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Smoking fee burns businesses

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Smokers will have a new incentive to quit starting Thursday, when the cost of a pack of cigarettes in San Francisco increases 20 cents.

Money generated from the new city fee will pay for cleaning up cigarette butts that are illegally discarded on streets and in gutters, Mayor Gavin Newsom said Tuesday.

Smokers already pay an 87-cent state tax for cigarettes. A federal tax increased 62 cents April 1, bringing the total to $1.01. Some packs cost as much as $7 in The City.

Newsom originally proposed a 33-cent fee, but reduced it to 20 cents after a final study found that the cost to clean up butts was lower than expected. The City spends $7.5 million annually on cleanup, a Health Economics Consulting Group study said.

Businesses and residents aren’t pleased with the price increase. Some smokers say the market, not the government, should dictate cigarette prices. Business owners fear that folks will travel outside The City for their packs — or, at least, will stop shopping at their store — due to the added fee.

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“It’s no good. We’re going to lose business,” said Ali Mohammed, 26, the manager of New York Tobacco on Grove Street near the Civic Center.

Not only will sales decrease, Mohammed said unwitting customers will blame shopkeepers for the price hike.

The Board of Supervisors unanimously embraced the new fee in July as a way to help The City close one of its largest deficits in history.

Newsom said Tuesday that California is 32nd in the nation in tobacco taxes. The last state tax increase was in 1998, he said.

“The fact is, taxpayers shouldn’t be burdened with the cost of [cleaning up cigarette butts],” Newsom said, adding that the butts account for the most litter on streets and beaches nationwide.

Under state law, San Francisco cannot tax cigarettes, but it can charge a fee to recoup costs incurred by trash cleanup.

Newsom is also considering a new fee on large retailers who sell calorically sweetened beverages such as soda, saying studies show that they cause obesity-related diseases that weigh on city health care costs.



Burning up wallets

Price of cigarettes purchased in The City is increasing:

20 cents New city fee for packs of cigarettes sold in San Francisco

87 cents Cigarette tax in California

$3.46 Cigarette tax in Rhode Island (the highest in the nation)

$1.01 Federal cigarette tax

30.6 million Approximate number of cigarette packs sold in San Francisco in 2008

Source: City of San Francisco



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