state should be allowed to legislate what people can or can't do in what is essentially a private, members-only club.
Veterans, according to a letter Reed is preparing to send to Gov. Jon Corzine, "need a place where they can talk about things only another veteran can understand."
Watching members with disabilities have to struggle to go outside to have a cigarette "would break your heart," Reed wrote. "Have we forgotten the Greatest Generation? This act has, and does."
Smoking "doesn't bother me. It never has," said non-smoker Rick DeHart. "You can see the difference. There are less people here."
"It's not right," said smoker John Barton.
"You can fight and die for your country, but they tell you that you can't smoke. It's just not fair," said Barton. It's insulting now, he said, to have to huddle outside to smoke. None of the members knows what it will be like during the winter, he added.
"You can lose a leg, but you can't smoke. It's kind of asinine," said smoker Bob Baals. His advice to someone who would be bothered by second-hand smoke in the restricted-entry post: "Don't ring the bell to come in."
Baals said his 91-year-old father, who depends on a walker to get around, used to come to the post or the Veterans of Foreign Wars post to drink and play shuffleboard. Now it's so difficult for him to maneuver in and out for a smoke, he stays home.
Within the past year, the post installed several "smoke eater" air filters that cost nearly $4,000 each. Several members said the air in the bar was greatly improved then.
"People are outside and not playing the (Pull Tab) machines," said Bill Cipollone.
The post's 2005 donations went to local sports teams; scholarships; programs for needy families, fire, emergency medical services and police; the county Veterans Cemetery Honor Guard; the Vineland Veterans Home; the American Cancer Foundation; the township food bank; and even $15,000 to the American Red Cross for Hurricane Katrina relief.
"Everything's going to suffer if we keep going down," Reed said.
"They came into our house and told us we can't smoke? That's bull," said Service Officer Mike Strackbein, who is a non-smoker.
TV - June 2, 2006
More VLTs For Smokers at Batavia Downs
(Batavia, N.Y.) - The owners of Batavia Downs say they are going to move ahead with plans to put 50 video lottery terminals (VLTs) in a new smoking room.
Right now, Batavia Downs does have a room where patrons can legally smoke. That room has 18 VLTs.
The plan is to create a larger room with fifty terminals, because those “smoking” terminals get twice the play of others at the track.
The project still needs approval from state lottery officials.
York - May 31, 2006
Councilman: Raise smoking age to 21
By Chuck Bennett
Young New Yorkers would have to wait until they are 21 to legally buy their first pack of cigarettes if a controversial City Council bill is signed into law.
Quietly introduced earlier this month, the bill would raise the legal purchase age from the current 18, which is the standard across most of the state.
In fact, all tobacco-related goods, including cigars, chewing tobacco, rolling papers and pipes, would be off-limits to people under 21.
The bill's sponsor, Joel Rivera of the Bronx, the Democratic majority leader and chairman of the council health committee, said raising the age would cut down on teen smoking and "improve the general health of all New Yorkers."
"We figured, just like the drinking age is 21, the smoking age will be the same," Rivera said.
City statistics show teen smoking has actually been declining, from 23% in 1997 to 11% last year.
It is unclear how much support the bill has in the council. Rivera said he is reaching out to his fellow council members.
"The speaker will be evaluating the specifics of the legislation as it comes before the council," said Maria Alvarado, spokeswoman for Council Speaker Christine Quinn.
Mayor Michael Bloomberg, who spearheaded the bar and nightclub smoking ban in 2003, has not yet taken a position.
"We have yet to see the legislation, but we look forward to reviewing it," said Bloomberg spokesman Jordan Barowitz.
Neighboring Nassau County changed its legal smoking age to 19 last month.
"These people are ridiculous," said Audrey Silk, founder of Citizens Lobbying Against Smoker Harassment, "At what age will they decide we are adults these days? 30? 40?"
Meanwhile, Rivera is expected to announce another piece of legislation today, which is World No Tobacco Day. His bill would ban all flavored cigarettes -- except menthol and clove -- in the five boroughs.
"I think we should do an outright ban," Rivera said. "What it does is introduce smoking to people at a younger age. It's just not good for the kids."
R.J. Reynolds Tobacco, for instance, has introduced a line of alcohol-flavored cigarettes called Camel Exotic Blends. Flavors include Screwdriver Slots, SnakeEyes Scotch, and Blackjack Gin.
"Established smokers are not interested in these in the first place," said Corrina Freedman, director of advocacy for the American Lung Association of the City of New York. It is teens between 17 to 19 years old who find them attractive, she said.
As expected, Big Tobacco, wasn't supportive of the two council proposals.
Craig Fishel, a spokesman for R.J. Reynolds, said 18 is the appropriate age to purchase tobacco products. He further said that flavored cigarettes are not meant for teens.
"This is done to help differentiate Camels among adult smokers in the marketplace. These are marketed to adult smokers and adult smokers only," he said.
of Atlantic City - May 31, 2006
Smoking-ban campaign for casinos kicks off
ATLANTIC CITY — The American Cancer Society will kick off its campaign to ban smoking in the casinos at a meeting tonight at the Atlantic City campus of Atlantic Cape Community College.
Assemblyman Jim Whelan, who introduced the legislation, and several other speakers will talk about the effects of second-hand smoke and make a case for smoke-free casinos.
of Atlantic City - May 24, 2006
Smoking squabble hits A..C.
Outdoor lounge inflames Hilton neighbors
By Elaine Rose
ATLANTIC CITY — There is never a break from the standoff on the beach block of Providence Avenue. Seven days a week, nearly 24 hours a day, the two groups stare at each other from across the street.
Residents of the Ocean Villas condominiums on one side, employees of the Atlantic City Hilton Casino Resort coming outside for a cigarette break on the other.
It's one more byproduct of the state's month-old law that prohibits smoking inside public buildings. While patrons are still allowed to smoke in gaming areas, casinos no longer may provide indoor areas for employees who use tobacco.
Ocean Villas resident Terry Garro said she has counted as many as 22 smokers at a time standing across the street from her unit. Depending on which way the wind is blowing, the secondhand smoke sometimes drifts her way. Occasionally the smoking stations catch fire, sending up a cloud of “stinky smoke,” she said.
With warmer weather on the way, Garro would like to open her windows to let in a sea breeze. But with the smokers across the street, that won't be possible this summer, she said.
“This is my home. What do they think I live in, a chicken coop or something?” Garro said Tuesday afternoon.
Naomi Adams-Habib said she plans to return to Atlantic City from her winter home in Florida in a few days. She has macular degeneration, an incurable eye disease, and her doctor told her to stay far away from tobacco smoke because it can iritate the condition.
“I've had a couple of asthma attacks,” Adams-Habib said. “I don't need this.”
The casino is a 24-hour operation, and there is almost always someone smoking across the street, residents said. They feel like they have no privacy.
“When you sit out (on the porch) for a cup of coffee, you have 30 eyes looking at you,” condominium owner Dee Shepherd said. “You feel like you're in a movie.”
John Valenta said he's a light sleeper because of his experiences fighting in the Vietnam War.
“Conversation carries,” Valenta said. “They're out there giggling and talking,” and that often wakes him up at night.
The condominium residents said they have lived there since before Steve Wynn built the Golden Nugget in 1980 on the site of what is now the Hilton. It's not like they bought their units knowing they would live across the street from a casino.
In the past few days, the residents have stepped up the offensive. A couple of them have called in to talk-radio shows and they erected a large sign in a common-area window stating “Hilton Casino has NO consideration for their neighbors.”
But the smokers say they have no choice.
Providence Avenue is the outdoor area the casino set up and told them to use, they said, adding that they use the four smoking stations provided and don't litter the ground with their butts.
The employees aren't happy with the situation, either.
“They take pictures, they film, they yell,” said one Hilton employee, who didn't want to give her name. “They're harrassing us something terrible. It's not our fault we have to be outside.”
“I'm humiliated with that sign,” cocktail server Christine Baglivo said.
The Hilton has “bent over backwards” to accommodate the Ocean Villas residents, and all the employees get is trouble, Baglivo said.
The residents get angry if workers cross Providence Avenue to the parking lot where they pay to park their cars. Casino workers can't be dropped off or picked up at the Providence Avenue side of the building, and they get written up if they set even a toe on Ocean Villas property, employees said.
The Hilton has two other outdoor smoking areas, but the Providence Avenue spot is for dealers and other front-of-the-house employees who get limited break time, spokesman Marc DeLeo said.
“Because this has come about, we are going to look for alternatives,” DeLeo said.
- May 19, 2006
Confusion Over New York City's Anti-Smoking Program
After 40 years of smoking, Susan Goldstein said she was ready to quit.
"It shortens your breath, it raises your blood pressure, it actually stinks," said Goldstein, of Bensonhurst. "It makes your body stink, your house smells, everything smells, and if I could get off I would."
After trying and failing to quit, Goldstein's hope was rekindled when she heard about a city program to give away 35,000 nicotine patch kits to residents who want to quit.
"They said if you call 311, they have 35,000 free patches that they would give out if you meet the eligibility requirements," she said.
But those requirements turned into a sticking point for Goldstein. She gave the program her name, date of birth and ZIP code, but was refused entry.
"The guy came back and said, 'Well, you're not eligible.' I said to him. 'OK, why?' And he said, 'I don't know,'" Goldstein said.
She said she was puzzled by the rejection.
"I thought you had to be a certain age, or because they asked you for your ZIP code you had to be from a certain borough, so I just left it alone," she said.
NewsChannel 4 checked the program requirements. If you are over the age of 18 and live in one of the five boroughs, you qualify. But you must agree to let the Health Department follow up on your progress, so they need contact information to check with you later.
The Health Department explained that they've found people who know there will be a follow-up are more likely to quit and stay smoke-free. The follow-up requirement discourages pranks and people who might waste the valuable and expensive nicotine patches.
Goldstein initially told the Health Department she didn't want them to follow up with her in a year to monitor her progress. She has since agreed to a follow-up, now that she knows it's a requirement.
The city still has about 10,000 patches left, and Goldstein will be receiving one of them.
Press - May 11, 2006
Proposed law would raise legal smoking age to 19
ALBANY, N.Y. A proposal to raise the legal smoking age to 19 is making its way through Assembly committees again.
Assemblywoman Sandy Galef, co-sponsor of the "Tobacco 19" bill, says 53-thousand New Yorkers under the age of 18 will become regular smokers this year. She says raising the age for buying tobacco will reduce that, because it will cut down on social sources used by underage smokers to get access to tobacco products.
Four states have adopted the 19-year-old purchasing requirement, including Alabama, Utah, Alaska, and New Jersey. Galef says they've seen a decrease of 8 percent to 10 percent in underage smoking. The counties of Suffolk and Nassau on Long Island also have Tobacco 19 legislation in effect.
The measure is supported by the American Cancer Society and American Heart Association, but smoking rights groups complain it's another attempt by government to dictate their lives.
News - May 3, 2006
New York to Distribute Nicotine Patches for Smokers (Update1)
By Heather Burke
New York's health department plans to distribute nicotine patches to residents as part of its campaign against smoking.
New York City will distribute 35,000 kits with a four-week supply, which typically costs about $150, to residents who call the 311 New York City information line. This is the third giveaway since the program began in 2003 and so far 80,000 kits have been distributed.
The city's campaign to reduce smoking has included increasing the tax on cigarettes to $1.50 a pack, a ban on smoking in workplaces, bars and restaurants and public education programs. The number of smokers has been cut by about 200,000 in the past four years; more than 1 million New Yorkers still light up, Health Commissioner Thomas R. Frieden said.
``Nicotine patches are effective and safe,'' Frieden said today during a press conference. ``They just about double the likelihood you will quit.''
A nicotine patch looks like a bandage and is generally changed once a day, according to the American Lung Association. Smokers who use products to help them quit have a success rate as high as 31 percent, the organization said. And while 90 percent of smokers try to quit without using anything, less than 10 percent are successful, the association said.
One of every six deaths and about one-third of preventable deaths are smoking-related, according to the health department.
City residents who call 311 also can receive referrals to smoking-cessation programs. An additional 50,000 patch kits have been distributed for free to residents through quit-smoking programs at hospitals, clinics and community organizations throughout New York City.
Press - May 3, 2006
Group sues state to overturn law banning Internet tobacco sales
By Mark Johnson
ALBANY, N.Y. -- A group of cigarette distributors and sellers filed a lawsuit against the state Wednesday seeking to overturn a law banning Internet, telephone and mail order tobacco sales.
The suit by the Association of Responsible Cigarette Sellers, filed in Erie County Supreme Court, contends the 2000 state law violates the Commerce Clause of the U.S. Constitution.
David McNamara, the group's lawyer, said his case was bolstered by last year's U.S. Supreme Court ruling striking down laws in New York and Michigan that banned wine shipments from out-of-state producers. The Constitution prohibits states from passing laws that discriminate against out-of-state businesses.
The group, based in Salamanca near where the Seneca tribe is based, claims the law also violates the Indian Commerce Clause, which gives the federal government the sole right to regulate commerce with Indian tribes. Many Internet sellers are located on tribal reservations in western New York.
In January, Attorney General Eliot Spitzer said Philip Morris USA, the nation's biggest tobacco company, agreed to end shipments of any of its products to customers, Indian tribes and enterprises that states deem illegal, as part of an agreement with attorneys general for 37 states and territories.
The action was the third prong of the states' efforts to curb the sale of cigarettes to minors over the Internet and by mail order. In March 2005, major credit card companies agreed to stop processing payments from Internet retailers. Shippers DHL and UPS Inc. agreed to stop shipping packages from the vendors.
Authorities consider Internet cigarette sales to be illegal because they violate state and federal laws aimed at collecting sales taxes and stopping sales to underage smokers.
The lawsuit seeks to keep Spitzer from enforcing the agreements with the shippers and credit card companies.
Attorney general spokesman Marc Violette said his office had not yet seen the lawsuit and declined to comment.
The 2nd U.S. Circuit Court of Appeals ruled in 2003 against such a challenge to the law, saying the statute treats in-state and out-of-state businesses equally.
Margaret Murphy, a lawyer representing the cigarette vendors, said that decision has "been brought into question" by last year's Supreme Court decision and that her clients are challenging the law on different grounds.
On Tuesday, convenience store operators sued Gov. George Pataki to compel him to enforce a new state law requiring tax collection on tobacco products and gasoline sold to Indian businesses.
The New York Association of Convenience Stores says Pataki's failure to collect taxes on the goods before they reach the reservations, as required under a law that took effect March 1, costs taxpayers $450 million a year and costs businesses $1 billion a year.
Businesses located near reservations say they suffer a competitive disadvantage because they must charge substantially higher prices. A carton of cigarettes bought from a tribe can retail at $15 less than at off-reservation retailers.
Observer Dispatch - May 3, 2006
Convenience stores plan to sue Pataki
Group wants gas, cigarette taxes collected from Indians
ALBANY — A coalition of convenience stores said Tuesday it is suing Gov. George Pataki over his decade-long refusal to collect taxes on tobacco and gasoline sold by American Indian merchants.
Pataki has flouted his constitutional duties by ignoring laws that command the state to collect the taxes, according to the coalition. In doing so, he's "aiding and abetting" an "epidemic" of people skirting the tax laws by going to Indian reservations for smokes or buying cigarettes through the Internet, it said.
"The constitution says the governor shall faithfully carry out all laws," said James Calvin of the New York Association of Convenience Stores. "He doesn't get to pick and choose which laws to enforce."
Verona business owner George Eggen of the Verona Hotel said he doesn't think the state government will enforce the law, even if a lawsuit is brought against the governor.
"The governor is just going to leave it in the hands of somebody else until January," Eggen said. Pataki is not running for re-election in November.
The Oneida Nation in Verona has applied to the Indian Bureau of Federal Affairs for land-in-trust status, which, if granted, means Nation property would not be subject to paying taxes. If successful, that move would legally circumvent the U.S. Supreme Court's February 2005, ruling that the land was subject to local taxes and regulation.
Calvin's group was joined in the lawsuit by two convenience-store chains headquartered near Indian reservations in Central and Western New York: Canastota-based Nice N Easy, which operates about 60 stores, and Amherst-based MWS Enterprises, which runs 40.
Pataki said he won't direct the state Tax Department to collect the taxes this year, instead working to make a deal, or compact, with the tribes.
"I've always said from the beginning the best way to do this is through compacts, by consensus," he said. "We're going to continue to strive to do that."
Besides Pataki, the lawsuit names five cigarette distributors that supply the reservations with untaxed cigarettes, including Frank Colucci Inc. of Niagara Falls.
The long-running tax issue is no small matter: hundreds of millions of dollars are at stake. On the one side are convenience stores that compete with reservation stores and state legislators who view the taxes as a way of helping to pay for the state budget. Joining them are anti-smoking groups that want to see cigarettes made more expensive.
On the other are customers who enjoy cheaper prices and Native American tribes that insist the law would intrude on their sovereignty.
Last year, the state Legislature again passed a law demanding the Pataki administration begin collecting the taxes on March 1 of this year. The state's per-pack tax on cigarettes is $1.50; it charges about 30 cents per gallon of gasoline.
Courts have ruled that states can impose taxes on sales to non-Indians. The state could do so by collecting tax payments from cigarette distributors. Reservation stores would then raise prices, but Native American customers would be eligible for rebates, legislators said.
But Pataki's Tax Department disregarded the March 1 mandate. Legislators considered passing a similar mandate this year, attaching it to the state budget, but in the end decided not to.
Anti-smoking activists have been convinced that Pataki, who is stepping down at the end of the year, will simply ignore the issue the rest of his term.
When Pataki raised the sales-tax issue in 1997, about 1,000 members of the Seneca Nation burned tires and shut down Interstate 90 between Hamburg and Silver Creek south of Buffalo. There was a melee, triggering the arrest of 11 people.
The issue faded away until 2003 when the recession prodded legislators to pass a law demanding the collection of the taxes. They passed similar laws in 2004 and 2005.
Pataki officials have repeatedly said they want to address the issue through "cooperation not confrontation."
They have tried to negotiate "parity" deals in which tribes would voluntarily raise the prices of gas and cigarettes to match what nearby non-Indian stores charge — without paying taxes to the state.
But tentative agreements — sometimes included as part of a way to settle long-standing Indian land-claim lawsuits and open Indian-run casinos -- always have fallen through.
(NJ) Times - May 3, 2006
Smoking break for business owners
Health officials nix the `25-foot rule'
By Tom Hester Sr.
State health officials have killed a controversial proposal that would have extended New Jersey's ban on indoor smoking by prohibiting people from lighting up within 25 feet of restaurants, taverns and other businesses.
The so-called "25-foot rule" would have all but snuffed out plans that restaurants and taverns had to create outdoor patios or decks where customers could smoke.
Strongly opposed by restaurant and tavern owners, the proposed rule was not part of the smoking ban that took effect April 15.
State Health and Senior Services Commissioner Fred Jacobs yesterday said the state instead will ask business owners to set their own outdoor smoking rules, but urged them not to permit smoking near doors, windows or vents that would allow smoke to float into indoor dining or drinking areas.
"We will leave it up to towns and business owners to set up some reasonable approach that is best for them," Jacobs said.
The commissioner said in many cases, the 25-foot distance would end "in the middle of the street or in front of a neighboring business. I do not think that distance works. The legislation did not discuss a buffer zone. It was not put in the law. I thought maybe it was a bit overreaching for us to do."
Asked if Gov. Jon Corzine played a role in putting an end to the 25-foot controversy, Anthony Coley, his spokesman, said "Legislators raised legitimate concerns to Health Department officials. . . . This adjustment is part of the normal give-and-take in the regulatory process."
The change was welcomed by restaurant owners.
"I have spoken to several owners who had started construction on outdoor facilities. That means the money they have spent has not been wasted," said Armando Frallicciardi Jr., co-owner of Lorenzo's Cafe, a Trenton restaurant and bar popular with politicians and commuters.
Frallicciardi said he plans to provide an outdoor smoking area. "It will give me the opportunity to hopefully recoup some of the money I am losing from the ban," he said. "This is definitely a good step and a positive gesture from the state to business owners."
Regina Carlson, director of New Jersey GASP, a Summit-based anti-smoking organization that pushed for the indoor ban, said she had no problem with Jacobs' action. She said there are at least 110 municipal ordinances statewide that ban or set rules for outdoor smoking.
Monmouth County government officials last month banned smoking within 25 feet of 74 county buildings.
Assemblyman Joseph Cryan, D-Union, said lawmakers spoke to Jacobs and health officials after hearing complaints from business people about the proposal. "The commissioner responded. . . . That is part of the process," he said.
Cryan said, however, that he would not want New Jersey's 566 municipalities to set "566 different rules. We know that does not work. Businesspeople are very responsible people. Let them deal with it and they will."
Assemblyman Kevin O'Toole, R-Cedar Grove (Essex), called the proposed 25-foot ban "boneheaded." He said his office was bombarded with complaints.
"I am happy to see someone recognized this was wrong-headed," he said.
Store Decisions - May 1, 2006
New York County Raises Smoking Age
Legal age to light up in Nassau jumps one year to 19.
The Nassau County Legislature unanimously approved an increase in the legal age to buy tobacco products in Nassau from 18 to 19.
