Town Council Lights Up A Cigarette Tax

Published 4:02 pm Thursday, June 13, 2013

FARMVILLE – A cigarette tax was approved Wednesday night by Town Council following a public hearing at which no residents of the Town of Farmville spoke.

Representatives of several town retail businesses did express their opposition, however, to the 27-cent per pack of 20 cigarettes tax that will take effect on October 1.

The six speakers predicted the tax would negatively affect their own businesses and others who sell cigarettes within the Town's limits, as well as produce less, not more, tax revenue for the Town.

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Town Council's vote was 5-2, with Vice-Mayor Armstead D. Reid and Tommy Pairet voting against. The majority-David E. Whitus, Donald L. Hunter, Sally Thompson, Jamie Davis and Dr. Edward I. Gordon-adopted the new ordinance without comment.

Nor did the two council members opposing the cigarette tax speak.

The vote came following Town Manager Gerald Spates' recommendation of its passage.

The Town adopted the tax to create an additional stream of revenue to meet current and future costs of services for residents. Officials are concerned over efforts at the state level to alter or abolish the business license tax, the Town's second largest source of revenue.

Jim Thompson, who spoke against the tax during May's council meeting, identifying himself then as a Bedford resident and area sales manager for Stop-In Food Stores, reiterated those concerns.

“First of all it would be, obviously, a very irrefutable damage to anybody in the city who sells cigarettes. Number two,” the businessman said, “the small independent stores…that are small in stature will probably be gone from your town in a very short length of time as soon as they can find a closed service station or restaurant or something to convert into a smoke shop or cigarette store, because, number one, the people who smoke are going to find the cheapest price for the cigarettes. If that means leaving your town to do it they will certainly do it.

“I've already had stores in this situation (in other areas) and it's a proven fact,” he said, “that if you add a cigarette tax you will see your tax revenue go downhill very soon thereafter. You may get a little boost for a couple months and think you've done the right thing but down the road you're going to see your overall tax income go right down the toilet. It's a proven fact.”

Thompson said he has a 10-year lease on the location of his Farmville store and “I've been here five years. With a cigarette tax in I would not recommend renewing my lease in five years. It wouldn't be worth it to me to do it.”

Don Singer, who identified himself as representing Sheetz, said he was speaking from the company's experiences in other areas where small towns have placed a tax on items.

Smokers, he said, “they will look to buy their cigarettes at the cheapest places, the cheapest location.

“Unfortunately, we are located 100 yards, I believe, inside your city limits,” Singer said.

Revenue, he said, is going to leave town.

“When I lose revenue, I have…operational expenses that I have to take care of. I employ a lot of people from this local community. When we lose revenue we lose employees…”

John Howard, who said he was representing Fas Mart convenience stores, told council members, “I have two stores in Williamsburg. Outside (the city limits) we have a lesser tax. All of my business, when the taxation went up in Williamsburg, all the business moved to that other store (the one outside the city), which in turn means…I had to look at some operational issues…so what I had to do was cut back employees' hours and to the point some people were let go, laid-off. It really does hurt the whole business when you start a tax. What's really unfair with this taxation is that just outside the town limits there's stores waiting, like vampires, for you guys to do this…It's no-win situation.”

Matteo Rendazzo, who identified himself as a Hampden-Sydney College student who does not live in Farmville, said “many (H-SC students) will inevitably choose to keep their purchasing power at the college and the surrounding area…There will be little reason for students to make the costly and inconvenient trip into town (to purchase more expensive cigarettes).”

Jean Williams, who lives in Green Bay and operates J W's Express, in Farmville, said, “I can tell you that if the cigarette tax is imposed it will dramatically affect my business. You're going to drive sales out of town.”

She presented Town officials with “an opinion poll” containing 322 signatures of customers collected in just four days, all against the cigarette tax. “A lot of these customers are cigarette smokers. A lot of them are non-smokers. But when you say, '

Would you like to sign my opinion poll' (they said) 'Yes, ma'am, because I just don't think it's right to target one group of people.' And that's what this is doing, just targeting one group of people.”

Though Town Council members did not make any comments prior to the 5-2 vote enacting the cigarette tax, Vice-Mayor Reid, prior to the meeting's adjournment, expressed the hope that his dissenting vote would not affect his reappointment, by council members, as vice-mayor.

A comment had been made during last week's work session by a council member, Dr. Gordon, who responded Wednesday night that he had been simply joking.

“It might have been a joke,” Reid said, during the council member comments portion that closes each council meeting, “but it bothered me that it was said.”

Dr. Gordon responded to Reid, saying, “There's no telling what will come out of my mouth sometimes. I don't even know. That was a complete joke…I'd apologize if I had something to apologize about but I don't because I didn't mean anything by it. I feel bad for hurting your feelings. I will say that.”

Reid said his feelings were not hurt but that he was concerned that it was said.