Cigarette Tax Will Mean $10 Packs in NYC

Ten dollars (or more) for a pack of cigarettes? It might soon become a reality in many stores in New York City.

The cigarette tax in New York will jump $1.60 a pack under a deal struck between Governor David Paterson and state government leaders.

The proposal is part of an emergency budget bill that the Legislature approved Monday evening.

In the city, which levies steep taxes of its own on tobacco products, a pack of cigarettes would come with a tax of $5.85, making it the nation's first city to break $5.

The Paterson administration hopes the proposal would generate $440 million in revenue this year, which would be a help close the state budget gap which is estimated to be over $9 billion. Despite the dire budget situation there is no guarantee that the emergency bill will pass after Republicans threatened to vote against a bill that includes tax increases.

By at least one estimate, half the cigarettes consumed in New York are purchased from Native Americans who don't collect and pay state taxes. A new proposal would attempt to limit the number of cigarettes purchased from tribes.

Some critics say that the plan sets up conflicts between the state and tribes.

Sen. George Maziarz, a Niagara County Republican, worried about violence when the state tries to collect cigarette taxes from Indian smoke shops, the AP reported.