Cigarettes Tax Hike Passes, Iowa Tobacco Retailers

Tobacco retailers on the Iowa side of the Missouri River could see a big boost in business as Omaha leaders consider a new cigarette tax. The proposal would add 35-cents per pack to the cost of cigarettes sold in Omaha, which Omaha Tobacco Outlet owner Bob Wagner fears will send his store’s profits into the ashtray. “Any tax is horrible,” Wagner says. “My customers are so price-conscious, if they can get a carton from a competitor of mine who is three miles down the road, I’m going to be hard-pressed.” Omaha leaders are considering the cigarette tax hike as a way to help pay for the construction of a new cancer treatment and research center at the University of Nebraska Medical Center. It could create 1,200 jobs by 2020. If the cigarette tax hike passes, Wagner guesses many Omaha smokers will make the short trip across the bridge to Council Bluffs to buy their cartons. “Certainly everybody wants jobs, but if this passes, at a minimum I’m probably going to have to let go of two people and then pray that I can keep my doors open,” Wagner says. He says a 64-cent per pack cigarette tax hike was first suggested, but that was cut to 35-cents a pack. He hopes the proposal will be defeated, but is worried. “This is a direct hit, a gut punch to the blue collar workers in the city of Omaha,” he says. “You’re going to gut check them and then strap this tax to their backs and ride it all the way home. This is absolutely unbelievable.” Omaha is being asked to put up $40-million for the cancer center. Construction could begin on the $323-million facility next year, with opening in 2016. The city’s tax on bars and restaurants that was implemented a few years ago generates about $25-million a year.