However, active members of the armed forces may still buy tobacco if they are 18.
The law takes effect 120 days after County Executive Thomas Suozzi signs it into law -- as he is expected to do early in May.
Store News - April 29, 2006
NY Lawmakers Seek to Halt Tax-Free Cigarette Sales
ALBANY, N.Y.--In an effort to force Indian retailers to halt the sale of tax-free cigarettes, New York legislators are pushing to make it illegal for tobacco manufacturers to do business with wholesalers that don't charge taxes on cigarettes supplied to Indian merchants, reported BuffaloNews.com.
Frustrated by Gov. George E. Pataki's 10-year refusal to collect taxes on cigarettes sold by Indian retailers, lawmakers have introduced a bipartisan measure in the Assembly and State Senate that largely would remove collecting the tax from the hands of the governor and make it more a matter for law enforcement, according to the report.
Targeting large tobacco companies would be an effective and simple way of cutting off the supply of tax-free tobacco products to Indian retailers, reported BuffaloNews.com.
Lawmakers said in the report the state's failure to collect the $1.50 per pack excise tax on reservation sales costs the state $400 million a year.
Officials of the Seneca Nation of Indians maintain that treaties dating back two centuries protect them from taxation.
The legislation was proposed after the state Department of Taxation and Finance refused to start collecting the tobacco tax March 1, as required by a law enacted last year.
All sides seem to believe that Pataki does not intend to collect the tax--and risk another round of violence on reservations like the Senecas, according to the report.
The proposed legislation would end what had been an attempt to target wholesalers--the middlemen in the tobacco distribution chain who purchase cigarettes from manufacturers and sell them to retailers, including Indian-run businesses, reported BuffaloNews.com.
Officials with Philip Morris and RJR, the nation's biggest tobacco companies, said in the report they were reviewing the new bill and would not comment.
James Calvin, executive director of the New York Association of Convenience Stores, said in the report his group is open to what he described as "a creative approach" to ending the stalemate over collecting the taxes.
"It's just unfortunate that something like this needs to be considered when the easiest, most direct, best answer to this situation is for the governor to enforce the existing law," he told BuffaloNews.com.
Journal News - April 24, 2006
Mount Ivy pub owner keeps challenging smoking ban
By Jane Lerner
MOUNT IVY — Frank Watkins sat alone at his bar one recent afternoon, a cup of coffee in one hand and a pack of Vantage cigarettes in the other.
"I never wanted to bring attention to myself or the bar," he said, taking a puff on a cigarette. "But sometimes you just have to stand up for what's right."
Nearly three years after the state banned just about all indoor smoking, compliance with the law in Rockland has been remarkably high, according to health officials.
With one repeated exception: Watkins' Mount Ivy Pub.
Watkins was fined $1,000 last week by the Rockland Board of Health for violating the law by allowing patrons to smoke at his bar — again. He's been fined numerous times since the law went into effect.
Watkins says he'll pay the latest fine. But that doesn't mean he plans to stop fighting the state law.
He has filed a lawsuit in federal court against the county, claiming the law that went into effect in July 2003 violated his civil rights by interfering with his ability to make a living. He is seeking $27.5 million in damages.
The case is pending.
Health officials and restaurant owners across the state are awaiting the outcome.
"This is an evolving area of the law," Assistant County Attorney Thomas Walsh told the Board of Health as it considered the fine against Watkins at its most recent meeting. "The developing case law supports the health department's position on what is the responsibility of the owner."
The county Health Department says the law requires it to fine the owner of any establishment where patrons smoke.
Watkins says the law requires him to post no-smoking signs, which he's done. It also requires him to inform patrons that they are not allowed to light up, which he says he's also done.
The statute instructs owners not to call the police to report smoking.
"So what am I supposed to do when my 110-pound waitress tells a 450-pound Paul Bunyan not to light up and he does it anyway?" said Watkins, a former Marine. "Am I supposed to arrest the guy?"
Watkins appears to have plenty of support, from both his customers and pro-smoking strangers who want to see the law changed.
A letter he received from a man who identified himself as Joe Walker of White Plains thanked him for challenging the law in court. "Here's $5," the letter states. "Have one on me."
Watkins displayed the letter, along with the $5 bill, on the bar's wall next to encouraging notes from other supporters.
"There are a lot of gray areas in this law," said Scott Wexler, executive director of the Empire State Restaurant and Tavern Association, an Albany-based trade group. "We have been looking for clarity. Maybe Mr. Watkins' lawsuit will give us that."
The restaurant association has unsuccessfully challenged the law in court.
The smoking ban has hurt restaurant owners across the state, he said. At least 20 percent of the association's members have gone out of business since 2003, Wexler said. Many other establishments are struggling, he said.
The law's supporters say its benefits are enormous.
"Secondhand smoke is extremely dangerous," said Ann Marwick, director of Pow'r Against Tobacco, an anti-smoking group that coordinates activities in Rockland, Westchester, Putnam and Orange counties. "A burning cigarette is more toxic to the people around it than it is to the person smoking it."
Many people who used to avoid bars and restaurants because of the smoke now frequent them, Marwick said.
"That's a new market for bar and restaurant owners," she said.
Watkins said his business was down. Many regulars who like to smoke now go to other places, such as social clubs, which are exempt from the law.
Rockland residents who wanted to smoke in bars and restaurants used to head over the state line to New Jersey. But earlier this month that state also banned indoor smoking.
Watkins said he would continue to fight the state's ban, regardless of his lawsuit's outcome.
"The day the state of New York bans the sale of cigarettes," he said, "that's the day there will be no more smoking at the Mount Ivy Pub."
Observer-Dispatch - April 17, 2006
Smoking hearing set at Turning Stone
By Elizabeth Cooper
VERONA — Oneida County will go ahead with a hearing on smoking at the Oneida Indian Nation's Turning Stone Resort and Casino.
The hearing originally was scheduled for early March, but the Nation opposed it. Hearing officer Armando Yacco, who declined comment, ruled it must go on, and the hearing is set for Thursday, April 27.
"This is our first attempt to get any enforcement from them," said Ray Bara, attorney for the Oneida County Public Health Department. "Hopefully, it will be successful and set the state for future enforcement there."
The county has cited the Nation for allowing smoking at the resort in violation of the state's Clean Indoor Air Act. The Nation, however, contends it is a sovereign nation, and state regulations do not apply on its properties.
Nation spokesman Mark Emery said he did not yet know whether the Nation would attend the hearing.
"They won't sit down and talk," Emery said of the county. "Namely, they haven't acted on the Nation's request to negotiate, even though Oneida County gives out more waivers than any other county in the state."
In a past interview, interim county Public Health Director Nicholas DeRosa said any criteria for a smoking compact would be the same as that for any restaurant or tavern seeking a waiver from the law.
The Oneidas have resisted the enforcement of any local or state regulations on their land. In 2005, the U.S. Supreme Court ruled the Nation's non-reservation land was subject to local and state taxes and regulations, but soon after that, the Nation applied to have its land put into federal trust, a move which if successful would effectively circumvent the high court's decision.
If the Nation is fined under the smoking law, Bara said he expects an appeal.
"I don't expect that this necessarily would be the end," he said. "This is a long-running issue that has been before much higher courts than the local health department."
One local resident said he believed the Oneidas should follow the same laws as everyone else.
"I haven't got anything against the Indians," said Ken Ferris of Camden, "but I feel they are misusing what they've got."
Still, he thought the dispute over whether the Oneidas have to follow local regulations could go on for a long time.
"They've got the money," he said. "They can fight it forever and ever."
Star Ledger - April 14, 2006
Judge stubs out 11th-hour attempt to block ban
By Robert Schwaneberg and Tom Hester
NJ - A last-ditch effort to halt the start of the controversial indoor smoking ban was doused yesterday when a federal judge ruled the law can go into effect as scheduled.
The decision means it will be illegal for anyone to light up in a public place after midnight tonight.
But state health officials disavowed any intention to immediately prohibit smoking within 25 feet of buildings where it is banned. They said the 25-foot buffer zone, announced Wednesday, is still just a proposal.
U.S. District Court Judge Stanley Chesler rejected arguments by a coalition of bar, restaurant and bowling alley owners that the law violates their constitutional rights by banning smoking in their establishments while permitting it on casino gambling floors.
Ruling from the bench in Trenton after hearing arguments for 30 minutes, Chesler said the Hospitality Coalition for Fairness could not prove lawmakers lacked "a rational basis" for exempting gaming areas of Atlantic City's 13 casinos from the smoking ban.
"The record suggests a concern that casinos would be especially vulnerable to economic damage from a smoking ban while ordinary restaurants and bars would not be," Chesler said. He added that lawmakers could draw such distinctions on the basis of "rational speculation" and it was not his role, as a judge, to second-guess them.
While the coalition lost its court bid to block the new law from taking effect, it appeared to advance its larger goal of having smoking banned in all establishments open to the public.
Senate President Richard Codey (D-Essex) predicted the ban would be extended to cover casinos within two years, while Gov. Jon Corzine said there is "no real logical excuse" not to.
There already is legislation introduced in both houses to have the ban extended to the casino gaming areas.
"The burden of proof is on those who say we should not expand it," Corzine said. He said he wants more analysis of whether going smoke-free would cost casinos customers and jobs, adding that it might give them a competitive edge.
The ruling delighted anti-smoking activists while disappointing bar and restaurant owners who fear the ban will hurt business.
"This is a crazy law, stupid law," said Jose Pestana, owner of the ZePe's Cafe-Bar in Newark. "This is a bar; those who come in here want to enjoy a beer, enjoy their smoke. They don't care if you smoke or don't smoke."
And when the clock strikes midnight tonight, Pestana said that won't change, not at least until he's told otherwise.
"For me, everyone can still smoke tomorrow," he said. "I have read the news, but I haven't gotten anything yet from the state that the law starts."
Cathy Burke, co-owner of the Irish Pub in Atlantic City, said it is already difficult competing with casinos that are "within a two-minute walk" and offer free drinks, meals and rooms to gamblers.
"Now with the smoking monopoly the casinos have, we have quite a challenge ahead of us," Burke said. "I'm very disappointed."
Regina Carlson, who as executive director of the New Jersey Group Against Smoking Pollution has been campaigning against tobacco since 1974, was "delighted."
"I see this as a great step forward," Carlson said. She agreed the smoking ban should cover casinos and predicted that in time, it will.
"What we've seen around the nation is this is done step by step," Carlson said. "I am confident we will get the casinos smoke-free."
West Orange lawyer Robert Gluck, who argued the case for the bar and restaurant owners, told the judge, "We would accept the ban as long as it applied across the board." He said casinos were "exempted for political reasons only."
Deputy Attorney General Melissa Raska countered that lawmakers can address the threat of second-hand smoke one step at a time without having to solve "all aspects of a problem or none at all."
Some sponsors of the smoking ban had wanted to include casinos but concluded such a bill would not pass.
State Health Commissioner Fred Jacobs called the smoking ban "one of the most significant public health measures in our state's history." Legal papers filed by Attorney General Zulima Farber blamed second-hand smoke for contributing to 3,000 lung cancer deaths each year among nonsmokers nationwide.
The law was signed in January by Codey, who was then governor, and bans smoking in virtually all indoor places other than private homes. It covers church bingo and fraternal club halls, enclosed shopping malls, firehouse bars, enclosed workplaces, banquet halls, bowling alleys and more than 23,000 bars and restaurants.
The only exemptions are for cigar bars, smoking areas in certain retail tobacco establishments and gambling areas of casinos. Hotels may permit smoking in up to 20 percent of their rooms.
On Wednesday, Jacobs released 77 pages of proposed regulations that included the 25-foot buffer zone. Gretchen Maichael, a spokeswoman for the health department, said yesterday the buffer zone will be enforced only if it is included in the final version of proposed regulations expected to be adopted in September. She said there will be a public hearing before that happens.
In the meantime, Armando Frallicciardi Jr., co-owner of Lorenzo's Cafe in Trenton and a board member of the New Jersey Restaurant Association, said he has been telling restaurant and bar owners to delay any plans to build outside decks or patios for smokers.
"I tell them: 'Do not do a thing until the regulations are finalized,'" Frallicciardi said.
Paramus Health Officer John Hooper said smokers who light up in violation of the ban face an initial fine of $250 and double that for a second offense. He predicted most people will comply voluntarily.
"In a short period of time, people will be as unlikely to smoke in a restaurant or bar as they are on an airplane," Hooper said.
Deborah Kole of the New Jersey State League of Municipalities' information bureau said that has been the experience in other states that have banned indoor smoking.
"There is a lot of peer pressure," Kole said.
Newsday - April 12, 2006
Nineteen in Nassau
County is poised to raise tobacco age
Nassau County seems finally to be on the road to further curbing teenage access to cigarettes. Democratic legislators have voted out of committee a bill that would raise the legal age to buy tobacco products from 18 to 19. The full legislature should enact it into law at its next meeting, scheduled for later this month.
Efforts to make Long Island the first region in the state to take a more aggressive approach to keeping cigarettes out of the hands of young people began more than a year ago. Suffolk County approved the measure, while Nassau's fell victim to a dissenter in the Democratic caucus. The bill's chief supporters, Jeff Toback (D-Oceanside) and Diane Yatauro (D-Glen Cove), kept at it, however, and now the Democratic majority is on board. Republicans are saying they might vote with them if language in the bill regarding penalties and procedures for vendors is clarified. County Executive Tom Suozzi said he will sign the measure.
Just as raising the drinking age had a big impact on saving lives, so does raising the smoking age. One year really does make a difference - evidence shows that 18-year-old high school seniors are often asked by their younger classmates to buy a pack for them. Now older teens can deflect the pressure by saying they aren't old enough, either.
Most importantly, a unified Long Island position on Tobacco 19 might finally light a fire under legislators in Albany, where a similar statewide measure has been stalled. This objective is too important to go up in smoke.
Press - April 9, 2006
Smokers avoid tax increase, but face more lectures, help
By Michael Gormley
ALBANY, N.Y. -- New York smokers dodged a bullet in the Legislature's state budget, but they might not get much peace.
The Legislature's new budget eliminates Gov. George Pataki's proposed $1 per pack increase in the state cigarette tax, but doubled to $85 million funding for anti-smoking campaigns and nicotine patches for those seeking to quit.
"We think there will be 1 million fewer smokers in 2010" because of the enhanced anti-smoking program, said Russell Sciandra, director of the Center for a Tobacco Free New York. He said the education and outreach elements should help 900,000 smokers quit and 100,000 fewer youths start smoking.
"It's probably tripling of the amount of advertising that you see," Sciandra said "The money they had (in 2005-06) was sort of providing money for infrastructure, so they didn't have enough to do the advertising. Now we have the infrastructure base to build on."
The outreach programs include distributing free nicotine patches and a toll-free hot line to help smokers quit as well as regional programs. Sciandra said such efforts account for a 20 percent decline in smoking by adults in the last three or four years, after little change in the 10 or 15 years before
"The program has gotten a lot better over the last two years," said Assemblyman Pete Grannis, a leader in anti-smoking legislation. "There was money left unspent before. It's much more effective with much more outreach."
"It justifies their holding onto their funding and keeping their jobs to nag people some more," said Audrey Silk of New York City Citizens Lobbying Against Smoker Harassment. She said, contrary to state Health Department numbers, that there are more smokers despite the anti-smoking ads. She the Health Department "is doing a better job advertising tobacco than tobacco companies ever did."
The state Health Department's statistics show a different trend. They show smokers accounted for 23.3 percent of adult New Yorkers in 1996 and 22.3 percent in 2002, after a low of 21.6 percent in 2000.
Grannis said Pataki may yet try to save his cigarette tax increase in budget vetoes expected this week. But he noted that Senate Majority Leader Joseph Bruno is still opposing any tax increase, so Grannis thinks the cigarette tax increase may be dead, too.
"We were thrilled overall, that Bruno struck to his promises and his principals that any tax is a tax and decided not to punish smokers one more time," Silk said.
Observer Dispatch - April 2, 2006
State: Start evening anti-smoking inspections
The state Health Department has told Oneida and other counties they should begin nighttime inspections to enforce the Clean Indoor Air Act, better known as the smoking ban.
But, Oneida County doesn’t yet have regular after-hours inspections in place, interim Public Health Director Nicholas DeRosa said.
“We’ve had ongoing discussions with Oneida County, and we have made it clear that we expect them to closely monitor those businesses that have shown a history of violations,” said state Health Department spokeswoman Kim Volean. “We expect them to include off-hour inspections.”
And, she said, her department thinks Oneida County had already begun those inspections.
But DeRosa said the county is not doing after-hours inspections regularly.
“We have not yet started night inspections, but we’re looking at it,” DeRosa said.
Country Today - March 24, 2006
Cigarette tax issue smolders in New York State
By Jim Adams
MASTIC, N.Y. - The taxation of reservation sales of cigarettes is burning hotter than ever as a New York state political issue, weeks after Republican Gov. George Pataki tried to stub it out until after he left office.
Democratic State Attorney General Eliot Spitzer, a leading candidate to succeed Pataki in this year's elections, seems determined to keep it alive, with the help of assorted allies. Spitzer is calling for enforcement of the state Legislature's budget mandate to collect the tax as of March 1. Pataki vetoed an earlier version of the legislation two years ago and called for a one-year extension of the deadline in his budget message in February.
But state tribes have encountered increasing pressure from several directions. Responding to statements from Spitzer, the main cigarette distributor to the Seneca reservations temporarily suspended deliveries. (They resumed after the State Department of Finance and Taxation provided the distributor with a protective letter.) Spitzer enlisted the senior U.S. senator from New York, Charles Schumer, a Democrat, to introduce a bill prohibiting the U.S. Postal Service from delivering cigarettes purchased over the Internet, a major business for Seneca Nation entrepreneurs. And on March 20, the New York supermarket chain Gristede's Foods Inc. threatened to sue the two state-recognized Indian nations on Long Island and their senior tribal officials for undercutting its own cigarette sales.
Chief Harry Wallace of the Unkechaug Indian Nation, a main target of the suit, promised a vigorous counterattack. ''We are exploring all possible responses to this suit, including an aggressive countersuit for these outrageous claims by this multi-billion-dollar corporation,'' he told Indian Country Today.
Gristede's released a draft of its complaint to New York metropolitan newspapers several days before it was filed in the U.S. District Court in Brooklyn.
The draft complaint alleged: ''The illegal trade in these discounted Indian-sold cigarettes has spawned, with the defendants' knowledge and active participation, a thriving black market of discount cigarettes that funds gangs, organized crime and international terrorist groups such as Hezbollah, and which promotes juvenile and teen smoking.'' It supported the charge with several out-of-context quotes from a recent New York Times series on smuggling through reservations, which was widely criticized in Indian country. The quote, among other things, said that Indians were building ''their own violent Mafia-like enterprises.''
The complaint listed the U.S. civil Racketeering Influenced and Corrupt Organizations conspiracy statute as its federal cause of action. It specifically named the Unkechaug Nation, which is based on the Poospatuck Reservation in Mastic; Wallace; and the nation's main enterprise, the Poospatuck Smoke Shop and Trading Post. It also named the Shinnecock Indian Nation in Southampton; three past and present tribal leaders; and Shinnecock Ltd., a tribally affiliated business that sells cigarettes.
In a significant ploy, it also included 100 John Does as defendants, explaining that these presently unknown parties were ''smoke shops, individuals and businesses that sell cigarettes in New York to non-Indians, who are not authorized resellers, without charging State and local excise and sales.'' This wide net, according to the complaint, included sales both on and off Indian lands. Gristede's said it would amend the complaint ''to allege their true names and capacities when ascertained.''
The presence of this open-ended list of John Doe defendants allowed Gristede's to tar the named defendants with allegations of every form of ''black market'' illegality, such as counterfeiting cigarette tax stamps and funding ''organized gang activity, organized crime and international terrorism.'' These allegations referred ambiguously to ''the defendants'' without specifying whether they were the named or fictitious ones.
Wallace denounced the complaint as ''slanderous'' and questioned whether it would go anywhere in court. He said that tribal sovereign immunity was ''absolutely'' a defense. He also detected the hidden hand of Spitzer behind the well-publicized release of the draft.
Gristede's Foods is a unit of the Red Apple Group, which owns several chains of supermarkets and convenience stores as well as a subsidiary, United Refining, which distributes fuel to gasoline stations throughout New York state. Its president, John Catsimatides, is a major Democratic Party contributor with an intricate relationship with Spitzer.
Spitzer was openly a factor in the week-long interruption of cigarette deliveries to Seneca Nation retailers. The wholesaler, Milhelm Attea & Bros. Inc., cited uncertainty over its immunity from liability for state sales tax collection. The state system relies on wholesale ''stamping agents'' to affix tax stamps to cigarette packs before they are shipped to retailers. The law exempts transactions the state is constitutionally barred from taxing, such as reservation sales to Indians.
The Attea company, a registered Indian trader and the major supplier to Seneca businesses, was the defendant in the 1994 U.S. Department of Taxation & Finance of New York v. Milhelm Attea & Bros. Supreme Court case, which upheld the state tax department's plan to collect taxes on reservation sales to non-Indians.
