FARMVILLE – Town Council voted to proceed with an advertised budget containing a proposed 27-cent per pack cigarette tax, in addition to increased water and sewer tap fees and a boost in the price of new grave openings at Westview Cemetery.

A public hearing will be held on the proposed 2013-14 Town budget at 6:30 p.m., prior to council's June 12 meeting, as well as the ordinance needed to establish the cigarette tax and ordinance amendments related to the tap fees and grave costs.

But voices were already raised against the cigarette tax Wednesday night during the public comment portion of Town Council's regular May meeting.

Representatives of the retail community warned that the cigarette tax would hurt their businesses and, despite the opposite intention, negatively impact the Town's tax revenue as a consequence.

The Town's cigarette tax, if created, would simply see cigarette sales migrate beyond the Town's corporate limits and its taxing authority, the retailers told council members.

Town Council subsequently voted, however, to proceed with an advertised budget containing the cigarette tax, though it was noted that council could still decide to cut the tax out of the budget that is ultimately adopted.

James L. Thompson, of Bedford, area sales manager for Stop-In Food Stores, spoke from his 42 years of experience as a sales manager, telling council, “I've been through this exercise quite a few times. I've got a few situations that you can learn from.”

Vinton, like Bedford, has gone through the same situation, he said, “and all the independents (retailers) flocked to get out of town and get on the outskirts so they could sell cigarettes cheaply. We had two rather large stores in Vinton (and) we sold them to an independent and got completely out of Vinton…

“…I can pretty much guarantee you that every time a locality increases taxes on cigarettes you're going to find your tax revenue will eventually go down,” Thompson said, “because, in your situation here, I know you've got a lot of little independents in town. You put a cigarette tax in and they're going to move out of town and all your cigarette sales are going to be sucked, just like Vinton, all the cigarette sales in Vinton were just sucked right out of the Town of Vinton.

“So, as you can see, it sounds like a great idea to increase your revenue by a cigarette tax,” he continued, “but down the road you're going to see your tax revenue go down the tubes.”

Cigarette sales, he advised council members, are probably 40 percent, if not more, of a convenience store's sales. A cigarette tax, therefore, would put “a kinker” into any business in town that sells cigarettes, Thompson warned.

Jeffrey Wilson, general manager of the Farmville Sheetz store, also spoke against the proposed cigarette tax.

Noting his 10 years in the convenience store industry and the probability that Sheetz is “probably the leading retailer of cigarettes in Farmville and we do want to provide as much tax revenue as we can,” Wilson told council, “my store, alone, we do 18,000 to 20,000 packs per week…For us, locally, that is almost 50 percent of our business, when it's broken down in dollars.”

Sheetz notices, and he does too, everywhere there is a tax increase “business does suffer. Lynchburg City, where I was previously, again the Sheetz locations outside of the city limits will do eight to 10 times the cigarette volume as the Sheetz stores inside the city limits.”

In addition, he noted, cigarette purchasers are also buying other things, which also affects tax revenue for localities.

Jean Williams, a Green Bay resident, operates a business in Farmville , J W's Express, and said, “I do want to make you aware that I agree with (Thompson and Wilson). A large percentage of the people who come through my door come for the main purpose of buying cigarettes. While they're there they make other purchases. If they have to start paying extra money for their cigarettes they're going to go somewhere else. They're going to take their business for the cigarettes and their other items somewhere else. If that happens, it's going to really hurt my business. I'm going to need less employees, so there's going to be more unemployment.”

If a person smokes one pack per day, Williams continued, “they're going to be paying $98.55 extra a year in taxes. If they smoke a carton a week, they're going to be paying $140.40 more a year in taxes. That's pretty steep for an individual…”

Williams is also concerned that a cigarette tax would affect her ability to get special deals on cigarettes from vendors who come through town.

She also said she would have to find another main source for her cigarettes because her current supplier will not buy the tax stickers from the Town of Farmville.

As originally proposed by the Town, wholesalers would buy the tax stickers from the Town and apply them to the individual packs of cigarettes, keeping two cents per pack for doing so.

But Town Council is adapting its position, in light of these facts, and intends to also allow such retailers to apply the tax stickers themselves and also receive the two cents per pack.

A fourth retailer, also opposed to the cigarette tax, arrived too late to speak.

When discussing the budget hearing/adoption schedule, Mayor Sydnor C. Newman, Jr., asked, to confirm, “that we could drop” the cigarette tax.

“You could always do away with it at the last minute,” Town Manager Gerald Spates confirmed, “and reduce your budget. You can change it. If you want to. That's entirely up to council.”

Town Council's budget committee recommends the budget with the proposed cigarette tax, water and sewer tap fee hikes, and rise in grave opening fees.

The public hearing, again, is 6:30 p.m. on June 12.

Resident Parking Concern

Among other items discussed during council's meeting Wednesday night, following an objection to the Town's $5 resident parking fee by Buffalo Street resident Carol Hurley, Town Council referred her request to its street committee for possible action.

Spates had urged council to comply with Hurley's request then and there and remove Resident Parking from in front of her house, but council wanted to consider the issue more broadly.

Hurley doesn't believe the $5 fee is fair and noted she never asked for Resident Parking.

Resident Parking is designed to ensure residents can park in front of their homes.

Hurley said the policy was unnecessary in front of her home, that she can always find a spot to park near her home, and she presented a petition concurring with her feelings signed by four of her neighbors.