By Spencer Hunt
and Dan Klepal
The Cincinnati Enquirer

Doug Hill, who works at the Tobacco Outlet on Red Bank Road in Fairfax, said some smokers are still buying single cigarette packs despite Ohio's higher taxes. (Glenn Hartong photo) | ZOOM |

Smokers will stand outside in the cold and snow to take their smoke breaks.

So what happens when the state legislature raises their cigarette taxes? Some people quit. Others go out of their way to avoid paying the taxes. Most, however, keep on smoking and paying.

Theresa Jones, a 38-year-old resident of Mount Healthy, said it's too much of a hassle driving to Kentucky for cheaper smokes.

"I'd spend the money I save on gas going over to Kentucky," Jones said. "And I don't buy cartons of cigarettes, because I'm trying to stop."

Smokers are often the first and favorite targets of governors nationwide who are desperately looking to grab some quick millions to balance their deficit-riddled budgets. But this year, in Ohio and Kentucky, the governors are being blocked by state legislators.

It frustrates members of Ohio Gov. Bob Taft's budget team, who know how smokers will react.

Ohio's income and sales tax revenues may defy budget experts' predictions, but their estimates for the recent 31-cent cigarette tax increase were right on the money. The state's new 55-cent tax, which took effect in July, produced $28 million more in taxes than expected.

Combine those revenues with national studies that show higher taxes discourage kids and adults from picking up the habit, and you can see why Taft supports another 45-cent increase.

He wants the extra money to help erase a $720 million short-term deficit and to help fund his proposed $49.2 billion two-year budget.

At least 23 other states, including Kentucky, are considering cigarette tax hikes to help fund budgets crippled by the national recession. Like Ohio, Connecticut, Nebraska, New Jersey and Tennessee have already raised cigarette taxes once within the past year.

In Kentucky, the nation's second-largest producer of tobacco, Gov. Paul Patton favors an increase from 3 cents a pack to 40 cents. His plan faces trouble from lawmakers who represent the state's angry tobacco farmers.

And in Ohio this year House lawmakers are so far rejecting Taft's tax proposal to raise another $742 million over the next two years.

"The simple fact for me was we raised this tax 129 percent just seven months ago," said Rep. Bill Seitz, R-Green Township.

"I have a problem with targeting a single group of people to pay for everyone else," said Rep. Jean Schmidt, R-Loveland. "(Smokers) are being disproportionately asked to carry the load."

State Rep. Patty Clancy, R-Cincinnati and the No. 3 leader in the Ohio House, said she's worried Greater Cincinnati convenience store owners have already lost too much business to their Kentucky rivals.

"In our border region, we obviously have to be concerned," Clancy said.

Information obtained from the Ohio Department of Taxation shows border businesses do indeed lose money. Before the 31-cent tax hike passed in July, the department estimated a $100 million loss in potential tax revenues to Kentucky and West Virginia, black market cigarette sales and to legal Internet purchases not subject to Ohio taxes.

The number of cigarette packs purchased in Ohio since the tax was imposed also has dropped by about 10 percent. That means store owners sold 55 million fewer packs of cigarettes during the last seven months.

Despite these losses, Ohio collected $184 million more over the past seven months than it did during a comparable time period a year ago. The $338.5 million in taxes collected through Jan. 30 surpasses the state's original estimate of $310.5 million.

"So far, we're right on target," said Gary Gudmundson, spokesman for the Ohio Department of Taxation.

Cincinnati convenience store owners and tobacco dealers say these numbers don't reveal the economic pain they're feeling.

Doug Hill, a clerk at Tobacco Outlet in Fairfax, said most of the business his store lost after the last tax hike was from consumers buying large quantities.

"Most of our multicarton buyers jumped ship and started driving over to Kentucky," said the 39-year-old Hill, between puffs on a Winston. "But the people who come in and buy single packs, we kept most of them."

Indeed, the bottom line for many smokers in the Tristate is that convenience trumps price.

Promoting small businesses, like Tobacco Outlet, is more important to Nicole Cox than driving extra miles to avoid a tax. But the cost of cigarettes has forced the 34-year-old Mariemont resident to cut back on how much she smokes.

Lance Walling, 27, has smoked Marlboros since he was 13, until they hit $4 a pack earlier this year. Now he smokes Silvertons at $1.89 per pack.

"I only go to Kentucky when I have the time, and then I buy two or three cartons at a time," Walling said.

Eric Lindblom, policy research manager for the national Campaign for Tobacco Free Kids, said more than 60 percent of smokers buy their cigarettes one to two packs at a time from local stores.

Antismoking groups like Lindblom's like higher taxes because they discourage more teens from picking up the habit. Ohio taxation officials estimate a 4 percent drop in cigarette consumption for every 10 percent increase in price.

Bob Richard, president of the Ohio Association of Convenience Stores, which represents about 4,600 such stores and gas stations in Ohio, said Taft and his budget team should also think about how his members are losing more than just cigarette tax sales.

"We're losing lottery (sales,) beer, wine, bread, Coke and Pepsi," Richard said. "They're not looking at the whole picture."

E-mail shunt@enquirer and dklepal@enquirer.com