The state tax department resolved the crisis within days by issuing a letter protecting Attea from prosecution, but Indian-owned retailers on Seneca territory had nearly exhausted their stocks and were rationing sales to customers. The suspension, said Wallace, was a ''wake-up call'' to Seneca leaders.
Seneca President Barry Snyder Jr. issued a statement March 15 promising steps to develop a ''Nation-protected wholesale supply.''
''In recent days, it has become obvious that the Nation must do more to protect its economy,'' Snyder said. ''We have relied on the good word of Governor Pataki that our treaties and sovereignty would be respected and that the Nation's economy would not be harmed. But the actions of Attorney General Spitzer to threaten and intimidate wholesalers is interfering with official State policy.
''We are left with no choice but to develop a protected source of tobacco products to ensure that the Nation and its people are not denied the ability to consume and trade these products on our territory. We will work in partnership with our business community to develop the business and regulatory approach necessary to ensure that our treaty-protected right to the 'free use and enjoyment' of our lands is secured.''
Although Snyder did not spell out a strategy, federal courts have held that items with value added through on-reservation processing are not subject to state wholesale taxation. The manufacture of cigarettes has emerged as a booming reservation business. Snyder's statement was his second within a week in response to Spitzer's actions. On March 10, he denounced Spitzer and Schumer for sponsoring a bill to keep tobacco products from being shipped via the U.S. mail. Spitzer had earlier pressured private delivery services to stop shipping cigarettes from Seneca Nation suppliers.
''That Attorney General Spitzer and Senator Schumer would call Senecas who sell cigarettes as being part of a 'massive criminal enterprise' is to malign the entire Seneca Nation and its people,'' said Snyder.
''Despite the Attorney General's misrepresentations, selling tobacco products in Seneca nation territory does not violate any law.
''On behalf of the Seneca people, I believe that Attorney General Spitzer and Senator Schumer owe us an apology for their inappropriate and disrespectful attack on our good name.''
Sun - March 22, 2006
Council Wants Indian Tribes To Pay State Cigarette Taxes
By Russell Berman
The City Council is weighing in on the side of business owners in a dispute over a new state law that requires the collection of taxes from Indian tribes that sell cigarettes.
The chairman of the council's Finance Committee, David Weprin, said yesterday that he would hold hearings this spring on a resolution calling on the state to enforce the law, which took effect March 1. The state Department of Taxation and Finance said late last week it will not enforce the law, which requires wholesalers to collect taxes up front from Indian businesses that have historically sold cigarettes duty-free.
"I think it's outrageous that the governor is not enforcing the law," Mr. Weprin said. A hearing on the resolution, introduced earlier this month, will be held after the council finishes its negotiations over the city budget, he said.
City business owners contend the sale of tax-free cigarettes by Indian tribes fosters a black market. Alleging racketeering, the supermarket chain Gristede's filed suit against two Long Island tribes on Monday. The issue is pitting Governor Pataki against the state attorney general, Eliot Spitzer, who is running for governor. While a spokesman for Mr. Pataki says the governor prefers to resolve the dispute with Indian tribes "through cooperation instead of confrontation," Mr. Spitzer has said the law should be enforced. The governor's spokesman, Kevin Quinn, said yesterday that courts have given enforcement jurisdiction to the Department of Taxation and Finance, not the attorney general. A spokesman for Mr. Spitzer, Marc Violette, declined to comment.
By ignoring the new law and continuing negotiations with the Indian tribes on the issue of cigarette taxes, the state is seeking to avoid a repeat of the massive demonstrations that followed the state's last attempt to collect taxes from the tribes, in 1997, an administration official, speaking on the condition of anonymity, said yesterday.
The strategy drew criticism yesterday. "I don't believe it's appropriate to succumb to that," the sponsor of the council resolution, Lewis Fidler of Brooklyn, said. "I don't believe you negotiate the enforcement of a statute when it's legal and on the books."
Falls Reporter - March 21, 2006
STATE'S LATEST SALES-TAX GRAB JEOPARDIZES REZ BUSINESSES
Analysis By David Staba
Last Thursday afternoon, Randy Chrysler looked around his property on Upper Mountain Road on the Tuscarora Reservation and described the small empire that tax-free cigarette sales built.
There's the bottled-water business run by his brother Roger. Another brother, Joe, runs a sneaker shop. And cars line up to buy gas as he talks.
"The smoke shop covered the payroll while they were getting started," Randy Chrysler said. "I employ 30 people here. They have wives and kids."
All that, along with the dozen or so other stores selling tax-free tobacco, gasoline and other products on the Tuscarora Reservation hung in the balance for several tense days last week, after a Buffalo tobacco wholesaler notified owners that it would stop delivering unstamped cigarettes.
Milhem Attea and Bros., the largest supplier to the reservation stores, pointed to statements by state Attorney General Eliot Spitzer and his spokesman that warned of fines and even license revocations for anyone who provided the unstamped smokes.
Shelves emptied quickly at Randy's Smoke Shop and most other stores. Piles of tires and wood pallets piled up near many shops on the Tuscarora and Seneca nations, a not-so-subtle warning of civil unrest to come.
After three days of rising tensions, New York Gov. Pataki's office and the state Department of Taxation and Finance announced that wholesalers could start shipping again, without fear of punishment, while negotiations with the state Legislature continued.
Spitzer's stance and an Assembly budget bill threatened reversal of an Albany charade that's been going on for more than a decade.
Each year, the state Legislature includes language in the budget legislation that says, in effect, "OK, this year we're really going to start collecting sales tax from stores on the reservations."
Then Pataki says, "Yes, we will. Next year."
And almost everybody is happy. Legislators keep collecting contributions from the group representing convenience-store owners, the reservation shops stay in business and Pataki doesn't have to play the heavy.
The last time he tried on that role, in 1997, tire fires burned at reservations throughout Western New York, with protesters clogging the New York State Thruway where it passes through the Seneca Nation, forcing its closure.
A Pataki administration source pointed to the financial impact of a rerun. Aside from an estimated $5 million per week for State Troopers needed to keep roadways clear, traffic interruption would muffle interstate commerce and possibly hamper homeland security efforts.
The Senecas brandish an additional hammer since the last sales-tax standoff -- casinos in Niagara Falls and Salamanca that generate millions for Albany annually (even if none of it seems to be finding its way back to Niagara Falls).
Surveys have consistently shown an overwhelming majority of New Yorkers oppose taxing the reservation stores. A Zogby poll earlier this month showed 79 percent supported the governor's non-enforcement policy.
Those numbers make the stance taken by Spitzer, the front-runner to succeed Pataki, particularly curious.
About the only people unhappy with the status quo are the non-reservation convenience store owners, who cite figures purporting to show how much revenue New York state is supposedly "losing" via non-enforcement.
Their figures, though, ignore the fact that almost half of reservation sales are made to non-New Yorkers. Many smokers would also switch to cheaper cigarettes if the discounted reservation cigarettes became unavailable, further cutting into the estimated windfall.
Then there's the question of whether you can really lose something you never had to begin with.
To Chrysler, the dizzying conflict of numbers is beside the point. Attempting to collect taxes from the shops now, reversing a policy that's been in place for decades, would decimate a system that's created almost all the viable businesses on the Tuscarora and other reservations.
"For us, this isn't about gas and cigarettes -- this is about sovereignty," said Chrysler, who is 41 and has run his store for 16 years. "It's about giving our people opportunities like every other race has -- the opportunity to support a family, to be a working mother or father."
Chrysler employs 30 people. After Attea notified him on Tuesday that it wouldn't be shipping any more cigarettes, he started laying off workers, about a dozen in all, many of them relatives.
"To have to lay off your cousins ..." Chrysler said, his voice trailing off. "This is a good business. We pay our bills. Now we have to lay them off because they won't deliver to an Indian nation. The toughest thing was to have to tell my mom's nieces who have kids, 'You've got no job.'"
Chrysler, who is also one of the top drivers at Ransomville Speedway, said he's worked to make an impact in the community beyond the reservation as well.
Like many reservation stores, Randy's Smoke Shop sponsors youth sports teams and is one of the first stops for anyone raising money for just about any charitable cause.
"The press always comes out here when there's trouble," Chrysler said. "But look at everything else we do. The volunteer fire departments can't go to NOCO and ask for money."
Asked when the pile of rubber and wood across Upper Mountain Road might catch fire, Chrysler smiled and shrugged.
"Whenever I get cold," he said.
A day later, on Friday, Attea announced it would resume shipping, but to Chrysler and most other Indian merchants, there's a big difference between a delay and a resolution.
It got pretty cold Friday night, and several hundred Tuscaroras attended the bonfire on Upper Mountain Road.
"It doesn't change anything for us," Chrysler said when asked about the state's announced non-action on Friday. "We're still on pins and needles around here."
Newsday - March 21, 2006
Supermarket sues tribes over untaxed smokes
By Keiko Morris
A New York City supermarket chain filed a lawsuit in Brooklyn federal court yesterday claiming that two Long Island Indian nations and senior tribal officials have been illegally selling untaxed cigarettes to non-Indians, helping to create a thriving black market.
Gristedes said in its lawsuit that it lost more than $20 million because smoke shops on the Unkechaug and Shinnecock reservations sold untaxed cigarettes at reduced prices, undercutting sales of non-Indian businesses in the metropolitan area. The suit described the smoke shops as black market suppliers "through their knowing and intentional complicity," funding gangs, organized crime and international terrorists such as Hezbollah.
"The disparity is huge, it's enormous, $3 a pack and counting," said Gerald McKelvey, a Gristedes spokesman. "It [the lawsuit] is nothing more than trying to attain some equity here, level the playing field. It is not anti-Indian."
The state places a $1.50 tax on every pack of 20 cigarettes in addition to taxes imposed by local municipalities, the suit notes. New York City has a $1.50 tax on a pack. Cigarette sales to American Indian customers are exempt from taxes, but state law requires taxes to be collected on sales to non-Indian customers -- a law the tribes view as encroaching on their sovereignty.
Richard Lipsky, who represents the New York City-based Neighborhood Retail Alliance, said these state regulations have been unenforced. "The state has passed the law and the refusal of the governor to enforce the law does not mean you can operate without impunity like the tribes have been doing," Lipsky said.
But defendants Harry Wallace, Unkechaug chief and smoke shop owner, and Lance Gumbs, a former Shinnecock chairman and smoke shop owner, see the suit as a campaign aimed at "demonizing" two small communities.
Since December, the Suffolk County district attorney's office has cracked down on cigarette sales on reservations to non-Indian customers. A new law dictating how the state was to collect taxes from reservation sales to non-Indians was supposed to go into effect March 1. But the state commissioner of the Department of Taxation and Finance has delayed imposing the policy.
Wallace and Gumbs called the claims unfounded and politically motivated and said the suit disregarded the rights of their tribes, which are recognized by the state. Both objected to accusations that the shops fund terrorism and organized crime.
"It seems to be the rule of the day," Wallace said. "You want someone to get upset at someone, say they support terrorist activity. But all we are engaged in is the normal, lawful course of doing business."
But William Wachtel, the Gristedes lawyer, said he doubts a significant portion of the benefits from reservation cigarette sails are benefitting tribal members. "Let them open their books and if we're wrong, we'll be surprised but we will publicly apologize," Wachtel said.
York Law Journal - March 20, 2006
Judge Dismisses New York's Suit Against Internet Cigarette Sellers
By Mark Hamblett
New York City's attempt to sue Internet cigarette sellers for lost tax revenue under a racketeering theory has been dismissed by a federal judge for the second time.
Southern District Judge Deborah Batts dismissed the amended complaint filed in City of New York v. Nexicon, 03 CV 383, finding that the city had once again failed to meet the standard for pleading a racketeering enterprise.
The case is one of five that the corporation counsel has brought against Internet cigarette sellers it claimed have been avoiding taxes and failing to file tax reports on the number of sales they make to New York residents. It is considered a template for the other four cases -- an important part of the city's effort to recoup as much as $100 million in lost state and city tax revenues each year.
Eric Proshansky, deputy chief of the law department's affirmative division, said Thursday the city will appeal to the 2nd U.S. Circuit Court of Appeals.
The city sued under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §1961 et seq., seeking compensatory damages as well as injunctive relief. It wanted to recover three times the amount of tax revenue lost under the alleged tax-avoidance scheme.
The city tried to break new ground by alleging that the failure to file so-called Jenkins Act reports with New York state on the volume of cigarette sales in New York constitutes the predicate acts of mail and wire fraud needed to make a case under RICO.
But in her decision on motions to dismiss in January 2005, Batts was skeptical about the city's "novel theory."
The Jenkins Act, she said, was a criminal act to be used by the federal government against tobacco companies to prevent state tax avoidance going forward through injunctions and, retrospectively, through criminal penalties.
Batts said it was doubtful the Jenkins Act even applied in civil cases and it was "extremely unlikely" that any party other than the federal government may sue under the act.
She also undercut the case by ruling the city failed to meet the standard for "distinctiveness" under RICO, in that it had not shown there was any difference between the employees of the Internet sales companies named in the suit and the companies themselves.
Nonetheless, she gave the city leave to replead.
But in this week's decision, Batts said the city again failed on a key element of the statute -- that "the enterprise as alleged must be distinct from the person conducting the affairs of the enterprise."
Under 2nd Circuit case law, she said, "a plaintiff may not allege 'a RICO enterprise that consists merely of a corporate defendant associated with its own employees or agents carrying on the regular affairs of the defendant.' Riverwood Chappaqua Corp. v. Marine Midland Bank, N.A., 30 F.3d 339 (2d Cir. 1994)."
The city claimed that it had met the standard for distinctiveness.
Judge Batts disagreed. The language of the Jenkins Act, she said, forbids "persons" from transporting cigarettes for profit in interstate commerce," and a person includes "corporations, companies, associations, firms ... as well as individuals."
Batts said "it is clear that companies are the primary entities responsible for filing Jenkins Act reports."
"The catch-all phrase 'as well as individuals' suggests a separate class of people who may be liable under the Jenkins Act, but does not by any means connote officers or directors of the business entities listed before the phrase," she said. "Accordingly, as only the defendant companies are responsible for filing the reports, and only they can be accused of fraudulently concealing such reports by not filing them, only the defendant companies may be considered as having committed predicate acts."
Proshansky was joined by Assistant Corporation Counsels Toby Butterfield and James Altman in representing the city.
James L. Bikoff of Silverberg Goldman & Bikoff, in Washington, D.C., was lead counsel for the cigarette sellers.
Sun - March 20, 2006
Gristede's To Sue Indian Tribes Over Unenforced Cigarette Law
By Russell Berman
In a play for Albany's attention, the Gristede's supermarket chain is filing suit today against two Long Island Indian tribes that do not collect taxes on cigarettes, claiming their practices foster a black market that costs the company millions of dollars in profits.
The claim opens a new front in the long-running battle among state officials, retail stores, and Indian tribes over a cigarette tax law that's on the books but which the Pataki administration says it will not enforce. The law, requiring wholesalers to collect taxes on cigarettes sold to Indian tribes, took effect March 1. The state Department of Taxation and Finance has said it is premature to enforce the law - a policy denounced by the state attorney general, Eliot Spitzer, who is running for the Democratic gubernatorial nomination.
Gristede's is seeking more than $60 million in damages from the Unkechaug and Shinnecock nations. Lawyers for the chain said the suit was an effort to pressure the state to crack down on the Indian tribes. "Our hope is that in the next month or two, we're going to get the enforcement from the state that we all think is warranted," attorney William Wachtel said.
Mr. Wachtel would not rule out future action against the state itself and said Gristede's was going after the Unkechaug and Shinnecock nations because they are not federally recognized tribes, unlike major upstate tribes that also sell tax-free cigarettes.
The chief of the Unkechaug Nation, Harry Wallace, blasted the lawsuit, saying it was an assault on the sovereignty of the tribe and an attempt by a private corporation to "do the political bidding of the attorney general and interfere with lawful trade of the Unkechaug Nation."
He added: "They think we are the weak link in the chain, and they are going to be surprised. With ever fiber of my being, I will fight this lawsuit."
While the state stands to gain hundreds of millions of dollars in revenue from the cigarette duties, Indian tribes have long opposed taxation efforts as a violation of their sovereign status. In 1994, the U.S. Supreme Court ruled that the state could tax sales of cigarettes to non-Indians, a distinction Mr. Wallace said was impractical. "That's charging people based on ethnic identity, and I refuse to do that," he said.
Mr. Wallace said the Unkechaug Nation has been in ongoing talks with the governor's office about creating specific pricing systems to settle the dispute.
Buffalo News - March 19, 2006
Indians see tax battle with Spitzer
By Lou Michel and Bill Michelmore
A resumption of cigarette deliveries to Native American smoke shops does not mean business as usual so long as State Attorney General Eliot Spitzer remains a candidate for governor.
Seneca leaders and a Tuscarora businessman predict they are headed for a confrontation with Spitzer, who has strongly advocated collecting cigarette taxes on the reservations at the direction of the State Legislature.
"It ain't over yet with Spitzer. He's brought us together," said Cyrus M. Schindler Jr., a tribal councilor and member of a Seneca committee studying ways to thwart the state's recent effort to collect taxes on Indian-sold tobacco.
Joseph "Smokin' Joe" Anderson, a smoke shop owner on the Tuscarora Reservation in Niagara County, said his lawyers are working the tax issue. "This is what I say to the government: Don't step on our rights," Anderson said. "They've burned us out and put us on reservations. We came up with ways to manufacture and sell goods, and now they want to take that away from us. It's not going to happen."
Many Seneca leaders remain angry with Spitzer's statement earlier last week, describing nation retailers shipping cigarettes over the Internet as a "massive criminal enterprise."
Some say they are looking at ways to spend as much as $5 million to make their anti-tax case to the public during the gubernatorial campaign in the hopes of damaging Spitzer's chance at election.
One way to raise that money might be to raise the price of a carton of cigarettes and use that extra money for an anti-Spitzer campaign fund.
The state Tax Department on Friday appeared to back down from a law that passed both the Senate and Assembly, requiring state taxes be charged on cigarettes sold from the reservation. The Tax Department notified a major wholesaler of cigarettes that it could ignore the law, and tobacco shipments resumed Friday.
Seneca businessmen and leaders aren't certain that the conflict is over, though, and they are discussing other strategies. One is the possibility of the Seneca Nation buying cigarettes directly from tobacco manufacturers, said Anna Ward, who runs Big Indian, one of the Senecas' largest retail operations.
"That would strengthen our commerce," said Ward, Schindler's daughter. "The Seneca Nation might also deal with other Indian nations that have direct relationships with cigarette manufacturers."
Schindler, who negotiated a casino compact with Republican Gov. George E. Pataki, described Spitzer's efforts to collect taxes from American Indians as a "bullying tactic" that goes against a promise made by Pataki when he agreed to allow Indian-run casinos in New York State.
"When we were negotiating the [casino] compact, Pataki said we were sovereign and he wouldn't collect taxes from us," Schindler said, adding that treaties between the tribe and the federal government protect the nation from taxes.
The U.S. Supreme Court, however, ruled in 1994 that the state could collect taxes on sales of cigarettes to non-Indians.
Native Americans on the Tuscarora Reservation, though, still feel the tax issue is one of sovereignty. "How are they going to enforce that?" Anderson asked. "Are non-Indians going to have stars on their foreheads? This is not about taxes or politics, it's about human rights."
Billie Twogun, who lives on Tuscarora land, said it reminds him of the Deep South in the 1950s. "They want us to have a native price and a white-boy price," he said.
Jim Printup, who works at Jay's Place, an Indian smoke shop on Walmore Road on the Tuscarora Reservation, also expressed resentment at the effort to collect the taxes on the reservation. "How can you tax another nation?" he said. "This is never going to fly."
"We plan to be in the tobacco business for another 100 years," said Anderson, who owns cigarette, gasoline, gift shop and food market complexes on the reservation.
Schindler hinted he and other Senecas are not afraid to return to the tactics of the 1990s, when angry Senecas and their supporters closed down the New York State Thruway with massive protests and fires in response to the state's effort to collect taxes.
Press - March 18, 2006
Tax officials' advice eases tension over Indian cigarette sales
BUFFALO, N.Y. -- The state Department of Taxation and Finance has advised a Buffalo cigarette wholesaler it can ignore a new law requiring tax collection on tobacco products sold to Seneca Nation and other Indian businesses.
That eased tensions on Indian reservations in western New York where nervous suppliers cut off shipments to smoke shops earlier in the week. Indians accuse the state of ignoring their sovereignty. In 1997, the last time the state tried to collect the tobacco taxes, confrontations between Senecas and state police closed a section of the Thruway.
By noon Friday, supplier Milhem Attea & Bros. resumed shipping cigarettes to Seneca smoke shops, spokeswoman Rosemary Saffire said. "We have it in writing, so we can take it to a judge and say, "Look, we have permission,"' she said.
In the letter, the Tax Department said it had a "long-standing policy of allowing untaxed cigarettes" to be sold to Indian retailers. The agency noted Gov. George Pataki had proposed changing the law that kicked in March 1.
One idea was to delay implementation. The State Senate and Assembly earlier this week rejected that.
