Inside the humidor, where Edleez Tobacco displays more than 150 brands of cigars. Photo: Matt Allinson

ALBANY, N.Y. – On Aug. 1, Lee Zyniecki will begin selling some of the most expensive tobacco in the U.S., and she is not happy about it. The owner of Edleez Tobacco in Albany fears new state tobacco taxes will drive away her customers and burn her profits.

Zyniecki, 80, and her family have operated their store for nearly 30 years. Her business sells various tobacco products including expensive cigars and pipe tobacco. One cigar on her shelf, a Padron Maduro 1964 Anniversary Series, costs $17.60. Next month, that cigar will cost $21.10, with more than $9 of the new price stemming from the new state tax.

As part of the state budget measures signed on June 21, the State of New York will increase taxes on non-cigarette tobacco products to 75 percent of the wholesale price, beginning in August. Previously, these products were taxed at a rate of 46 percent. But, with New York currently facing a $9.2 billion budget deficit, lawmakers voted in the new taxes to help close the gap. Robert Megna, budget director for the state, said this will add $290 million to state revenue. Proponents say these taxes benefit the state by reducing smoking rates and health care costs, while opponents say they foster a black market and disproportionately affect low-income citizens.

New York State will have the fourth highest non-cigarette tobacco tax in the nation, behind Rhode Island, Utah and Vermont. The state also increased cigarette taxes by a flat $1.60.  The $4.35 per-pack tax is now the highest in the nation, according to the Campaign for Tobacco-Free Kids.

“With those kinds of charges, more people will buy from neighboring states,” Zyniecki said. New Jersey and Massachusetts tax cigars and pipe tobacco at a rate of only 30 percent.  She also said the taxes will gouge customers already affected by the poor economy.

Others would welcome the price hike and the possible reduction in smoking they hope it will cause. The New York State Department of Health has been producing anti-smoking advertisements targeting the 16.5 percent of Albany Country residents and 17 percent of statewide residents who smoke. The American Cancer Society spotlights the habit as the nation’s leading cause of preventable death and points out that every 10 percent increase in the price of cigarettes leads to a 7 percent decrease in youth smoking. From a financial standpoint, the Center for Disease Control and Prevention estimated that each year, smoking costs the nation $96 billion in direct health care costs and lost productivity.

Regarding the claim that tobacco taxes disproportionately affect low-income people, the Campaign for Tobacco-Free Kids says these citizens also stand to gain the most from lower health care costs.

Health benefits aside, Assemblyman Michael Benjamin, a Bronx Democrat, insisted the taxes would fuel the black market. Although he voted for the measure, he said it provides greater incentive for smugglers.

Zyniecki said smokers are an easy political target, and she criticized state politicians. “They are slowly putting us out of business,” she said.

Most of all, the store owner feels sorry for customers who are retired and who live on a fixed income. “I would like to hand them tobacco at no charge,” Zyniecki said, “But we couldn’t stay in business if we did that.”

She said some of her regulars have been enjoying cigars and pipes for half a century; they lost their stocks or pensions, and now the taxes will force them to reduce their purchases or quit altogether.