Smokers blow off higher U.S. prices

REYNOSA — Smuggling cigarettes into the United States has become more popular due to a spike in cigarette taxes at the start of the year, officials say.

“A lot of (people) hide them in their car and don’t declare them,” said Alex de la Garza, the ports of entry supervisor for the Texas Alcoholic Beverage Commission.

“Here at the (U.S.-Mexico) border, we try and catch them smuggling and take their merchandise away.”

This fiscal year, 6,657 packs have been confiscated — nearly 4,000 more than last year.

Senate Bill 1122 raised the cigarette tax by a dollar this year, pushing the tax per pack up to $1.50 compared to 50 cents per pack last year. The tax on a carton of 10 cigarette packs is $15.

As a result, not as many packs are being bought from Mexico. But because of the tax, revenue has still increased.

According to the TABC, $1,064,602 in revenue has been collected during the 2007 fiscal year through June. That’s $118,643 more than the 2006 fiscal year.

However, only 1,104,533 cigarette packs, called containers, have been stamped compared to 1,943,999 in 2006’s fiscal year.

The number of packs actually stamped has decreased since before January, said TABC ports director Santos Saldaña.

“It’s going down for two main reasons,” Saldaña said. “It’s either because of their refusal to pay, or they’re undeclared by trying to get them smuggled.”

TABC officials must stamp each imported cigarette pack to tax it and consider it “declared.” By smuggling, no tax would be paid, making those cigarette packs illegal and “undeclared.”

Cigarettes imported and tallied by the TABC are for personal use only.

According to the Texas Petroleum Marketers and Convenience Store Association, cigarettes represent 34 percent of the industry’s average of inside store sales per convenient store.

Among stores on both sides of the border, many say the tax has had little effect on their cigarette sales.

“At first, (Americans) were coming over to buy them here,” José Alaniz, owner of Mini Roll, a small convenience store in Reynosa, said in Spanish. “But now they’re finding it not worth driving all the way over here. With gas and all, the price pretty much comes out the same.”

Smoke Shop in McAllen experienced much the same thing.

“There hasn’t been anything too drastic of a change,” Smoke Shop manager April Wilson said.

“In December, everybody stocked up at first before the tax raise, but not anymore. I think it’s unfair we (cigarette smokers and stores) are the ones picked on.”

Wilson said the store’s customers are turning to less expensive tobacco products.

“They’ve switched to other forms because they’re cheaper,” Wilson said. “They’re buying pipe tobacco or chewing tobacco, or the kind you roll on your own.

Fewer Texans are also smoking, said Dr. Philip Huang, medical director for the Texas Department of State Health Services in Austin.

Huang said that in 2006, from Laredo to Aransas Pass on down, 14 percent of adults were smokers. That percentage has dropped 6 percent since 2001.

Statewide, there has been a 36 percent reduction in the number of adult smokers over the past four or five years, Huang said.

“This (reduction) is not even reflected in any of the (cigarette tax) data yet,” Huang said. “We’ve been making progress. I would expect it would go even lower.”

The sales tax could mean fewer smokers in Texas’ future, said James Gray, government relations director for the American Cancer Society.

“Because of a significant increase in the cigarette tax, we’ll be seeing consumption going down among Texas smokers,” Gray said. “With the tax, we know that 280,000 students alive today will never take up the habit of smoking because of that $1 (per pack) increase.”

Smoking rates among Hispanics are also lower than the national average, Gray said.

Nationally, the rate is about 21 percent, whereas for Hispanics, only about 15.6 percent smoke.

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Julian Cavazos covers general assignments for The Monitor. You can reach him at (956) 683-4474. For this and other stories, visit www.themonitor.com.