State Attorney General Eliot Spitzer has warned wholesalers that, no matter what the Tax Department claims, the cigarette tax collection law is in effect. His aides have said wholesalers who ship untaxed cigarettes to Indian retailers face possible prosecution.
Spitzer said Friday during a stop in Buffalo, "You can't announce to the world that a law will simply be ignored and not enforced." He said he would talk to the Pataki administration and that he would "act in a very measured, careful manner, hopefully in conjunction with the executive" branch.
Joseph Crangle, counsel to the Senecas, said the Tax Department disagrees with Spitzer, "and they're the ones in charge of saying what the state tax law is, not the attorney general." Richard E. Nephew, chief executive officer of the Seneca Nation, said the Tax Department letter "sounds like probably a temporary fix."
The Senecas have long maintained that 19th century treaties protect them from the state taxing the nation's products. The U.S. Supreme Court, however, ruled in 1994 that the state could collect taxes on sales to non-Indians.
On the Cattaraugus Reservation, where dozens of smoke shops are located near the Thruway, several shop owners and workers said they were optimistic.
On the Tuscarora Reservation, residents gathered by a bonfire Friday night near Randy's Smoke Shop with signs urging passing motorists to support treaties.
Inquirer - March 17, 2006
Corzine considers calling for a higher cigarette tax
Already second-highest in the nation, it would rise from $2.40 to $3 under a possible budget proposal.
By Kaitlin Gurney
TRENTON - Gov. Corzine said yesterday that he might propose an increase in New Jersey's cigarette tax for the fourth time in five years.
The tax, already the second-highest in the nation, would rise from $2.40 to $3, according to interest-group representatives briefed on the governor's plans. Corzine declined to provide details about the budget he will present to the Legislature on Tuesday, noting he still has some "wiggle room."
If Corzine's plan is approved, only New York City, where smokers routinely shell out $3 in state and city taxes for a pack of cigarettes, would rival New Jersey. New York Mayor Michael Bloomberg recommended raising the city's tax an additional 50 cents in January.
A $3 state tax would raise the price of brand-name cigarettes in New Jersey to about $6.60.
Health advocates waiting for New Jersey's indoor smoking ban to take effect next month praised Corzine's proposal, while cigarette companies and convenience stores promised to wage a fight.
"New Jersey will be well on its way to becoming one of the healthiest states in the union," said Tom Duffy, executive vice president of the New Jersey chapter of the American Cancer Society.
Dale Florio, a lobbyist for Philip Morris and QuickCheck Food Stores, warned that Corzine's plan could backfire.
South Jersey residents already drive to Pennsylvania, where the tax is $1.35 a pack, and Delaware, where the tax is 55 cents a pack. If New Jersey passes a higher tax, cigarette wholesalers on the state's borders "will need to build a parking deck," Florio said.
Only Rhode Island, at $2.46 a pack, has a higher cigarette tax than New Jersey's.
"The governor has said everyone must share the pain, but we've already borne pain a couple times already. They've taken our pint of blood," Florio said, noting that the cigarette tax was raised in 2002, 2003 and 2004. "What this will do is kill the convenience store industry, which gets 40 percent of its profits from cigarette sales. With the Internet and easy access to other states, the leakage is going to be tremendous."
Corzine said losing revenue to other states might become a problem.
"You have to be realistic that this is a tax that people can avoid," he said. "People unfortunately will continue to buy cigarettes. The bigger issue is how much is shifting off to the Internet, black markets and other states."
New Jersey depends on its cigarette tax to fund health-care programs and pay off $1.9 billion in bonds that Gov. Jim McGreevey approved to balance the state's fiscal 2005 budget. Those expenses will swallow $350 million of the more than $750 million in cigarette taxes New Jersey expects to collect next year, said David Rosen, legislative budget and finance officer for the state's nonpartisan Office of Legislative Services.
The state sees a decline in revenue each time it raises the cigarette tax, Rosen said.
"This would make us the highest in the nation and significantly higher than any other state in the region, so, yes, there would be an effect," he said. "But I suspect that anyone who would be priced out of smoking is already priced out. The biggest issue is people purchasing outside the state or online."
Buffalo News - March 17, 2006
Indian protests of cigarette tax law limited for now
By Tom Ernst
Operators of smoke shops on Indian reservations are blaming the state for recent increases in the prices they charge - but the protests were limited to a few signs Thursday.
If smokers are worried about a shortage of tax-free cigarettes, it wasn't evident at the smoke shops on the Cattaraugus Indian Reservation, where more clerks than customers were in evidence during a visit.
Two of the four shops visited had signs saying there was a $5 increase for a carton of cigarettes. But only one, First American Tobacco, was restricting sales with a five-carton limit. A clerk said no more cigarettes would be arriving, but she didn't know why.
At Seneca One Stop, customers with complaints about the $5 increase for a carton and $1 for a pack were advised to take it up with Attorney General Eliot Spitzer. "It's out of Seneca One Stop's hands," according to the sign.
At Seneca Hawk and Triple J's, there were no indications that prices had risen or of any limits on sales.
At the Tuscarora Reservation in Niagara County, Randy's Smoke Shop sported a handwritten sign saying, "Price Increase. Due to NYS Government. There Are No More Cigs Coming In. This Is It. You Can Thank Your NYS Government."
Another sign said there was a one-carton limit until further notice.
The tension on the reservations stems from a new state law that kicked in March 1 requiring wholesalers to pay state excise taxes - $1.50 per pack - on cigarettes they ship to Indian retailers to be sold to non-Indians. But Gov. George E. Pataki's administration, which for a decade has fought efforts to collect the tax, said it would not have its tax department enforce the new law while Pataki tried to negotiate with legislators for a one-year delay.
But Spitzer warned wholesalers that, despite the Tax Department's decision, the law is in force and they risked prosecution if they continued selling tax-free cigarettes to Indian retailers. And this week, the State Legislature said it would not go along with Pataki's call to delay the law until after he leaves office at the end of the year.
In response, wholesale tobacco executives say at least several companies, fearing legal consequences, have stopped shipping to the Indian-owned retailers. Only one tobacco company, Attea Milhelm & Bros., has confirmed a suspension of sales.
On Thursday, the Pataki administration did not comment on the latest wrangling. State Police were monitoring the situation as Tax Department lawyers met through the day to figure out a next step for the state to take.
Wholesalers have asked the tax agency to make clear that the law doesn't yet apply because of Pataki's decision to delay enforcement; Spitzer said the tax agency can't do that because the law is already on the books.
At the Allegany Reservation near Salamanca, tobacco merchants and other Senecas met Wednesday night and did a lot of "venting," according to sources.
There was talk of blocking highways and also of launching a public relations campaign against Spitzer, they said. Some of the tobacco Web sites were down or had messages saying "Internet Store Closed."
2 News - March 17, 2006
Senecas Hold Peaceful Demonstration Against Cigarette Taxes
By Robyn Young
Approximately 30 members of the Seneca Nation of Indians and supporters held a peaceful demonstration along the Thruway in Irving on the Cattaraugus Reservation Thursday afternoon.
They protested the renewed state effort to collect taxes on cigarettes sold to non-Native Americans in reservation smoke shops.
"I'm supporting our people because they (the state) are violating our rights," said Seneca member Karen Jimerson.
The demonstrators unveiled two new signs, reading "Honor Indian Treaties," and "Break a Treaty, Break the Law." Numerous truckers honked their horns in support as they passed the demonstrators on the Thruway.
When the state attempted in 1997 to collect taxes on gas and cigarettes sold to non-Native Americans, the Senecas held protests that included burning tires and disrupting traffic on the Thruway. Since then, various deadlines to collect the tax have come and gone.
A new law went on the books March first, aimed at collecting the tax from wholesalers, who would then pass increased costs onto Indian retailers. State Attorney General Eliot Spitzer is warning wholesalers they must pay the tax on cigarettes sold to Native American businesses or face prosecution. As a result, Milhem Attea and Brothers, a Buffalo-based business that is a major supplier for smoke shops, stopped shipments to Native American shop owners this week.
A company spokesperson, who declined to share her name, said they are suspending sales "for a short time" while their lawyers consider options. She said they are specifically concerned about Spitzer's warnings.
That's leaving Indian shops without their major supplier.
Wolf's Run owner William Parry said they will "try to find supply at other places, wherever we can get it from." One option includes brands like Niagara's, which are made right on the reservation.
Parry said he has raised his prices in response to demand and recently increased prices from wholesalers. Customers said some shops have raised their prices by $6 a carton.
Because Native American smoke shops avoid state and local taxes, they can sell cigarettes much cheaper. One brand sold for about $25 a carton that customers said they would pay $60 for elsewhere.
While Indian retailers are dealing with keeping their shelves stocked, the debate about the tax collection is being renewed.
State lawmakers say they lose about $200 million a year by not collecting the tax, and that the price disparity is unfair to convenience stores and other business off reservations. They also believe a U.S. Supreme Court ruling supports the collection of the tax.
Joe Crangle, Counsel for the Seneca Nation of Indians, disagrees, saying that ruling deals only with wholesalers and does not include their dealings on reservations. Crangle believes the state cannot collect the tax, based on treaties and the constitution.
"The state has jurisdiction, to some extent, over any kind of a wholesaler that does business within New York State, but when that wholesaler is dealing with businesses on the Indian reservation, New York State hasn't got jurisdiction there," Crangle said.
He also said the tax cannot be collected because although it is now on the books, the regulations to enforce it have not been levied by Governor George Pataki, who is attempting to get its implementation delayed.
A spokesperson for Attorney General Spitzer is quoted as saying the law is in effect, whether or not the tax department is implementing it.
Seneca Nation President Barry Snyder did not participate in Thursday's demonstration, but issued a statement saying "the actions of Attorney General Spitzer to threaten and intimidate wholesalers is interfering with official state policy." He said the Senecas need to develop a protected source of tobacco products, and do more to protect its economy.
Buffalo News - March 16, 2006
Key tobacco supplier halts sales to Senecas
Indian retailers struggle to keep cigarette trade flowing in wake of new tax law
By Tom Precious and Pam Kowalik
ALBANY - The major supplier of cigarettes to Seneca Nation smoke shops has halted shipments to the reservations.
Milhem Attea & Bros., a Buffalo firm whose business is almost exclusively supplying Indian retailers with cigarettes, said it can't risk being forced to pay cigarette taxes if state or local prosecutors try to enforce a new law that went on the books March 1.
But the company is considering a suit against the state to keep its tobacco sales flowing to Seneca and other Indian retailers, such as the Tuscarora Nation in Lewiston. Such a legal move could delay a resolution to the tax dispute.
The suspension of sales by Attea was seen Tuesday as a major development by those trying to end the tax-free cigarette sales.
"This might be the break that finally puts an end to this issue," said Russell Sciandra, director of the Center for a Tobacco Free New York.
Other cigarette suppliers also have stopped shipping to the Seneca retailers in the past several days, state officials and executives in the wholesale tobacco industry say. Those suppliers did not return calls for comment.
If true, industry sources said, the Seneca retailers could find themselves running short on tobacco products by next week.
The situation has left Seneca and Tuscarora retailers scrambling to keep the tobacco trade flowing.
The tobacco business has made many Native American businessmen wealthy, appealing to smokers trying to avoid the state's cigarette taxes that add $1.50 per pack before local sales taxes.
A lawyer for Attea said the sales could resume if the state Tax Department sends a new signal that the law is not in force.
A spokesman for Attorney General Eliot Spitzer said Wednesday that wholesalers risk possible criminal prosecution if they continue the sales.
"The tax department can say whatever it wants, but the law is in effect," said Darren Dopp, a spokesman for Spitzer, who has insisted the tax collection law became effective March 1 whether or not the tax agency implements its provisions.
Seneca President Barry Snyder Sr., in a prepared statement, accused Spitzer of threatening and intimidating wholesalers in a move that is "interfering with official state policy" of the Pataki administration.
"It has become obvious that the [Seneca] Nation must do more to protect its economy," Snyder said.
"We are left with no choice but to develop a protected source of tobacco products to ensure that the nation and its people are not denied the ability to consume and trade these products in our territory," Snyder added.
He did not elaborate and did not return calls for comment, but tribal leaders are looking into setting up some sort of Seneca-owned tobacco business to keep state tax collectors away.
The Legislature last year inserted into the state budget a provision requiring the state Tax Department to collect the taxes on cigarettes sold by Indians to non-Indians by getting the tax from wholesalers before the products are shipped to retailers.
Gov. George E. Pataki's tax department, however, said it would not enforce the new March 1 law because the governor was trying to negotiate a one-year delay in its implementation.
The recent move by Spitzer has angered employees of cigarette stores on the Tuscarora Indian Reservation.
Although employees were tight-lipped late Wednesday at the Smokin' Joe's complex on Saunders Settlement Road, Lewiston, a female employee - who would not give her name - said she expects tensions to escalate by Friday.
"I'm leaving New York State. This is the final straw," said the woman, who also said she feared for her job.
Smokers buying cigarettes Wednesday discovered the price rose by $6 a carton and 60 cents a pack.
The clerk at Smokin' Joe's said a carton of Marlboros regularly sold for $22.95. On Wednesday, the price was $28.95.
Crystal R. Avery, a clerk at Smokin' Joe's Indian Hill location, said even the Smokin' Joe's brands, which are made on the Tuscarora Reservation, have increased $6 a carton. Efforts to reach Joseph "Smokin' Joe" Anderson or a business representative were unsuccessful Wednesday.
Journal News - March 16, 2006
$7 a pack?
Smokers in New York City and statewide may be spared another cigarette sales-tax increase, but smokers in the Big Apple who bought cigarettes from one Internet company can expect a letter demanding the $3-a-pack sales tax they thought they dodged.
Smoking is not only a health danger, it's becoming even more of a pocketbook burden. The second factor could be the clincher for those who weren't convinced to quit by the first.
State Senate Majority Leader Joseph Bruno came out last week against Gov. George Pataki's proposal to increase the statewide sales tax on cigarettes statewide by $1.
He also opposed New York City Mayor Michael Bloomberg's plan to hike the city's own tax by 50 cents.
"We're not in favor of it", Bruno said. "We've talked about not one more cent in increased taxes, and that is a cent more in increased taxes." Bruno's support is necessary for both increases.
Meanwhile, Bloomberg's administration has been suing Internet companies to recover billions of dollars in lost sales taxes from people who bought cigarettes over the Internet since 2003. That's when a court-approved New York state ban on Internet cigarette sales went into effect. The Virginia-based eSmokes was the latest to capitulate. It has turned over its list of 12,500 customer names and addresses as part of a lawsuit settlement with the city, which could not collect from the company because it filed for bankruptcy protection last year.
The city's Department of Finance will attempt to collect an estimated $33 million that eSmokes customers should have paid. "While many mail-order and Internet cigarette retailers claim they can offer huge savings because their cigarettes are tax-free, those claims are false," a letter from the city reads. So much for tax evasion by Internet . . . on cigarettes, anyway.
New York City has collected some $750,000 from about 3,700 people in earlier mailings, about 65 percent of taxes owed. People who ignore the letters or refuse to pay face fines up to $100 a carton.
If Pataki prevails over Bruno, an added dollar would bring a pack of cigarettes to about $6 statewide. Add Bloomberg's additional 50 cents in the city.
Sun - March 14, 2006
The Cigarette Numbers
The recent announcement that cigarette smoking in America is at a 55-year low was hailed as terrific news by public health zealots, but it was actually an event more worthy of a week that also saw the premier of a new season of "The Sopranos." Whatever the new numbers show - and it isn't even clear they show anything at all - the data almost certainly don't demonstrate that high cigarette taxes have been working to reduce smoking. The real lesson here is that high cigarette taxes only lead to more crime.
The National Association of Attorneys General is trumpeting data from the Treasury Department showing that cigarette consumption fell 4% between 2004 and 2005. According to Treasury, Americans consumed 378.6 billion cigarettes in 2005, down from 525 billion in 1990. Although consumption had been gliding down for several years, Americans apparently started smoking noticeably less after the tobacco settlement of the late 1990s imposed new marketing restrictions while many states began levying ever higher taxes.
There's more to those numbers than meets the eyes, however, because the figures from the attorneys general only count legally traded cigarettes, which, by definition, are the only cigarettes government record-keepers can track. The drive for higher excise on cigarettes has provided an incentive for smuggling and illegal sale of cigarettes. Sales are soaring for cigarettes that go untaxed, and thus uncounted. While the number of taxed packs of cigarettes sold per person each year has fallen dramatically over the past 15 years, the percentage of American adults who smoke has barely changed, according to a paper written for the Tax Foundation by Richard E. Wagner. Mr. Wagner has received research funding from tobacco companies in the past, but not for this project. Either American smokers are cutting back or they're turning to Internet and illegal cigarette vendors.
Evidence points to the latter. By one count, up to 110,000 cartons of untaxed cigarettes are smuggled into New York City each day, of which only 112,000 cartons are seized by law enforcement in a year. No wonder sales of taxed cigarettes have fallen by 50% or more since the combined state and city excise in New York shot up to $3.00 a pack. Mr. Wagner estimates that one truck can cart up to 480,000 packs at a time up Interstate 95 from North Carolina or Virginia to New York. If a smuggler buys those smokes at between $3 and $4 a pack down South and then sells them for closer to $7 in Manhattan, he can make a profit of nearly $2 million for one day's work.
Not only does this deprive the government of revenue and foster general contempt for the law, but it also nurtures organized crime. Because of the logistical challenges involved, sophisticated crime networks control the bulk of the market for illegal cigarettes. Terrorists, too. In 2004, federal prosecutors won convictions against a smuggling ring connected to Hezbollah that had been running cigarettes from North Carolina to Michigan. Considering the low rates of detection, there's no way of knowing how enmeshed terrorists or their associates are in cigarette smuggling elsewhere.
This is a tax policy problem, not an enforcement problem. A misguided prohibition of alcohol in the 1930s merely succeeded in playing into Al Capone's hands. Today, prohibitive taxes on cigarettes are having a similar effect. If politicians want to try to convince voters that cigarette smoking is as damaging to society as heroin use or crack cocaine, they're welcome to argue that a ban is worth the enforcement headaches. But cigarettes remain legal, and the latest data from the attorneys general, notwithstanding claims to the contrary, actually suggest that prohibition via taxation is only driving business to terrorists and the mob. That's something for the lawmakers in Albany to mark as legislators start considering the governor's request for yet another cigarette tax increase.
First of Buffalo - March 13, 2006
Senecas react to Schumer bill
U.S. Sen. Charles Schumer said he will file a bill in Washington to ban the shipment of cigarettes and other tobacco products through the U.S. Mail.
The democratic senator said he collaborated on the measure with state Attorney General Eliot Spitzer. The two Democratic officials said the legislation would close a current loophole in the law that is allowing the illegal shipment of tobacco products to continue.
"Passing this bill will be the final nail in the coffin for the sale of cigarettes on the Internet," Schumer said.
The bill would allow fines of up to $1,000 per offense and jail time for repeat offenders.
Barry Snyder Sr., president of the Seneca Nation of Indians, criticized the legislation that he says would impact many members of the tribe.
"That Attorney General Spitzer and Sen. Schumer would call Senecas who sell cigarettes as being part of a 'massive criminal enterprise' is to malign the entire Seneca Nation and its people," Snyder said. "The only way legislation such as this can be enforced is if Senecas are denied the ability to ship packages through the mail, presumably on the basis of our 'looks.'"
Spitzer said the bill is a logical extension of agreements that he and other attorneys general have reached with FedEx, UPS and other private freight haulers in which they said they would stop shipping tobacco products to residences.
Spitzer and other attorneys general say Internet sales of cigarette and tobacco invariably violate various state and federal laws.
Snyder disagreed, noting Gov. George Pataki recognizes Seneca treaties with the United States, and has not enforced legislation for collection of sales taxes on tobacco products as approved by the state Legislature last year.
Schumer said the U.S. Postal Service already bans a variety of items from the mails, such as explosives, firearms and alcohol.
Buffalo News - March 10, 2006
240,000 cigarettes held amid Seneca tax dispute
Federal agents are holding 240,000 cigarettes that were recently seized while on their way to a tobacco dealer on the Seneca Nation's Cattaraugus Reservation.
According to court papers, the U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives obtained a court order and seized the cigarettes Feb. 28 at a truck stop on Broadway in Cheektowaga.
The cigarettes did not have the legally required tax stamps on them, and the truck's load was described in a freight bill as "24 pieces of assorted products," federal prosecutors said.
The cigarettes were being delivered from Mohawk Distribution in Hogansburg to Seneca Direct at 1525 Cayuga Road in Irving, authorities said.
Officials of Seneca Direct have the right to contest the seizure through the bureau's administrative-forfeiture process or through the federal courts, said acting U.S. Attorney Kathleen M. Mehltretter.
Sun - March 8, 2006
Online Buyers Of Cigarettes May Be Taxed
By Jill Gardniner
Smokers who have purchased cigarettes online should beware: They may soon get a tax bill for cigarettes bought via the Internet as long as six years ago.
Mayor Bloomberg announced a settlement yesterday with a Virginia based company called eSmokes that will allow the city and state to collect $33 million in cigarette taxes that were never paid between 2000 and 2003.
The settlement, which is linked to a lawsuit the city filed in 2003 against companies selling tax-free cigarettes to New Yorkers, required eSmokes to turn over the names of those who bought its products and to disclose how many packs or cartons they purchased.
The agreement is the latest chapter in Mr. Bloomberg's crackdown on Internet cigarette sales and the largest potential tax recovery of its kind for the city and state. Since 2003, the city has collected about $1 million in damages from several other companies for not paying taxes.
"Internet cigarette merchants who misrepresent themselves and evade the law cheat local businesses and New Yorkers," Mr. Bloomberg said in a statement. "They mislead the public; they break the law; and they will be held accountable."
A spokesman for the city's Department of Finance, Owen Stone, said the agency is preparing 12,500 letters that will be sent in April notifying buyers what they owe. Because the settlement window covers 2000 to 2003, which was largely before the city's 2002 cigarette tax hike went into effect, the state will get the lion's share of whatever is recouped.
The city's Department of Finance in the past has charged individual offenders as much as $43,000 in back taxes and fines. It still has a list of top offenders it is trying to get payments from.
The settlement ends the city's dispute with eSmokes, which filed for bankruptcy protection in May. The city still has a number of pending lawsuits against other Internet companies. It claims that the companies violated the federal Jenkins Act, which requires vendors to report the sales to the state where they are being shipped.
New York City is not alone in aggressively going after online cigarette vendors. It is one of several municipalities - most of the others are states - that have settled with eSmokes. In October, the company turned over the names of Massachusetts residents who purchased more than 130,000 cartons of cigarettes between November 2003 and February.
The city and state each charge $1.50 for a pack of cigarettes, but Governor Pataki wants to increase the state portion to $2.50 and Mr. Bloomberg has proposed raising the city portion to $2 this year.
Yesterday the majority leader in the state Senate, Joseph Bruno, said he is against tax increases in the next budget.
The lawsuits are just one portion of Mr. Bloomberg's assault on big tobacco. He has argued that the city's smoking ban for bars and restaurants, which he shepherded through, and the tax hikes he has proposed will deter people from smoking and improve public health.
The founder of a smokers' rights group called New York City Citizens Lobbying Against Smoker Harassment, Audrey Silk, said it is unfair to target those who buy cigarettes online. Ms. Silk said it was a "damn shame" that eSmoke had to turn over its private records. She said it's "not something you would expect in America."
Press - March 8, 2006
Web cigarette buyers face tax
Thousands of New Yorkers who bought cigarettes on the Internet without paying taxes will be contacted and told they must pay those fees, which add up to $33 million, the city said.
City lawyers say New York loses millions of dollars a year from unpaid taxes on Internet cigarette purchases, and they have gone after online dealers with a series of lawsuits.
Mayor Michael Bloomberg announced yesterday that under a settlement with Virginia-based eSmokes, the reportedly bankrupt company is providing the names and addresses of New York customers from 2000 to 2003, when a state ban on Internet sales took effect.
The Department of Finance said those 12,500 customers will receive letters demanding they pay back cigarette taxes, about $3 per pack.
"While many mail order and Internet cigarette retailers claim they can offer huge savings because their cigarettes are tax-free, those claims are false," the letter reads.
The settlement and upcoming mailing are not the city's first, but they are the largest. The Finance Department has sent letters to about 3,700 people in previous mailings, based on lists compiled from a series of smaller settlements.
Finance spokesman Owen Stone said the city has collected about 65 percent of the taxes, or about $750,000.
Buyers who ignore the letters or refuse to pay the taxes face $100-per-carton penalties.
The city law department said eSmokes is bankrupt. Telephone numbers listed for the company were disconnected, and e-mails to addresses on the site weren't returned.
City officials said they would prefer that the companies pay, but when those companies have no money for settlements, collecting taxes is the only option.
Press - March 7, 2006
Bruno: Cigarette tax increases unnecessary
By Michael Gormley
ALBANY, N.Y. -- State Senate Majority Leader Joseph Bruno on Tuesday said the state doesn't need the $1 increase in the cigarette tax proposed by Gov. George Pataki.
"We're not in favor of it," said Bruno, one of the leaders who would have to support the proposal for it to become law. "We've talked about not one cent more in increased taxes and that is a cent more in increased taxes."
Bruno said the Senate's budget proposal also cuts nearly $500 million in various fee increases proposed by Pataki in the $110 billion budget he presented in January.
"We just think that's excessive, given the fact that we have a surplus," Bruno said.
Bruno also questioned allowing New York City to have its proposed increase of 50 cents per pack _ to a total of $2 _ to raise $21 million for the city. Fellow Republican Mayor Michael Bloomberg has already been critical of Albany for failing to provide adequate funding to the city.
"We're going to look at this as part of the budget, but the intent is no tax increases in any shape or form and we've included fees in that," Bruno said.
Bruno referred to the surplus in the current budget that could be used in the fiscal year beginning April 1. Bruno said the current budget surplus is approaching $4 billion, Assembly Speaker Sheldon Silver estimated it at more than $2 billion and Gov. George Pataki said it is just under $2 billion.
The Assembly's Democratic majority was in a closed-door conference Tuesday working on its budget proposal that may include the cigarette tax, said Silver spokesman Charles Carrier.
Russell Sciandra of the Center for a Tobacco Free New York didn't immediately respond to a request for comment. He has supported cigarette tax increases as a way to reduce smoking, particularly for people under 18 years old.
A $1 increase in the tax would increase the statewide tax to $2.50 per pack of cigarettes, up from the current $1.50. It would be the highest state cigarette tax in the nation. A typical pack of cigarettes would cost about $6 statewide.
Press - March 7, 2006
Casino exemption could burn state's smoking ban
Bar, bowling alley owners sue New Jersey, claiming unfair edge
ATLANTIC CITY, New Jersey -- Fuming that a New Jersey smoking ban excludes the state's casinos, a coalition of bars, restaurants and bowling alley operators sued the state Tuesday, claiming the law is unconstitutional.
"What's happening here is that the state of New Jersey is giving an unfair advantage to the Atlantic City casinos," said plaintiff Armando Frallicciardi Jr., proprietor of Lorenzo's Restaurant, a Trenton landmark known for its cigar-friendly atmosphere.
The New Jersey Smoke-Free Air Act, which goes into effect April 15, bans smoking in restaurants, bars, private office buildings and other indoor places, but it permits it on the casino floors of Atlantic City's 12 gambling halls.
Some supporters said the exemption was needed to keep the casinos competitive with those in other states where smoking is allowed.
Casinos lobbied for the exemption, saying a universal smoking ban would drive business away, lead to job losses and cut into the state's share of casino revenues.
Last month, a Superior Court judge denied a request by bowling alley operators to stop then-acting Gov. Richard J. Codey from signing legislation, saying his status as governor had ended. Gov. Jon S. Corzine was sworn in just days after Codey signed the bill. The new lawsuit was filed in federal court.
Press - March 7, 2006
Casino losses conferences to state ban
VERONA, N.Y. -- Two more groups have pulled out of conferences at the Oneida Indian Nation's Turning Stone Resort and Casino because of the state's recent decision to ban its employees from attending events there, tribal officials said.
Nation officials said the state City and District Court Clerks Association pulled out of a four-day conference in April. The Professional Abatement Contractors of New York also canceled its annual conference scheduled for March.
Last month, the New York State Building Officials canceled its meeting at the resort, located 35 miles east of Syracuse.
State officials were to appear at all three conferences but were forced to back out after the state's executive branch banned them from "participating in any activities, meetings or seminars" at Turning Stone.
"We would always advise state agencies to avoid holding events at venues that don't recognize or comply with state and local laws," said Saleem Cheeks, a spokesman for Gov. George Pataki.
Since it opened 13 years ago, the Oneidas have never submitted to local and state oversight of Turning Stone. The state, however, has not previously restricted employees from speaking at the casino.
Cheeks said the state will assert its authority as incidents arise.
Nation spokesman Mark Emery said the cancellations would hurt both the casino and the economy of surrounding communities.
"They're attempting to hurt the nation and in the process they're hurting all of central New York," he said.
Turning Stone hosts about 1,000 business meetings a year, Emery said, and the canceled events were "small to moderate" in size.
Last year, the U.S. Supreme Court ruled the Oneida Indian Nation could not buy land and declare it sovereign territory, a decision that opened the way for local and state agencies trying to gain jurisdiction over nation-owned properties.
The nation does submit to federal authority, and some limited state and local jurisdiction.
The New York State Athletic Commission was allowed for the first time to regulate a Feb. 24 fight at Turning Stone's Event Center. The nation also is allowing Sherrill codes inspectors onto nation-owned property in the city.
However, the tribe continues to stymie Oneida County's steps to enforce the state's smoking ban at Turning Stone.
Press - February 23, 2006
Spitzer: Pataki administration poised to violate law March 1
By Michael Gormley
ALBANY, N.Y. -- Come Wednesday, state government will be breaking the law and begin costing taxpayers millions of dollars by choosing not to enforce legislation that would end the huge sales advantage that Indian tribes have over taxpaying competitors off reservations, said Attorney General Eliot Spitzer.
"The current tax laws are being ignored," said Spitzer, the state's lawyer. "The new law goes into effect automatically on March 1 ... regardless of what the tax department does."
"This is a dangerous precedent," said state Sen. Raymond Meier, a Utica Republican whose district includes the Oneida tribe's Turning Stone Casino. "If people are able to say that `We are going to ignore the law and try to negotiate a different legal framework with the state,' it's an invitation to anarchy.
"I know of no other body of law where the executive branch would say the Legislature is considering something, so we will ... suspend the law in the meantime," Meier said Thursday.
In 2005, 9.5 billion packs of cigarettes were sold in New York state without being taxed or stamped. That was up from 4.3 billion in 2000, according to Spitzer's staff. It estimates lost taxes to the state and New York City total about $300 million a year, while costing off-reservation retailers untold customers.
The state Department of Taxation and Finance said it won't enforce the new law requiring Indian tribes to pay the state's rising cigarette taxes for sales to non-Indians through its massive Internet site and at reservation stores. Instead, Commissioner Andrew Eristoff said he'll wait to see if the Legislature agrees with Gov. George Pataki to again delay enforcement by a year _ a delay the Democrat-led Assembly already rejects.
Nonetheless, officials on all sides figure nothing will happen Wednesday. And for some who fear a reprise of 1990s violence by Indians the last time the state tried to collect taxes, that's just as well.
As written, the law this time is aimed not at the tribes _ whose leaders say they are shielded from collecting state taxes as sovereign nations _ but at the large commercial tax and stamping agents licensed by the state.
The wholesalers are compelled by the law to stop selling untaxed, unstamped cigarettes to tribes. The Pataki administration's role under the law is to provide coupons, already printed up, that would allow Indians to avoid taxes on the cigarettes they buy for their own personal use.
The Pataki administration refused to say what, if anything, it has told the wholesalers to do as of Wednesday. Tax Department spokesman Tom Bergen said Tuesday he didn't know if the cigarette wholesalers will adhere to the law and stop providing untaxed, unstamped cigarettes to tribes _ the biggest Indian customer being the Senecas in western New York.
Normally, the state Taxation and Finance Department would take action against those lucrative licenses if a wholesaler failed to follow state law.
The next tier of action after Wednesday could be lawsuits, by non-Indian retailers against the state or by the state Attorney General's Office against wholesalers, but either courses would be lengthy.
"The tax stamping agents are required to comply with the law" when it takes effect automatically Wednesday, said Spitzer, who is the front-runner in the governor's race. "If they don't, then the tax department should initiate proceedings to pull their stamping licenses."
A major tax stamp company, Harold Levinson Associates of Farmingdale, didn't respond to a request for comment on what the company will do. Seneca spokeswoman Susan L. Asquith said the tribe feels the law doesn't begin Wednesday and doesn't know what wholesalers will do.
"We do not expect to begin enforcement on March 1," Eristoff stated in testimony before the Legislature at a Feb. 15 budget hearing. "As a matter of practical administration, we think it would be premature to begin implementing at the same time that the Legislature is reviewing substantive amendments to the law."
But the Legislature apparently isn't.
"No one is considering it seriously," said Assemblyman Alexander "Pete" Grannis, a New York City Democrat and the chamber's leader on the issue. "March 1, they are violating the law," he said of the Pataki administration.
"We believe this new approach is a workable, legal, nonintrusive approach as it relates to the sovereignty of the Indian Nations," Grannis said.
TV 2 - February 23, 2006
Taxes on Native American Stores Put Off Again
ALBANY — There's almost no chance the Pataki administration will begin collecting taxes on tobacco and gasoline from Native American merchants come March 1, defying the state Legislature once again.
And with this latest delay, some lawmakers and anti-smoking activists are convinced that Gov. George Pataki will stall the issue until he leaves office at the end of the year.
"My estimate is they're going to simply ignore the law and ride it out until the end of the governor's term," said Russell Sciandra, director of the Center for a Tobacco Free New York. "And everyone I've talked to seems to feel the same way."
This week, state Tax Commissioner Andrew Eristoff told a legislative panel the agency would not collect the taxes on March 1 as required, largely because the administration wants lawmakers to consider its idea to delay implementation by one year. Pataki is stepping down Dec. 31, declining to run for a fourth term.
The administration's postponement frustrated the Legislature's chief anti-smoking advocate.
"It's a bit disingenuous for you to say you can't enforce the law because we're considering changing it," Assemblyman Pete Grannis, D-Manhattan, told Eristoff.
In a later interview, Grannis said, "If their approach is 'we're going to ignore it,' then what can be done to force a commissioner to obey the law? You can try a public relations campaign ... outlining how many teachers this pays for, for example. But that's a means of embarrassment and maybe the administration is beyond embarrassment in their swan-song year."
The long-running tax issue is no small matter: Hundreds of millions of dollars are at stake. On one side are convenience stores that compete with reservation stores and state legislators who view the taxes as a way of helping to pay for the state budget. Joining them are anti-smoking groups that want to see cigarettes made more expensive.
On the other are customers who enjoy cheaper prices and Native American tribes that insist the law would intrude on their sovereignty.
"The Seneca people commend Gov. Pataki for his consistent position recognizing and respecting the unique, sovereign status of the Seneca Nation," Seneca President Barry E. Snyder Jr. said in a statement a day after the administration said it would not collect the taxes on March 1. "At the same time, we continue to be amazed that the New York state Legislature persists with the debate about sales tax collection on Seneca territories when federal laws and treaties are clear."
The Department of Taxation and Finance is recommending against a March 1 start date because the agency is asking lawmakers to give the governor more power to negotiate agreements with Indian nations, without having to seek legislative approval, spokesman Tom Bergin said. The Legislature is also being asked to consider an Indian export decal system to track sales of cigarettes out of state, he said.
"As a matter of practical administration, we think it would be premature to begin implementing March 1, at the same time the Legislature is reviewing the substantive changes to the law," he said.
A state Senate report figured New York could reap $1 billion from the tax collections, though others have estimated less than half that. The state's per-pack tax on cigarettes is $1.50; it charges about 29 cents in taxes per gallon of gasoline. Pataki in January proposed increasing the cigarette tax by an extra dollar a pack.
Courts have ruled that states can impose taxes on sales by Indian-run stores to non-Indians. The state could do so by collecting tax payments from cigarette distributors. Reservation stores would then raise prices, but Native American customers would be eligible for rebates, legislators said.
Tribes think they are being made scapegoats for New York's sales tax losses on cigarettes.
"The majority of the losses are coming from Internet sales, bootlegging and out-of-state sales," said Mark Emery, spokesman for the New York Oneidas, who have a reservation west of Utica. "The reservations are not located near population centers. They are generally located in rural areas. So we don't think the majority of loss is coming from reservations."
When Pataki raised the sales-tax issue in 1997, about 1,000 members of the Seneca Nation burned tires and shut down the state Thruway between Hamburg and Silver Creek south of Buffalo. There was a melee, triggering the arrest of 11 people. The issue faded away.
Pataki may still want to "avoid front-page news with another flareup," Grannis said. The governor is exploring a 2008 presidential run.
The issue was revived in 2003 amid the recession. Faced with a $12 billion budget gap, legislators threaded together a hodgepodge of tax, fee and tuition hikes, sold off a good portion of the state's share of a national tobacco settlement, borrowed heavily and expanded gambling.
They also banked on collecting $164 million in taxes from sales at Indian reservations, primarily on cigarettes and gasoline. But collections never began.
Every year since, legislators have called for collecting the tax and Pataki has ignored them. Last year, legislators included it in the budget with the provision that the state begin collecting on March 1.
"The Legislature, we make the laws. The executive branch is supposed to implement and enforce them," said Sen. Raymond Meier, R-Western, Oneida County.
Pataki officials have repeatedly said they want to address the issue through "cooperation, not confrontation." They have tried to negotiate "parity" deals in which tribes would voluntarily raise the prices of gas and cigarettes to match what nearby non-Indian stores charge — without paying taxes to the state. But tentative agreements — sometimes included as part of a way to settle longstanding Indian land-claim lawsuits and open Indian-run casinos — have always fallen through.
The latest delay was all too familiar to convenience store owners.
"We have the governor once again using his delay tactics and dog-ate-my-homework excuses for not enforcing (the) law," said James Calvin, president of the Association of Convenience Stores.
Yet he's not convinced that the issue is dead this year.
"We don't have any doubt that, in one way or another, the taxes on sales to non-Indians are going to be collected by New York," Calvin said. "The question is: How soon?"
Daily Dispatch - February 23, 2006
Nation a no-show at no smoking hearing
By Andrew Brown
UTICA - Attorneys for the Oneida Indian Nation say Oneida County did not have the authority to cite the Nation for a smoking violation at Turning Stone Resort and Casino last year.
A hearing was scheduled for Wednesday morning at the county building in Utica for both sides to argue the validity of the citation. However, the hearing was cut short, Oneida County Assistant Attorney Raymond Bara said, when county health officials received a letter from Nation attorneys stating their position.
On Nov. 22, the Nation was cited for a violation of the Clean Indoor Air Act after county health inspectors found someone smoking at Turning Stone during an unannounced inspection. It was the first time the Nation was cited for a violation of the 2003 state law, which bans smoking in New York workplaces.
If county officials prove the violation was valid, the Nation could have faced up to a $1,000 fine. No arguments were made at the hearing, though.
"At the last minute we received a motion by the Oneida Indian Nation to dismiss the complaint for lack of jurisdiction," Bara said.
In the letter, Nation attorney Peter Carmen cited an October 2005 decision by U.S. District Judge David Hurd that forbade Madison County from foreclosing on Nation-owned land, as evidence of the Nation's tribal sovereignty and exemption from local regulation.
"Arguments about whether, after the Sherrill decision, the county can regulate smoking at the Nation's casino are irrelevant because the Nation's tribal sovereign immunity with respect to enforcement requires the county to reach an agreement with the Nation if it wants to address smoking at the Nation's casino," Carmen wrote in the letter.
The "Sherrill decision" Carmen referred to in the letter is that of the U.S. Supreme Court's decision in the City of Sherrill vs. the Oneida Indian Nation case. In March 2005, the Supreme Court ruled in that case that Nation-owned land in the City of Sherrill is not exempt from local taxes and regulations.
Bara said that while the decision in Sherrill vs. the Nation is part of the reason why Oneida County believes it can enforce health regulations at Turning Stone, he said their jurisdiction also stems simply from the fact that the Nation owns a business in the county.
"From a regulation standpoint, they are no different from any other business operating in Oneida County," Bara said. "In the Clean Indoor Air Act there is no exception for Indian tribes or businesses operated by them."
In the letter, Carmen argued that the Nation's tribal sovereignty makes them different in several aspects. Not only does the county not have the jurisdiction to enforce smoking regulations at Turning Stone, he wrote, they also do not have the power to collect fines from the Nation or summon Nation representatives to meetings. No one from the Nation attended Wednesday's hearing.
Carmen said the Nation is willing to reach some type of agreement with the county that would allow the Nation to have smoking at Turning Stone. In early December, the Nation applied for a waiver of the smoking ban, and Carmen wrote in the letter that the Nation would like to complete an agreement that would allow for the waiver to be issued.
"The Nation remains interested in agreeing to a smoking compact with the county, one that would be satisfactory to both parties and that would be a sufficient basis for the county to issue a smoking waiver with respect to the Nation or any other party following such smoking policies," Carmen wrote in the letter.
Bara said the county has requested that the Nation revise their plan for the way in which the waiver would be implemented at Turning Stone before the county will agree to any such compact. In order to get a waiver, which the county has issued to about 30 other businesses, the Nation has to present a plan that includes separate smoking and non-smoking areas at the casino.
"They requested to have smoking as the status quo, as it is now," Bara said. "We told them that was unacceptable. They are supposed to come back with something more restrictive."
Bara said that although the Nation is treating the smoking violations and the smoking waiver as the same issue, county health officials do not see it that way.
"We are looking at the two as separate entities," Bara said. "They are not tied together as much as they seem."
He said the county has until Mar. 17 to reply to the Nation's motion on the smoking violations. A hearing officer will then make a decision by Mar. 31 on the issue.
The smoking waiver though, Bara said, could be decided at a different time, depending on when the county receives more details from the Nation about how the waiver would be implemented at Turning Stone.
Observer Dispatch - February 23, 2006
Oneidas seek smoking compact
Turning Stone has been cited for violations
By Elizabeth Cooper
The Oneida Indian Nation wants a "smoking compact" with Oneida County that would allow smoking in designated areas of Turning Stone Resort and Casino.
The Nation asked for the compact just as a hearing on smoking-ban violations at Turning Stone was set to happen Wednesday.
Nation General Counsel Peter Carmen's Feb. 21 letter to the county seeks a compact "that would be a sufficient basis for the county to issue a smoking waiver with respect to the Nation or any other party following such smoking policies."
But Carmen's letter also refers to a recent ruling by federal District Court Judge David Hurd that said the tribe's sovereignty still gives it immunity over enforcement of some state and local laws.
Oneida County grants waivers to bars, restaurants and other establishments if they can prove business has been hurt by banning smoking and that they ways to ease the effects of second-hand smoke. Turning Stone has been cited for violations of the Clean Indoor Air Act, which prohibits smoking in any workplace.
The U.S. Supreme Court decision City of Sherrill v Oneida Indian Nation of New York ruled that the Oneidas' non-reservation land was subject to local taxes and regulations. Hurd's decision, which came after the Supreme Court ruling, said though the land was subject to the laws, local governments were not entitled to enforce those laws.
"As a result of the Nation's immunity, the county does not have the power to summon the Nation to an administrative hearing," Carmen's letter reads.
Acting county Public Health Director Nicholas DeRosa said as far as he was concerned, the Oneidas were under his jurisdiction where the smoking law is concerned.
"Our position hasn't changed," DeRosa said. "We feel they are under our jurisdiction, and are subject to the Clean Indoor Air Act."
He said any criteria for a smoking compact would be the same as it would for any bar seeking a waiver. He said the county is reviewing Carmen's letter.
At least one bartender said she wouldn't mind if smoking continued at Turning Stone.
"I don't think the law should be enforced at all," said Jackie Roberts, who tends bar at The Devereux in Utica. "If (the Oneidas) can do something, good for them."
But David Vickers, president of Upstate Citizens for Equality, a group that believes the Oneidas should follow local laws, dismissed the idea that Hurd's decision had any bearing on the smoking matter.
"The Oneidas are trying to confuse people who are trying to follow this mess," he said.
Oneida Nation spokesman Mark Emery declined comment, referring to Carmen's letter.
Buffalo News - February 16, 2006
Collecting tobacco taxes delayed
Legislature had said to start March 1
By Tom Precious
ALBANY - State tax officials are prepared to begin collecting taxes on tobacco and gasoline from Seneca merchants come March 1, but they won't, the state tax commissioner said Wednesday.
The Pataki administration wants to wait until the State Legislature considers a new plan to delay implementation of tax collection, Commissioner Andrew Eristoff said, even though the Legislature has directed that collection of the taxes begin March 1.
"As a matter of practical administration, we think it would be premature to begin implementing at the same time that the Legislature is reviewing substantive amendments to the law," Eristoff told Senate and Assembly fiscal committees at a hearing Wednesday on Gov. George Pataki's 2006 state budget plan.
Administration officials also say it would cost the state $1.5 million per day to enforce the tax collection if more unrest occurs similar to the last time the state tried to collect the taxes.
The deferral angered lawmakers, non-Indian store owners and health groups. They have been trying for years to push the governor to collect hundreds of millions of dollars in state taxes that Indian retailers do not charge their customers.
Past laws ordering the governor to collect the tax gave him some wiggle room to avoid the issue. But last year, the Legislature, as part of the state budget legislation that Pataki signed, in clear language said the state tax agency must begin the tax collection on March 1 this year.
Assemblyman Alexander Grannis, D-Manhattan, the Legislature's chief anti-smoking advocate, said the governor is afraid that Indian protesters would engage in violent demonstrations. "They had a bad experience before," Grannis said of the 1997 protests in Western New York that led to injuries among state troopers and Indians and the closing of part of the state Thruway. "Pataki is crisscrossing the nation and he doesn't want an uproar at home. "He's trying to keep his head down in New York."
Eristoff said this year the administration wants time to develop an export tax stamp system that tribal retailers can use for selling cigarettes out of state. He said the administration also wants to negotiate deals with the Indian tribes, instead of forcing the issue by March 1.
But critics say the Seneca Nation has little reason to negotiate an end to the tax-free sales. "If Pataki has nothing to trade, why should they give up on this?," said Russell Sciandra, director of the Center for a Tobacco Free New York.
Health groups say the tax collection on tobacco would sharply cut down on the number of minors who can illegally purchase cigarettes over the Internet from Indian retailers. A majority of smokers in New York, in state surveys, acknowledge buying cigarettes from tax-free or low-tax outlets, such as Indian Internet sites or out-of-state stores. Smokers in Western New York lead the pack: 71 percent reported buying cigarettes all or some of the time at tax-free and low-tax alternatives, a state health department-commissioned study recently found.
Non-Indian retailers, especially those in Western New York that have lost business to the tax-free sales, say the governor will only make matters worse for small businesses by not collecting the tax while at the same time proposing to increase the cigarette tax from the current $1.50 per pack to $2.50. On a carton of cigarettes, that would give tax-free Indian retailers a $25 price advantage.
Pataki is setting the stage for a "constitutional crisis" if his tax agency ignores the March 1 legal deadline to collect the tax on tobacco from wholesalers who supply Indian and other retailers, said James Calvin, head of the New York Association of Convenience Stores.
"Three times the governor has taken a solemn oath to faithfully execute all the laws of the state of New York. He doesn't get to pick and choose which ones to enforce," Calvin told lawmakers.
Sun - February 3, 2006
Addicted to Excise
We've never been ones for higher cigarette taxes, and we have even argued in the past that Albany needs to change the law to allow tax competition from out-of-state vendors who sell their wares over the Internet. That being said, however, the law is the law until the legislature changes it, and in one instance at least, Governor Pataki needs to start enforcing the law in respect of cigarette taxes. As a city councilman and a state senator, along with representatives of convenience stores and bodegas, noted on the steps of City Hall yesterday, the state is supposed to be collecting cigarette taxes on Indian reservation sales to non-Indians. It is not. Before anyone starts trying to impose even more punitive taxes on a legal product, the state could at least collect the excise it already levies.
At least since the 1990s, the state has, at least in theory, taxed the cigarettes that Indian tribes sell to non-Indian visitors to their reservations. Thanks to the high taxes imposed on packs sold at ordinary New York retailers, however, the tribes had been doing a lucrative business on "discounted" tax-free cigarettes and objected when the state tried to cut in on their trade. Some challenged the new tax collections in court, where a unanimous United States Supreme Court eventually ruled that the tribes' sovereign status didn't protect them from taxes for transactions involving non-Indians. However, some took to the streets, literally, shutting down major highways by burning tires at the roadside, causing mile-long back-ups that led to one accident that claimed the life of an innocent motorist.
Ever since, Governor Pataki has seemingly lost his will to enforce the law. A spokesman yesterday told the Sun's Bradley Hope that the governor prefers to gain the tribes' compliance by negotiating individual compacts with them, despite the fact that they already have a legal obligation to pay the taxes. By one conservative estimate, the state is losing $450 million a year by not collecting the tax on in-person sales on reservations as well as Internet sales and packs that end up in the hands of street vendors. Mayor Bloomberg has attempted to solve the problem mainly by pursuing consumers who buy over the Internet. And even while current taxes go uncollected, both the mayor and the governor have proposed their own competing additional tax hikes on the New Yorkers who do pay the cigarette taxes.
While we believe the law should be enforced, we don't mind saying that the way excise has been placed upon cigarettes in the state and city of New York is an outrageous abuse of governmental authority. Messrs. Bloomberg and Pataki love to cite public health when appealing for tax hikes. But their claims are not credible. If they cared so much about Medicare and Medicaid expenditures or lung cancer rates, they would enact an outright ban on the supposedly deadly products instead of turning them into a money machine for the state. They are willing to tolerate cigarettes because they want the money - and because New Yorkers wouldn't approve a ban on the sale and use of a product millions of New Yorkers have weighed the risks of and decided to enjoy. When the laws already on the books are enforced, New Yorkers will feel even more clearly the tax increase that such a move represents and pressure will grow for an end to the government's addiction to tobacco money.
Sun - February 3, 2006
Coalition Decries Move To Hike Cigarette Tax
By Bradley Hope
A coalition of small business owners across the city and state joined politicians outside city hall yesterday to create a unified front against Mayor Bloomberg's proposed cigarette tax hike.
The opponents of the $0.50 hike said they wouldn't stand for new levies until the state began prosecuting Indian reservations for illegal cigarette sales, which they said are damaging some businesses' revenue beyond repair.
Mr. Bloomberg proposed an additional $0.50 tax on cigarette sales in his preliminary budget proposal, which was released earlier this week. This would boost city taxes on cigarettes to $2. Together with state levies, the taxes add up to $3.50 onto the price of a pack. Mr. Bloomberg has said he hopes the taxes will help New Yorkers quit smoking, and that in the meantime the revenue would help service the city's escalating debt.
Opponents said not only do the taxes hurt small businesses, they give extraordinary incentives to smokers to seek their nicotine fix on the black market.
A spokesman for the city's Department of Finance, Scott Reif, said that despite the accusations, the city has "an aggressive policy for cracking down on illegal cigarette sellers," including undercover operations and investigations of people who bought cigarettes online. Their efforts have brought in about $700,000 so far, he said.
Governor Pataki has said that rather than swooping into Indian reservations to collect taxes, he would rather create "compacts" between the governments of the reservations and the state.
Record - January 31, 2006
Cigarette smoking is not only very bad, for your health, but if Gov. Pataki has his way,
it will become very, very bad for your wallet.
Among the many revenue raisers he addressed in his budget plan this month was a proposed $1 hike in the tax per package of cigarettes. That would raise the price to about $6 a pack, half of which would go to state taxes. It would also make New York number one in yet another taxation area.
While efforts should be made to get people to quit, we believe this proposed hike is unfair and, in the long run, could prove self-defeating and costly to the state down the road.
The proposal amounts to nothing more than a "sin tax." What the governor is saying is that if you want to smoke, knock yourself out, there's nothing the state can do about it. But you're a sinner, and you are going to pay for your filthy habit.
This watchdog attitude is somewhat hypocritical, coming from a state that is increasingly dependent on gambling, which is essentially a voluntary tax, to stay afloat. In fact, the state promotes it and is seeking to expand gambling opportunities.
State Budget Director John Cape, in supporting the proposed hike, said he believes it will discourage young people from buying cigarettes. We're not sure we agree. Young people spend anywhere from $8-$10 to go to a movie, then tack on another $10 for a medium soda and small popcorn. A dollar more for cigarettes is hardly going to deter a significant number of young people from smoking.
Beyond all that are the possible future costs to the state. For instance, to accommodate the $1 hike, New York City would lower its taxes by $1. This may leave the municipality with budget shortfalls that would have city officials going to the state hat in hand.
Even more people will cross state borders to buy cigarettes, shop on Indian reservations, or even, despite its illegality, buy cigarettes on the Internet. That means no revenue for the state.
Were this tax to be used strictly for stop-smoking programs, health benefits, rehabilitation and the like, it would still be onerous, but it would be justifiable. However, only a miniscule portion of that revenue goes to education or health costs. Most goes toward general expenses.
A spokesman for Senate Majority Leader Joseph Bruno said the Senate
remains opposed to any new taxes.
Even in a matter as volatile as cigarette taxes, we urge the Senate to stick by their stand.
- January 26, 2006
Philip Morris Agrees To Snuff Web Cigarette Sales
Philip Morris USA and the attorneys general of 37 states have agreed on a new program to combat the illegal sale of the company's cigarettes over the Internet and through the mail, striking another blow at contraband tobacco sales.
"This is a major step forward in our ongoing effort the shut down illegal internet cigarette traffickers," said New York Attorney General Spitzer.
"These illegal enterprises cannot remain in business without a steady supply of cigarettes, and thus restricting that supply can be very effective. We will continue to pursue this goal by asking other cigarette manufacturers to follow Philip Morris's lead and reduce the flow of their cigarettes to these illegal traffickers."
The agreed-upon protocols provide for the:
• Termination of shipments of cigarettes to any of Philip Morris's direct customers that the attorneys general have found to be engaging in illegal Internet and mail order sales;
• Reduction in the amount of product made available to direct customers found by the attorneys general to be engaged in the illegal re-sale of Philip Morris cigarettes to the Internet vendors; and,
• Suspension from the company's incentive programs of any retailer found by the attorneys general to be engaging in such illegal sales.
"Our voluntary agreement with the state attorneys general builds on Philip Morris USA's existing trade programs and policies intended to preserve the integrity of our brands and the legitimate trade channels through which they are sold," said Denise Keane, Philip Morris USA executive vice president and general counsel.
"It sets a framework for continued information sharing with law enforcement and support of their efforts to eliminate illegal sales of Philip Morris USA products."
The attorneys general believe that virtually all sales of cigarettes over the Internet are illegal because the sellers are violating one or more state and federal laws, including:
(1) state age verification laws;
(2) the federal Jenkins Act (which requires that such sales be reported to state authorities);
(3) state laws prohibiting or regulating the direct shipment of cigarettes to consumers;
(4) state and federal tax laws;
(5) federal mail and wire fraud statutes; and
(6) the federal RICO law.
Many of the sales made by foreign websites also violate federal smuggling, cigarette labeling, money laundering and contraband product laws.
The attorneys general note that Internet cigarette sales also present a significant risk to public health, because most Internet vendors illegally fail to charge taxes, and it is well-established that lower cigarette prices lead to increased smoking rates.
Moreover, while "brick-and-mortar" retailers check photo IDs to prevent children from buying cigarettes, the vast majority of Internet sellers have age verification systems that are wholly inadequate.
Numerous studies have shown that the earlier an individual begins to smoke, the more likely it is that the person will become addicted, and thus age verification through photo IDs is essential to protect children from a lifetime of smoking.
Today's agreement is the third major development in the Attorney Generals' multi-pronged effort to restrict the payment, shipment and supply operations of the illegal Internet cigarette traffickers.
In March 2005, the attorneys generals announced that the major credit card companies had all agreed to stop processing credit card payments for the Internet retailers. Later in the year, both DHL and UPS agreed to stop shipping packages for the vendors engaged in these illegal sales.
Philip Morris notes that it previously has penalized direct customers and retailers who sold its cigarettes illegally over the Internet and through the mails. Philip Morris is now the first tobacco product manufacturer to agree to reduce the supply of cigarettes to direct customers who supply vendors engaged in the illegal re-sale of Philip Morris cigarettes on the Internet.
The attorneys general commended Philip Morris for its cooperation in the effort to reduce these illegal sales. In addition, the attorneys general will be encouraging other tobacco product manufacturers to take steps to reduce the supply of their cigarettes that are re-sold by illegal Internet cigarette traffickers.
The negotiations with Philip Morris were lead by the New York Attorney General's Office. In addition, the attorneys general from the following jurisdictions have joined this agreement: Alabama, Arkansas, American Samoa, California, Colorado, Connecticut, Delaware, District of Columbia, Georgia, Hawaii, Idaho, Illinois, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Mexico, New Jersey, Northern Marianas, Oklahoma, Oregon, Puerto Rico, South Carolina, South Dakota, Tennessee, Utah, Vermont, Washington, West Virginia, Wisconsin and Wyoming.
Sun - January 25, 2006
Tax Hike Critics Say City Smokers Will Shop Online
By Jacob Gershman
ALBANY - Smokers and other critics of Mayor Bloomberg's proposed cigarette tax hike say it wouldn't persuade New Yorkers to quit but will convince them that they should do their cigarette shopping online.
Mr. Bloomberg on Monday said he will propose in his budget a tax increase of 50 cents on a pack of cigarettes. The hike would push the city's tax to $2 and the combined city and state tax to $3.50, the highest total in the nation. When Mr. Bloomberg became mayor, the city's cigarette tax was 8 cents.
Opponents of Mr. Bloomberg's plan are predicting that New Yorkers will find a way to avoid paying the tax, just as the mayor said New Yorkers would evade the sales tax on clothing purchases that Governor Pataki is imposing in his new budget. "Anybody with a computer can avoid the tax," the president of the New York Association of Convenience Stores, James Calvin, said. He said more New Yorkers would purchase their cigarettes from online Indian stores.
Mr. Bloomberg said his campaign against smoking has driven down the number of smokers in the city and has saved lives. In June, his administration released telephone survey data that it said showed that the number of smokers in the city has sharply fallen since Mr. Bloomberg took office. A spokesman for the mayor said the $1.42 tax hike imposed in 2002 has increased revenue by $120 million annually.
Mr. Bloomberg also said it's become increasingly "difficult" for New Yorkers to evade taxes on cigarettes. Attorney General Eliot Spitzer has tried to clamp down on the tax-free cigarette market, pressuring major credit cards companies and mail carriers not to do business with the dealers. A retired New York City police officer who has campaigned vigorously against the mayor's anti-smoking measures, Audrey Silk, said the mayor is treating smokers as if they were "sub-human."
Mr. Bloomberg's plan would require approval from the state Legislature.
- January 25, 2006
City, state split over smoking tax hike
By Dan Janison
An early budget proposal by Mayor Michael Bloomberg to hike the city's portion of the sales tax on cigarettes by 50 cents is not catching fire -- at least not yet -- in the State Legislature.
A spokesman for Assembly Speaker Sheldon Silver (D-Manhattan) expressed concern about adding an incentive for illegal importation via Internet sales that he said the state has been failing to curb.
A spokesman for Senate Majority Leader Joseph Bruno (R-Brunswick) took a more blunt position.
"We don't like taxes," John McArdle said. "We're looking to give money to people and not take it out of their pockets."
Both houses have approval power over local taxes levied by the city. The state budget is months away from enactment.
The City Council also has say over the tax proposal. Speaker Christine Quinn (D-Manhattan) said through a spokeswoman Tuesday that she agrees hiking the cigarette tax "can be a useful deterrent" to smoking, but said the proposal's specifics will need to be reviewed.
The city's cigarette benefit was raised from 8 cents per pack to $1.50 a pack in July 2002, one of several tax and fee hikes pushed by Bloomberg in that year to close a $5-billion budget gap.
Coupled with the state's per-pack tax of $1.50, that brought the price of some brands in New York to more than $7 per pack -- almost twice the national average and among the most expensive prices in the country.
At the time of that increase, Bloomberg hailed it as a way to save lives by discouraging tobacco use.
Monday, in his annual testimony before a fiscal panel of the Legislature, Bloomberg floated his latest increase plan and opposed Gov. George Pataki's recent proposal to reconfigure the cigarette tax.
Pataki has called for reducing the city's share of the cigarette sales tax from $1.50 to 50 cents per pack. At the same time, he would increase the state's share from the current $1.50 to $2.50 per pack, with a promise to reimburse the city for its projected revenue loss of nearly $78 million.
"This is a classic case of, if it ain't broken, don't fix it," Bloomberg responded on Monday, remarks that he echoed Tuesday at a City Hall news conference.
"Down the road, it would be easy for the state to cut that money coming to us," he said Monday.
"If we make any change at all in the cigarette tax this year, we must raise the tax that the city can collect," and use the extra money on smoking cessation programs, Bloomberg told the lawmakers.
Later Monday, outside the hearing room, Bloomberg added: "There's a clear correlation -- you raise your cigarette taxes, fewer children go and smoke. ... I would argue we should even raise our city tax on cigarettes up another 50 cents."
Sun - January 24, 2006
Bloomberg Wants To Go Deeper Into the Cigarette Tax Business
By Jacob Gershman
ALBANY - Mayor Bloomberg wants to raise New York City's tax on cigarettes by 50 cents, which could drive the cost of a pack past the $8 mark.
When he presents his budget at the end of the month, he will propose raising the city's tax to $2 from $1.50. The combined city and state tax in New York City would be $3.50, the highest in the nation.
It would be the first increase since the mayor raised the tax on a pack of cigarettes by $1.42 in 2002.
The mayor, whose campaign against smoking was a defining policy of his first term, said here yesterday that the city could do more to lower the number of smokers in the city, a population that is already in steep decline. He said the city would use the money derived from the additional tax to support anti-smoking programs.
"Nobody likes taxes," Mr. Bloomberg said. "But cigarette taxes are something different."
He added: "It's not a revenue source. We're trying to save the lives of our children." In June, the Bloomberg administration released telephone survey data that it said showed that between 2002 and 2004 - the period during which the city instituted its restaurant and bar smoking ban and imposed the tax hike - the number of New Yorkers who smoke fell by 188,000, a 15% decrease.
The mayor made public his intention to raise the city's tax while sharply criticizing Governor Pataki's own statewide cigarette tax plan. Mr. Bloomberg, who was in Albany yesterday to offer lawmakers his official response to the governor's executive budget, said he was suspicious of Mr. Pataki's plan to increase the state's cigarette tax by $1 and have New York City lower its tax by the same amount.
Under the plan, the state would then reimburse the city for the estimated $78 million loss in revenue. In other words, according to the governor's proposal, there would be no change in the city's cigarette tax, but it would raise the level of the rest of the state to match what New York City smokers pay.
Accusing the governor of trying to fix something that isn't broken, Mr. Bloomberg said he feared that the $78 million reimbursement is not guaranteed but would vanish if Albany in the future decided to lower the state tax.
"While the effect would be revenue neutral, making this change could open the door in the future to those who would like to reduce the tax at the State level," Mr. Bloomberg said, "something that none of us should hope to see."
of Atlantic City - January 21, 2006
Corzine not ready to ban smoking on casino floors
By Pete McAleer
NJ - Gov. Jon Corzine wants to hold off on plans to expand the smoking ban to casino gaming floors until he learns more about how a ban might affect the bottom line for southern New Jersey's largest employers.
Reiterating a stance he laid out during his campaign, Corzine told reporters at a Statehouse news conference that he wants an independent economic study before he makes any decisions on whether to ban smoking in casinos.
Casino gaming floors are exempt from a statewide indoor smoking ban that goes into effect April 15. State lawmakers in both houses, including Assemblyman Jim Whelan, D-Atlantic, introduced legislation this week that would remove the exemption.
“In an ideal world I'd like for the smoking ban to be universal,” Corzine said. “But I also have real sympathy for a view that Atlantic City competes in a global marketplace, and our state and our people have invested enormous amounts of resources through the years. I'm not going to be rushed into making a decision. I'm going to have an independent, economic analysis that I have confidence in to tell me whether this is a meaningful element.”
Asked if it was fair to only give an exemption to casinos, Corzine answered, “Is it fair to undermine the economic well-being of an enormous asset like the casinos, which claim that this will have real impact with their ability to compete with Las Vegas or all of the other elements of gaming around the country or around the globe?”
The casino industry, backed by southern New Jersey lawmakers from both parties, cited economic damages suffered in Delaware to argue for an exemption. Atlantic City-area restaurant owners have argued that they would be at an unfair disadvantage if smoking were allowed in casinos but not their establishments. Others argue that it is unfair and illogical to pass a smoking ban for health reasons and not protect the health of casino workers.
- January 20, 2006
Smoking lounges may slip through law's cracks
By Colleen Diskin
The doors of restaurants and bars are closing to New Jersey's smokers, but those who like to puff in a crowd may not necessarily be left out in the cold.
The law signed by former Gov. Richard J. Codey on Sunday exempts casinos and existing cigar bars from the list of public places where smoking is banned. But another provision could allow the opening of smoking lounges, possibly even ones that serve food and drink, observers say.
A grand opening ceremony for one such lounge in Chicago was held Thursday, the same week that city's indoor smoking ban took effect.
Modeled after upscale coffeehouses, brewhouses and chocolatiers, the Marshall McGearty Tobacco Lounge in Chicago's eclectic Wicker Park neighborhood offers nine varieties of premium tobaccos rolled into cigarettes on the premises, said Brian Stebbins, marketing director for R.ŸJ. Reynolds Co.
The tobacco giant launched the lounge as a means of promoting its new high-priced cigarette flavors, which have names like the Earl and the Muse. The lounge also sells alcoholic beverages, coffee and appetizers and has been attracting a sizeable before- and after-dinner crowd since quietly opening last month, Stebbins said.
Stebbins resisted comparisons to the coffee chain Starbucks and said it would be premature for the company to consider opening other shops in cities and states with indoor smoking bans.
The lounge doesn't violate Chicago's law because the majority of its sales are of tobacco or tobacco products.
New Jersey's law contains a similar exemption that allows tobacco retail establishments to permit smoking inside their shops. But it remains to be seen whether entrepreneurs can argue the law doesn't preclude them expanding into a lounge-like setting with food and drink.
"A smart businessperson, a creative entrepreneur and a good lawyer might be able to argue for that sort of exception," said Deborah Dowdell, president of the New Jersey Restaurant Association. "I think some businesses are going to see what they can try to do."
Dowdell said she has already heard that some tobacco establishments have begun inquiring about getting licenses to sell food and liquor.
Still, if the law's limits are to be tested, Dowdell thinks it's more likely that the skirmishes will be over requests by restaurants to open outdoor smoking patios, some of which would be walled off with plastic wind barriers.
Her organization has promised to challenge the law in court, arguing the exemptions it offers leave their members at a competitive disadvantage with casinos and possibly other retail tobacco establishments that decide to offer more than Marlboro Lights and non-filtered Camels.
Because the law calls for local health departments to police the smoking ban and because municipalities rule on license requests within their borders, Dowdell fears a patchwork of standards could evolve from community to community.
But Karen Blumenfeld, director of the Tobacco Control Policy and Legal Resource Center for the anti-smoking group NJ GASP, thinks the state law has enough protections to keep new tobacco lounges from opening and existing ones from expanding into quasi-restaurant and bars.
The law defines a tobacco retail shop as a place where at least 51 percent of the sales are of tobacco products or accessories, and where the sale of other items is "merely incidental," Blumenfeld points out.
In other words, any shop that fills its menu with $4 lattes and $15 entrees could have its license yanked for outpacing its cigarette sales.
"I think what needs to be determined is what's the definition of what's 'merely incidental,'" Blumenfeld said.
That definition could be made clearer in regulations the Department of Health and Senior Services must write to accompany the law, rules that will give better guidance to local health departments, Blumenfeld added.
The law also forbids existing cigar bars - places where some food and beverage sales are already allowed - from expanding in size or moving to a new location.
One sponsor, Sen. Loretta Weinberg, D-Teaneck, thinks the law's exceptions are written narrowly enough to prevent a slew of tobacco lounges from opening statewide.
"But if that were to happen, we would obviously revisit the issue," she said.
Although it does not take effect until April 15, supporters are already pushing for an addendum to the law to ban smoking in casinos. That change is being sought to protect casino workers and non-smokers who want to gamble without being harmed by secondhand smoke, said Sen. John Adler, D-Cherry Hill, another sponsor.
Exceptions were made for smoking establishments because non-smokers presumably wouldn't frequent them, Adler said.
"The market responds to needs and to money, but government also responds to problems," Adler said. "If this smoking lounge phenomenon becomes a public health problem for New Jersey, I'm sure the state would review the situation and address it appropriately."
Publications - January 19, 2006
Retailers fume over smokes
By Amaris Elliott-Engel / The Citizen
Untaxed cigarette and gasoline sales take 30 percent off Case Marshall's bottom line.
The vice president of The Pit Stop - a family business that started its first gas station and convenience store in Weedsport in 1984 - said the regional chain of 17 stores is “trying to survive in upstate New York despite all the challenges getting thrown at us.”
So Marshall is both surprised and disappointed by the news this week that Gov. George Pataki has a plan - included in his proposed 2006-07 budget to the state Legislature - to delay by at least a year enforcement of the collection of sales taxes on cigarette sales to non-Indians by Indian enterprises. Under a state law passed last year, the enforcement is slated to start March 1.
“If we could get these changes I think we could work out compacts with the Indian nations and that's always been my goal; and I think it's a feasible goal though the legislation that was passed creates some barriers,” Pataki said at a news conference Tuesday.
“I think justice delayed is justice denied,” said state Sen. Michael Nozzolio, R-Fayette, who shot off a letter Wednesday to the state Department of Taxation and Finance protesting the plan. “What we're saying is how many businesses will have to go out of business? ... They're being given an unfair, artificial and unjust advantage.”
Dan French, an attorney representing Clint Halftown, the tribe's federally recognized representative, said a settlement is still attractive to the nation and should still be attractive to the state because of the money damages awarded to the Cayugas during a jury trial in 2000 determining the tribe deserved compensation for the land's current worth and the loss of two centuries of fair market value.
“The Cayuga Nation supports any and all efforts to settle the long-standing land claim issues,” French said.
The tribe's land claim, including the damages award, are now under appeal to the U.S. Supreme Court. The Oneida Indian Nation had no comment on Pataki's proposal.
Last April, Pataki signed into law the 2005-06 budget requiring the state tax department to develop regulations to collect taxes on Indian enterprise sales on products sold to non-Indian residents. It is unclear if the enforcement of other taxable products will begin March 1. Pataki is also proposing raising the state's cigarette tax from $1 to $2.50 a pack.
Cayuga County Legislature Chairman George Fearon said the proposal to increase taxes on cigarette sales by non-Indians will give consumers even more impetus to continue to make purchases on Indian enterprises through the Internet or through smoke shops.
“Wouldn't it drive more people to just avoid the tax completely?” Fearon said. “And his revenue could just go down. I think his economics don't make sense.”
A study released in November found more than a third of New York smokers regularly avoid the states' high cigarette taxes by buying from Indian reservations, the Internet or duty-free shops. It also found that such tax evasion hampered efforts to curb the rate of smoking.
State Attorney General Eliot Spitzer, the only announced Democratic candidate for governor, supports enforcement.
“Obviously there are legitimate positions on the other side ... but we have to move forward in enforcement tax laws, especially when there is a proposal to increase the tax on cigarettes sold elsewhere because there will be an impact on both black market behavior and illegal sales.”
Tribes contend their sovereignty under federal law means they don't have to collect the state's sales taxes.
In 2003, the state Legislature adopted a law requiring the Pataki administration to collect sales taxes, overriding a veto from the governor in the process. But the governor did not carry through, instead focusing on negotiating agreements with New York tribes to resolve the sales tax issues, land claims and provisions for additional Indian-owned gambling casinos.
In February 2005, Pataki said he would enforce the 2003 law, which was followed by the passage of the 2005 law to put the regulations developed by the state tax department into the books with a March 1 start date.
“This postponement is one of a series,” said David Dresser, a Seneca County lawmaker who is chair of that county's Indian land claim committee. “He has failed to negotiate successfully with the Indians. Meanwhile, not only is revenue lost but the health of our citizens is further threatened and retail establishments continue to go out of business.”
Three gas stations have closed in Seneca County, which Dresser attributed to the presence of the Cayuga Nation's gas station and convenience store on Route 89.
Marshall said he and his convenience store colleagues will raise their opposition to Pataki's proposal when the New York Association of Convenience Stores has its lobbying day later this months.
Marshall hopes he's not the only state resident lobbying state leaders on the issue.
“We really need the taxpayers of the state to put on pressure to say enough is enough,” Marshall said. “We need to collect taxes out there. We're all paying taxes. Why should the select few who choose to ignore this get away with it?”
10 Now - January 19, 2006
Underage smoking law up in smoke
By Caitlyn McVey
For the past month, the village of Canton has been considering a law to prohibit underage smoking. Knowing it would be a difficult ordinance to pass, Mayor Robert Wells asked the New York State Conference of Mayors for advice. And this week, he got his answer.
"The Council has affectively said to us that the state has preempted this area. And legislating it at this level goes beyond our capability seeing as the state has in fact, through its own legislation taking over the regulation of tobacco," said Canton Mayor Robert Wells.
This means only the State of New York can put regulations on tobacco. And if the Village moves forward with a plan to prohibit underage smoking, it could end up in court.
"Let's say we went ahead and people wanted it and supported it and then all of the sudden it would obviously be challenged in the courts and if it was turned down we would be no further ahead," said Wells.
Despite the legal advice given by the New York State Conference of Mayors, the St. Lawrence Tobacco Free Coalition says it still has a strong enough case for the Village to push forward with the ordinance to prohibit underage smoking.
"It still doesn't take care of underage smoking. All it talks about is selling to the kids, they can't be in public, and we shouldn't sell to them on the internet. That's all this says. It doesn't say anything else about underage smoking. So it doesn't address the issue at all it just circumvents it around," said Robert Saidel of the Tobacco Free Coalition.
Saidel says if the state isn't going to address underage smoking, the
local level of government should at least give it a try.
"Albany is not taking care of our problem. We want to start here in Canton, make a statement saying cigarettes, tobacco products are not healthy for our children," said Saidel.
Mayor Wells says the Village is not giving up the fight against underage smoking completely. He says there will still be a hearing to give the public a chance to present the board with other ideas that could help fight the problem.
The hearing will take place Monday night at 6:30 at the Canton Municipal Building.
Inquirer - January 19, 2006
Smoke ban's exemption for casinos challenged
A new assemblyman - and ex-A.C. mayor - says "we should treat everyone the same."
By Elisa Ung
Former Atlantic City Mayor James Whelan yesterday kicked off his legislative career by challenging the casinos in his district.
Whelan, a Democrat who joined the state Assembly last week, introduced legislation that would remove the casino-floor exemption from the new law that bans smoking in all indoor public places.
Smoking ban backers excluded gaming floors as a compromise to win legislative approval. Outgoing Gov. Richard J. Codey signed the ban into law over the weekend.
Whelan said the issue was "pretty straightforward and simple: I think we should treat everyone the same."
"Casino employees are subject to secondhand smoke that other people
in other workplaces are not. That doesn't seem fair."
He also said he was concerned about small businesses such as the Irish Pub off the Atlantic City Boardwalk, whose owner, Cathy Burke, had predicted that the roughly 90 percent of her customers who smoke would move next door and smoke on a casino floor.
Officials with the Casino Association did not return a call yesterday.
A bill similar to Whelan's has also been introduced in the state Senate.
A sponsor, State Sen. John Adler (D., Camden), said he was surprised that much of the smoking ban opposition from restaurant and beverage associations centered on the casino exemption.
"Those of us who are supportive of public health think we can take the next step," Adler said.
Buffalo News - January 18, 2006
Pataki seeks 1-year delay in ending Indians' tax-free cigarette sales
By Tom Precious
ALBANY - Gov. George E. Pataki said Tuesday he will seek to delay for a year implementing a state law that ends tax-free sales of cigarettes by Indian retailers to non-Indians. Legislators, health groups and non-Indian retailers have been trying to have the taxes collected for more than a decade.
Pataki's effort to delay enforcement of the law - due to take effect March 1 - came on the same day he formally proposed a $1-per-pack cigarette tax increase. Critics say delaying the reservation tax collection at the same time the tax is increased is certain to increase tax evasion and bootlegging.
Not surprisingly, Indian leaders praised the two seemingly contradictory proposals, which were contained in Pataki's 2006 state budget plan. Over the years cigarette sales have become a major business for Seneca Nation shops and Internet operations, with smokers from around the state turning to Seneca retailers to avoid state taxes. The governor's new tax plan would take the level to $2.50 per pack.
"The Seneca people commend the governor for his consistent position over the years of recognizing the unique, legal sovereign status of the Seneca Nation," said Seneca President Barry Snyder Sr.
Non-Indian retail groups said the governor is sending mixed messages by raising the tax but not doing more to reduce bootlegging and Indian tax-free sales. "This is an act of breathtaking cynicism," said James Calvin, president of the New York Association of Convenience Stores.
"Let's drive tens of thousands more smokers to the unlicensed, unregulated, untaxed side of the street no matter how harmful it is to public health, state and local treasuries, or neighborhood convenience stores," he said.
Health groups criticized the governor's delay. "It's a mistake," said Russell Sciandra, director of the Center for a Tobacco Free New York. "We think failing to collect the tax will reduce the public health impact of the tax increase."
Buffalo News - January 14, 2006
Governor wants $1 more for cigarettes
New tax would fund anti-smoking effort
By Tom Precious
ALBANY - Smokers would pay an extra $1 per pack as the state sharply
expands efforts to lure New Yorkers away from cigarettes, including pumping
$15 million into research efforts at Roswell Park Cancer Institute.
The tax and anti-smoking initiative will be proposed next week in Gov. George E. Pataki's 2006 state budget.
The new tax - $2.50 per pack - would, if approved by the Legislature, be the nation's highest. For the state's 2.7 million smokers, it could raise the cost of some packs of cigarettes to nearly $7. The tax hike would apply only outside New York City, where the tax rate is already at $3 per pack.
"We believe, strongly, that raising the cigarette tax diminishes smoking, especially among young people," said John Cape, the governor's budget director, who confirmed Friday the tax increase will be a part of the governor's budget proposal set to be released Tuesday.
The tax would bring in $308 million this year.
Health groups - for years criticizing Pataki for a lack of commitment to anti-smoking efforts - praised the get-tough campaign against the tobacco industry and the tax hike.
The Center for a Tobacco Free New York estimated the higher tax and new prevention efforts will reduce smoking rates in New York by a third by 2010, meaning a million fewer smokers.
"This is huge," said Russell Sciandra, the group's director.
Donald Distasio, chief executive officer of the American Cancer Society's eastern division, said the tax hike effectively prices cigarettes as too steep for many smokers, especially teenagers.
"This really isn't a tax," he said. "It's a rebate for health."
But the Pataki administration was silent Friday on whether it will enforce state law requiring the collection of taxes on cigarette sales by Indian retailers to non-Indians. If it doesn't begin the collection effort, non-Indian retailers say an even higher state tax would further encourage tax-free sales by Seneca Nation and other tribes.
Cape said the revenue estimate for the higher tax is based on current collection efforts - a statement that worried non-Indian retail groups who fear the Pataki administration will, as it has done in the past, ignore a law passed by the Legislature to force collection of the taxes on Indian sales.
Cape declined to say what will happen March 1 - when the state Tax Department is supposed to start collecting taxes at the wholesale level on cigarettes sold to Indian reservations.
"As far as we're concerned, any discussion of cigarette tax revenue in this budget ought to focus exclusively on collecting the taxes they've been letting escape all these years," said James Calvin, executive director of the New York State Association of Convenience Stores.
"The status quo is one thing. It's one thing not to do anything. It's quite another to make the situation worse," he said.
The Pataki administration as recently as last week was considering a $1.50-per-pack hike to equalize the rate across New York. The statewide level is now $1.50 per pack. New York City charges an additional $1.50 per pack in local taxes.
The new plan would set a statewide rate of $2.50 per pack, while allowing New York City to charge 50 cents per pack on top of that. That plan would mean New York City would be losing revenues because it would see its local tax drop from $1.50 to 50 cents.
But Cape said the state would make New York City whole - about $50 million this year - for the tax loss.
The state Assembly has backed cigarette taxes in the past. But the GOP-led Senate this week said it was opposed to any tax increases this year.
After giving New York City its $50 million, the state would get about $260 million this year. It will move $55 million of that into a tougher, anti-smoking and prevention effort. The nearly $100 million to be spent by the state this year would be the nation's highest and meet what federal health officials say is what the state should be spending on anti-smoking efforts.
The plan calls for $15 million in new funding to go to research efforts at Roswell Park.
But Lisa Damiani, Roswell's lobbyist, said the money would go to Roswell's overall research efforts and not specifically the tobacco-control programs.
The tobacco industry said New York should be prepared to see an increase in tax evasion by smokers if the governor's proposal is accepted.
Country Today - January 13, 2006
Police harass smoke shop in prelude to tax crackdown
By Jim Adams
POOSPATUCK RESERVATION, LONG ISLAND, N.Y. - Police cruisers from Suffolk County have been ringing inlets to the Unkechaug Indian Nation reservation since mid-December in an open attempt to drive away customers of the tribe's four smoke shops.
The siege has raised tensions among the 450 tribal members, 250 of whom live on the 55-acre reservation near Mastic.
Unkechaug Chief Harry Wallace called the campaign the opening wedge for enforcement of statewide taxation of reservation sales to non-Indians, scheduled to go into effect March 1. ''They're practicing,'' he told Indian Country Today.
New York Gov. George Pataki suspended the last state attempt to tax reservation sales in 1997, after widespread resistance from tribal members closed interstate highways and led to violent confrontations with state police. The Unkechaug and Seneca nations are credited with sparking the resistance. After lobbying by convenience store and gasoline station associations, however, the state Legislature in 2003 passed a law over Pataki's opposition reviving the reservation tax regulations.
Although state officials have been preparing for months to enforce the regulations, they have distanced themselves from the local action against the Unkechaug, one of the two state-recognized Algonquin tribes of eastern Long Island. But Suffolk County District Attorney Thomas J. Spota has drawn the connection.
Uniformed Suffolk County officers have handed out leaflets stating - inaccurately, say tribal officials - that ''the possession of untaxed tobacco is ILLEGAL!'' The leaflets bear the seal of the Suffolk County district attorney and its police department and go on to say that penalties for possessing and transporting untaxed tobacco include jail time, fines and seizure of the vehicle. At the bottom they state: ''In cooperation with: New York State Department of Taxation and Finance.''
''The flyer misstates the law,'' retorted Wallace. ''It is inaccurate and purposefully vague.''
Although Spota has told the press he is cracking down on illegal bulk resale of the untaxed cigarettes, Wallace said that he was also intimidating lawful trade. ''Ninety-nine percent of our customers come in to purchase cigarettes for their personal use,'' he said, ''which is not illegal in New York.''
The tribe has countered with its own flyer, charging that ''the tactics of the Suffolk County Police Department in cooperation with the New York State Department of Taxation and Finance is designed solely to intimidate and harass lawful citizens.
''Instead of trying to intimidate us, they should work with us to make sure NO crime is committed.''
A spokesman for state Attorney General Eliot Spitzer said his office was not involved in the Suffolk County action. But Spitzer, a likely Democratic candidate for governor this year, has quietly been making his own preparations to enforce the tax regulations.
Late last April, he began a probe of the state's cigarette stamp agents, licensed wholesalers who pay the $1.50 per pack state excise tax by buying stamps from the state and affixing them to the packs they then sell down the distribution chain. The 20 or so stamp agents also sell untaxed cartons to exempt organizations, such as Indian reservations. State law names nine reservations, those of the federally recognized Iroquois nations and the state-recognized Unkechaug and Shinnecock of Long Island.
Spitzer originally said he was concerned with Internet and mail-order sales, and the danger that cigarettes would fall into the hands of minors or fail to be ''fire-safe.'' His press releases avoid mention of reservation sales. But a recent enforcement action draws a direct link to the upcoming tax regulations.
On Nov. 7, Spitzer released an assurance of compliance with Harold Levinson Associates Inc. of Farmingdale, one of the largest stamp agents. In paragraph 21, it specifies that if the regulations go into effect as scheduled on March 1, ''HLA shall not sell any Unstamped Cigarettes to any Indian Nation, Tribe or member thereof.''
Under the regulations, the tax department would provide tribes with coupons for the estimated cigarette consumption of their smoking members. Tribal smoke shops would turn in these coupons to the taxing agents for a rebate on the tax.
The Department of Taxation claims this scheme passed muster with the U.S. Supreme Court in the 1994 New York Department of Taxation v. Milhem Attea & Brothers case. The Pataki administration has also offered an alternative of negotiated tax compacts with reservations, but this approach dropped from sight in the general collapse of land claims settlements last year.
Instead, the most visible harbinger of the upcoming tax deadline is the line of Suffolk County police cruisers that drew up with flashing lights on the Poospatuck reservation boundary in mid-December. Wallace said he has worked to keep tribal members calm and avoid confrontation. Only one Unkechaug member, Ernestine Watkins, has been arrested so far, on a charge of hitting a police officer's leg with her car.
Watkins will face charges of reckless endangerment, said the Spota's office. She is scheduled for arraignment Feb. 16 at the 1st District Court in Central Islip. Watkins' husband owns Monique's Smoke Shop on the reservation.
Watkins said she will fight the charge through the courts. Even if the prosecutors offer an easy way out, she said, "I'm not going to drop it."
Wallace said the tribe is examining legal action against Suffolk County officials.
Press - January 13, 2006
State may up tax on smokes
ALBANY- Gov. George Pataki proposed Friday a $1 spike in New York's cigarette tax, bringing the total price on a pack to about $5.50 outside New York City. The move would result in the highest cigarette tax in the country.
Under the proposal, the statewide tax would rise to $2.50, up from the current $1.50.
If Pataki's proposal is approved, New York City would lower its tax by $1 to keep taxes on cigarettes there at $3 per pack, according to Pataki's office. The typical total price of a pack there would remain $6.
“This isn't just supporting (health care) programs, but we believe strongly that raising the cigarette tax diminishes the desire to smoke among young people,” said John Cape, the state budget director.
The state Senate stands by its opposition to any new taxes, announced earlier this week, said Mark Hansen, spokesman for Senate Majority Leader Joseph Bruno.
The new tax would generate $260 million in its first year. Of that, $55 million would go toward anti-smoking initiatives, including $15 million for the creation of a cancer research center.
“The public health implications of this is just going to be incredible,” said Russell Sciandra of the Center for Tobacco Free New York.
Over five years, the new tax and additional funding will translate to 1 million fewer smokers in New York state based on the experience of other states and previous tax increases, he said.
Oneonta Daily Star - January 12, 2006
Senate GOP won’t back higher cigarette tax
By John Milgrim
ALBANY — A proposal to raise state cigarette taxes by $1.50 per pack won’t fly in the Republican-led Senate, its leadership said.
Sen. Majority Leader Joe Bruno said Wednesday in a statement that his conference would oppose any tax increases. That includes Gov. George Pataki’s plan to raise the cigarette excise tax for sales outside New York City, his staff said.
"A tax increase is a tax increase," Senate spokesman Mark Hansen said of the proposal. "We do not want the governor to include any of them in the budget."
The Pataki administration last week confirmed it is considering doubling the state excise tax to a nation-leading $3 per pack for cigarettes sold outside New York City. The figure would match total excise taxes in the city, which include $1.50 in state and $1.50 in city taxes.
There is also a 39-cent federal excise tax.
Sen. John Bonacic, R-Mount Hope, said a Pataki proposal to raise any taxes after forecasting a $2 billion budget surplus makes no sense.
"We should not be imposing any new taxes on the hard-working families of the state," Bonacic said. "I don’t think it’s a good idea, the cigarette tax or any tax."
The proposed tax is designed more to discourage smoking than to boost state revenue, according to state Budget Director John Cape.
Sen. James Seward, R-Milford, said he believes higher excise taxes would drive more smokers to buy packs outside the state or from tax-free Indian reservations, and could mean less revenue to the state overall.
"They are not only hurting the state’s revenue, they are hurting legitimate New York businesses," Seward said. "I just see big problems with raising the tax to the extent that is being suggested."
Anti-smoking advocates said the Senate’s stance will make it harder for them to push through a new smoking policy that would cut tobacco consumption and reduce health-care costs.
"It looks like we’ve got our work cut out for us," said Michael Bopp, New York advocacy director for the American Cancer Society.
Bopp credited the city’s high cigarette tax for its lower smoking rate, which he believes contributed to a 14 percent drop in fatal heart attacks from 2003 to 2004.
Meanwhile, leaders of the state Assembly, which is controlled by New York City Democrats, would not rule out supporting a cigarette-tax increase for the rest of the state.
"We’ll look at what the governor proposes," spokesman Skip Carrier said.
Country Today - January 12, 2006
New York's tax attack gears up
by Editors Report
After years spent dreaming of casinos, New York tribes are finding that a threat to their basic sovereignty has crept up on them while they napped. The Suffolk County police siege of the Poospatuck reservation opens a state attack on Indian tax sovereignty which could unravel a decade of economic and social progress.
Under orders from the state Legislature, Gov. George Pataki's administration is preparing to impose tax regulations on reservation sales that it first tried to enforce in the mid-'90s. New York Indians might have thought they defeated this measure in 1997; but it is back again, due to take effect March 1.
The grass-roots Indian rebellion of spring 1997 is one of the stirring episodes of modern tribal history. Although a number of tribal leaders had signed tax compacts with the state, two tribes - the Seneca and the Unkechaug - held out. Protests spread, closing interstate highways. Clan mothers chastised leaders who had compromised. The Mohawks joined in. As state police lost control, beating women and children at Onondaga, Pataki backed down. At the end of May, he flew to Buffalo to make a dramatic speech promising respect for tribal sovereignty. In spite of a U.S. Supreme Court decision upholding the regulations drafted by his Department of Taxation and Finance, Pataki said the state would no longer attempt to tax reservation sales, whether to Indians or non-Indians.
It was a wise policy and a great victory, not only for the tribes but for the best instincts of the Republican Party. Reservation tax sovereignty happened to mesh nicely with the party's ''supply-side'' economics, which sought economic growth through tax reductions. During the decade that followed Pataki's speech, entrepreneurs flourished on the reservations that were open to them, and Indian governments with commercial acumen built up their own enterprises. The tribes launched hundreds of small businesses and created thousands of jobs, for the most part without help from casino revenues. Republicans, inspired by Jack Kemp, simultaneously tried to spur economic growth in tax-free districts they called Empire Zones, but their results paled beside the success on the reservations.
Yet Republicans now seem eager to destroy their one successful social program, the one policy that has helped bring hope and prosperity to what was once the most oppressed and impoverished population on the continent. Pataki argues that the state Legislature tied his hands. Under lobbying by convenience store and gas station associations, the narrowest of special interests, both houses passed a law demanding taxation of the reservations. Pataki vetoed it once, but his protests ring hollow. For years, his negotiators have worked to reverse his one wise deed, demanding tax concessions whenever possible as they worked out deals on land claims and gaming compacts.
It should be said that Democrats haven't been any better. The House, controlled by Democrats, pushed for the tax regulations as hard as the Republican Senate. Democratic state Attorney General Eliot Spitzer has steadily tightened the noose on reservation economies. He has been pressuring credit card companies and delivery services not to process Internet sales of cigarettes, a major business on the Seneca reservations: and now he is turning the screws on cigarette distributors not to supply unstamped cigarettes to the reservations themselves. He hasn't mentioned Indians in his frequent press releases, perhaps to avoid roiling his upcoming campaign for governor, but the legal documents make it crystal clear that he is preparing a crackdown when the tax goes into effect March 1.
The tribes are divided and poorly prepared for the onslaught. The Seneca have done the most, with a public relations campaign focusing on their own treaties. But their businesses are reeling from the Internet crackdown. The Unkechaug are facing harassment from the Suffolk County district attorney, a campaign that looks a lot like part of a master strategy. It's no coincidence that Unkechaug Chief Harry Wallace, a trained lawyer committed to tribal sovereignty, was one of the main leaders of the 1997 resistance. Other tribes have been diverted by their quest for casinos. Some emigre Iroquois tribes sold out the tax struggle entirely, accepting state taxation as the price for regaining territory in the state and a slice of the potential gaming market. In that sense, the collapse of their land settlements last year now looks like a blessing. As once-steadfast Haudenosaunee nations increasingly make assessments based on percentages rather than principles, their very existence as the originally free and inherently independent peoples of their own lands is jeopardized.
Even the St. Regis Mohawk (Akwesasne) accepted a weak deal in attempting to protect their thriving reservation businesses. They gave up tax sovereignty over their potential Catskills casino in return for a promise that the state tax department would ''take into account'' their self-regulation of their cigarette and gasoline sales in the Akwesasne homeland. This deal was supposed to produce a commercial treaty in lieu of the tax regulations, but the Legislature never passed the bill providing for that process. And the state showed bad faith from the get-go, demanding to tax big-ticket reservation sales like cars and boats.
The tribes that let the tax issue lapse in their dreams of casinos can now awaken to the irony that the only newly opened gaming facilities in the state belong to the Seneca Nation, which steadfastly refused to make any concessions on its tax sovereignty. The Seneca position should have been the template for all the other tribes, and it shows the true intentions of Pataki's negotiators that they tried to get as far from it as possible in all their other settlements.
It will take a supreme effort for the New York tribes to regain the spirit of '97, but they have little choice if they are to protect the gains of the last decade. The evidence is that tribes that compromise their sovereignty to get casinos usually wind up with neither.
Star Ledger - January 10, 2006
Assembly votes indoor smoking ban
Gambling areas at casinos are exempted from the bill
By Tom Hester
NJ - After debating on and off for 10 years, the Assembly yesterday overwhelmingly approved legislation to ban smoking in indoor public places such as restaurants, bars, bowling alleys, private clubs, bingo halls and enclosed shopping malls.
Gov. Richard Codey plans to sign the bill before he leaves the governor's office next Tuesday, and it would take effect in 90 days.
"This is a great day for public health in New Jersey," Codey said following the vote.
Assembly members voted 64-12 with 2 abstentions, ignoring opponents' pleas that it would hurt small business owners and is an example of government tampering with individual choice.
Opponents also complained the measure is discriminatory because it exempts the gambling areas of the 13 Atlantic City casinos. They also argued the legislation is unnecessary because 67 percent of New Jersey's 22,000 restaurants are already smoke-free.
Proponents, including Codey, maintain the ban is needed to protect workers and the public from second-hand smoke.
"A family trying to enjoy a nice meal, or a worker trying to make a living, should not have to be put in harm's way to do so," Codey said. "With all of the facts we know today, we need to do whatever we can to protect our workers and patrons from being exposed to the dangers of second-hand smoke."
The Senate approved the measure 29-7 on Dec. 12. New Jersey would become the 11th state to ban smoking in indoor public places, joining, among others, New York and Delaware.
But opposition to the smoking ban may not have been snuffed out yesterday. The New Jersey Restaurant Association is considering going to court to argue the legislation is discriminatory because it does not include casino gambling areas or cigar bars and lounges, and therefore does not provide equal protection under law.
"The Restaurant Association has its attorney looking into the discrimination issue," said Barbara McConnell, director of the New Jersey Bar and Tavern Association. "If this issue goes to court, we will join. We would clearly lose a lot of business."
McConnell said she would also expect bowling alley operators to also join any litigation. Restaurant Association officials were not available for comment.
Assemblyman Joseph Cryan (D-Essex), a former restaurant operator whose brothers and sister run Cryan's restaurants in West Orange and Branchburg, was the most outspoken opponent of the legislation. He confirmed that in the Democratic caucus, he unsuccessfully proposed two amendments, one that would eliminate the casino exemption, the other more extreme, to ban smoking entirely in the state.
"It was the will of the caucus that the bill pass as is. It was a spirited and lengthy debate," he said. "I argued on behalf of small business, individual choice, and the merits of not standing up for big business."
Four Democrats and four Republicans spoke on the floor in favor of the smoking ban and one Democrat and five Republicans rose to oppose it.
"This is the most important piece of legislation I have worked on in the last 10 years," said Assemblyman Reed Gusciora (D-Mercer), a prime sponsor of the bill, S-1926. "Today we take a major step toward promoting public health in New Jersey."
The no votes were cast by nine Republicans and three Democrats, including Assemblyman Jeff Van Drew (D-Cape May), chairman of the Assembly Tourism and gaming Committee, which deals with the casinos. Two Republicans abstained.
Post-Standard - January 7, 2006
Pataki considers extra $1.50 cigarette tax
By Erik Kriss
Smokers could face a doubling of the state cigarette tax under a provision Gov. George Pataki is "seriously" considering including in his upcoming budget proposal, according to administration officials.
Pataki made much about cutting income and business taxes and eliminating the estate tax during his State of the State speech Wednesday.
But there was no mention of the possible $1.50 per pack cigarette tax hike, which could be part of the 2006-07 budget Pataki proposes to state lawmakers Jan. 17. Administration officials said Pataki is giving "serious consideration" to including the tax increase in his budget proposal.
Such an increase would bring the excise tax on cigarettes to $3 per pack. That's in addition to a federal 39 cents per pack excise tax and state and local sales tax, and it would bring the total cost of an average pack of cigarettes to $6 or more.
A leading anti-smoking advocate praised the idea.
A smokers' rights group and a local state senator panned it.
And the head of the state convenience store association claimed it won't work - and would harm store owners.
"We think it's a wonderful idea," said Russell Sciandra, director of the Center for a Tobacco Free New York. "As the previous tax increases have had, this would have a big, positive impact on public health.
Thousands of people would stop smoking. And if they (the state) take 10 percent of the revenue to increase funding for the tobacco prevention program, even more people would quit."
A smokers' rights group, noting Pataki administration officials have talked about the move as a health policy decision rather than a revenue-raiser, called it unfair and potentially counterproductive.
"It reeks of socialism," said Audrey Silk, founder of the group Citizens Lobbying Against Smoker Harassment.
If administration officials want to end smoking, "then I challenge them to just outlaw tobacco in New York state," Silk said.
Sen. John DeFrancisco, R-Syracuse, also frowned on the potential tax hike.
"This type of process is very dangerous, because what's the next thing government might try to discourage?" said DeFrancisco, who explained his previous votes in favor of cigarette tax increases by saying they were wrapped into much larger budget bills.
"I just think at some point the use of taxation to create behavior that's desired by the majority is not the way to go, and I think we've already gone very far in taxing this particular commodity to make people behave in a certain way," DeFrancisco added.
But the senator acknowledged that "the more you can reduce smoking, the more you can reduce all kinds of medical problems."
Sciandra agreed. "Some people will complain," he said, "but if you're going to raise a tax, this is the tax to raise, as the governor has found himself. There is not a political price for doing this."
Silk said there could be an economic price.
"What they're doing is hastening the road to the black market, and the money they'll eventually have to spend on law enforcement to catch the black marketeers will have to be taken out of the social service programs," she maintained.
James Calvin, president of the New York Association of Convenience Stores, agreed, saying more smokers will buy cigarettes from Indian vendors, Internet merchants or bootleggers.
"More smokers are driven to the tax-free side of the street, and that costs legitimate licensed small retailers hundreds of millions of dollars a year in lost sales," he said.
"It also puts all of those cigarette purchases beyond the reach of state regulations that are designed to detect and punish sales to minors," Calvin added. "It defeats the public policy objective of getting people to stop smoking by making it too expensive through exorbitant taxation."
Sciandra said econometric models show that every 10 percent increase in the total price of cigarettes drives down adult consumption by 3 percent to 5 percent and teen consumption by 6 percent to 7 percent.
He noted that smoking in New York City dropped by 11.5 percent from 2001 to 2003, when taxes on cigarettes there grew by 32 percent.
Calvin noted state law requires the Pataki administration to begin collecting taxes on cigarettes Indian merchants sell to non-Indians March 1. Pataki has backed away from previous efforts to collect those taxes.
Mark Emery, a spokesman for the Oneida Indian Nation, said most people who buy cigarettes tax-free purchase them online.
The Oneida Nation runs more than a dozen outlets that sell cigarettes, all within a few miles of one another, but does not sell cigarettes online.
The increased state excise tax would only apply outside New York City, which already has its own $1.50 per pack excise tax. The state increase would bring the rest of New York in line with New York City.
and Sun Bulletin - January 7, 2006
Pataki looks to double cigarette tax
Governor's plan would raise levy to $3.39 per pack
By Jay Gallagher and Nick Reisman
ALBANY — Gov. George E. Pataki may propose doubling the state tax on cigarettes to $3 a pack outside New York City in an effort to discourage smoking as well as to raise about $550 million a year, officials said Friday.
The hike, which Pataki could propose in his budget address later this month, would bring the total tax on cigarettes to the same level as it is in New York City — $3.39 a pack. The other 39 cents is a federal levy.
"This would have tremendous public health benefits, especially if they use it for tobacco-prevention programs," said Russell Sciandra of the American Cancer Society.
The state now spends about $40 million a year on the programs, while the national Centers for Disease Control and Prevention recommends that the figure be $98 million, based on the state's population of 19 million people.
Pataki also plans cuts in income, business and estate taxes as he puts the finishing touches on a budget plan he is expected to submit to the Legislature on Jan. 17.
Besides looking at the revenue potential of the tax hike, state officials looked at the fact that the smoking rate among adults in New York City has been going down faster than in the rest of the state since the last time tobacco taxes were raised in 2002.
About 16 percent of adults in New York City, or about 885,000 people, smoke, Sciandra said.
Outside the city, the figure is about 23 percent.
"Smoking rates are going down throughout the country," Sciandra said. "They're going down faster in New York."
Before the U.S. Surgeon General issued a report in 1964 tying smoking to significant health problems like lung cancer and heart attacks, more than one-third of New Yorkers, including half of all males, smoked regularly, Sciandra said.
The possibility of much higher prices for cigarettes didn't sit well with one advocate for smokers.
"It's not to raise revenue, it's a social policy," said Audrey Silk of Brooklyn, head of an organization known as New York City Citizens Lobbying Against Smoker Harassment. "They should stop pussy-footing around and make cigarettes illegal in New York if that's their intention."
But the idea got an endorsement from a man Friday smoking outside the Albany Public Library not far from the Capitol.
"I think that's a good idea. People might no longer want to smoke," Frank Haas said between puffs on a cigarette. Haas said he's smoked for several decades and doesn't intend to stop.
"One of the things budget people like about tobacco tax is it's very predictable," Sciandra said. Although higher taxes slowly erode the number of smokers, many, like Hass, "are just going to keep on smoking."
Herald-Record - January 6, 2006
Tax man targets smokes
Taxes would total $3.39 per pack in N.Y.
By John Milgrim
Albany - The price of a pack of cigarettes would go up by $1.50 under a tax proposal being considered by the Pataki administration.
The plan, which is being considered as part of the 2006-07 state budget, would bring the price of cigarettes in line with prices in New York City and would make New York state's cigarette excise tax the highest in the nation. It would bring the cost of state and federal taxes - together - to $3.39 per pack.
"We don't see it (a new cigarette tax) as a revenue source, we see it as a policy tool," said state Budget Director John Cape. "It's really a policy tool to cut smoking." The new tax would be imposed on top of the current $1.50 state excise tax and would only be imposed outside New York City.
Anti-smoking advocates welcomed news of higher-priced cigarettes.
"Any time you raise the price you are going to drive down consumption, as we saw in New York City," said Russell Sciandra, director of the Center for a Tobacco Free New York. "The smoking rate in New York City has fallen dramatically since they initiated the tax increase."
The state's cigarette excise tax was last increased on April 3, 2002, from $1.11 per pack to $1.50, making it the highest cigarette tax in the nation at the time. Earlier that year, a 39 cent-per-pack federal excise tax went into effect and later that year, the city tacked on its own $1.50 tax. However, state cigarette tax collections dropped from $1.45 billion for fiscal 2001-02 to $1.12 billion the following year. State officials expect to collect about $962 million in cigarette excise taxes for the fiscal year ending March 31.
Also, any increase in excise tax would automatically increase the sales tax.
Philip Morris spokesman Bill Phelps said, "We believe that excessively raising cigarette taxes does little to solve the government's fiscal problems, is unfair to adults who smoke and could lead to a number of unintended consequences."
He said a hike would encourage smokers to evade taxes by crossing state lines or buy cigarettes tax free from Indian reservations or over the Internet.
States that now have higher cigarette excise taxes than New York include
Rhode Island at $2.46 per pack, New Jersey at $2.40 and Michigan at $2.
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