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[FEATURE STORY]
Taking political action:
Facing anti-tobacco challenges head-on
By Tracy Cox
Members of the tobacco industry learned a valuable lesson in 2006: joining forces against anti-tobacco legislation works. In 2006, 90 percent of U.S. state tobacco-related bills—including tax increases, smoking restrictions and legal-age increases—were either not passed or defeated. Tom Briant, executive director of the National Association of Tobacco Outlets, says that retailers should continue to raise voices. “The high success rate is due to numerous factors, including strong efforts by the entire tobacco industry, including NATO and its members, to fight unfair and excessive tax increases, and oppose legislation that would prohibit citizens from exercising their right to use legal tobacco products in restaurants and bars,” he says.
Andy Kerstein, NATO vice president and owner of Smoker’s Haven stores based in Monmouth County in New Jersey, is helping to lead the charge against anti-tobacco legislation. He understands firsthand the implications of the anti-tobacco movement. He recently helped develop another organization, Associated Retail Tobacco Stores of New Jersey (ARTS), which helps join retailers to challenge excessive taxes, prohibition and unfair competition.
Kerstein says the organization was formed in direct response to a proposed New Jersey bill that would have banned all flavored tobacco products. ARTS was successful in testifying and persuading the state senate committee to amend the bill and remove all references to cigars and pipe tobacco.
“The biggest message to all of our industry brethren is that you need to stay on top of the issues,” Kerstein says. “It is key that everyone is engaged and knowledgeable.”
Raising voice
Sam Difiglio, vice president of sales and marketing, for Don Salvatore, Chicago, says the buzz is that banding together works. “From what I’ve heard, especially in California, the retailers are working together and it pays off,” he says. “In California, the retailers put a lot of effort into stopping Proposition 86, and it failed to pass. All over the country, retailers are doing what they can.”
Don Salvatore puts forward its own grassroots efforts, educating consumers on their right to purchase and use the products. The company is now placing legislative action forms in all of its product shipments so that consumers are armed with the proper tools to oppose legislation. This form has detailed information on how to access and utilize the Legislative Action Center created by Retail Tobacco Dealers of America.
“If we don’t stick together, we are not going to be heard,” Difiglio says. “And we have a lot of support. Together, NATO, RTDA and the Cigar Association of America have all done a great job for us.”
RTDA and NATO have both been recognizing retailers who take action to defeat anti-tobacco legislation and ballot initiatives, and they offer to help those retailers who are raising voice.
The RTDA’s Legislative Action Center is a simple how-to guide for retailers looking to educate themselves on current legislation, with information on how to send a message to legislators. This guide is at www.rtda.org/legislation.html.
“There are several facets of the site, and probably the most important to date is the database where we list all of the tobacco legislation pending, so a retailer or customer can just click through and check on a bill with a link,” says RTDA Director of Legislative Affairs Chris McCalla. “They can find out whether there are any pending bills or tax increases, and they can review the bill and contact their representative directly.”
NATO also keeps members abreast of the latest developments. “Anytime there is a bill introduced in state legislature, we send an alert to all the members in that state,” Kerstein says. “We have all of the information at the state level. We find out about local developments from one of our members. And we have a pretty good network that allows us to keep current with all of the pending legislation. We realize the importance of this, because our members are busy—they are running their businesses.”
Kerstein adds that the organization also helps retailers prepare their arguments. “We want the local people to do the testifying, and we help prepare them by phone, e-mail and conference calls,” he says.
There is no one magic bullet when presenting the case against anti-tobacco legislation, McCalla says. “Simply put, the most important thing for retailers to say is, ‘I am a small business owner and to increase taxes is unfair in a capitalistic-driven market, where it is up to the consumer to shop for the best value.’ Because tobacco enthusiasts will look to other places of business, where taxes are not so prohibitive,” he says. “The main problem is that we are in more of a reactionary mode. Retailers are overburdened with regulation; they have to file reports monthly or bimonthly. And they also have businesses to run.”
The landscape
The November 2006 ballot initiatives in Arizona, California, Missouri, Nevada, Ohio and South Dakota either proposed higher cigarette and other tobacco products (OTP) taxes or smoking bans. The California ballot initiative—Proposition 86—would have resulted in an additional tax of $2.60 per cigarette pack. “Without the cigarette industry’s financial resources, Prop. 86 would most likely have passed,” McCalla says.
And Missouri was an even better win for the industry, McCalla notes. “We didn’t have a lot of cigarette money in Missouri,” he says. “It was a smaller, grassroots coalition, and everyone came together through word of mouth.”
Further, some of the tobacco tax increases passed as a result of the November elections are under scrutiny. Briant says that a tax increase in Arizona may be facing legal action because the actual wording of the question would raise the cigarette tax by eight-tenths of one cent per pack, rather than the intended 80 cents per pack.
In late December, Sen. Garry Moore of South Dakota announced that he may propose legislation to reduce the tobacco tax increase approved by 61 percent of state voters on the Nov. 7 initiative, which will raise the state sales tax on a pack of cigarettes from .53 to $1.53.
Finally, lawsuits have been filed in Ohio and Nevada to block enforcement of the statewide smoking bans, which voters approved on Nov. 7. In Ohio, the state has delayed enforcing the new smoking ban until specific rules and regulations are drafted by the Ohio Department of Health. Additionally, two lawsuits have been filed in different Ohio county courts challenging the constitutionality of the ban and seeking a temporary restraining order against the smoking prohibition.
In Nevada, a group of southern Nevada tavern owners and casino operators filed a lawsuit to stop enforcement of the smoking ban restrictions approved by voters. On Dec. 21, a judge ruled that the smoking restrictions adopted by voters can go into effect in some businesses in Clark County (home to Las Vegas), but the misdemeanor criminal penalty could not be enforced. Other issues about the constitutionality of the smoking restrictions still need to be addressed and the judge set a Jan. 23, 2007, hearing date to consider constitutional questions.
In 2007, Briant says, there is a need for continued response from the industry. He says the anti-tobacco advocates will most likely continue to sponsor and lobby for legislation to further increase cigarette and tobacco taxes, impose additional restrictions on where adults can smoke, and attempt to increase the legal age to buy and use tobacco and ban flavored tobacco products. “These efforts of the anti-tobacco zealots will continue in 2007 and future years because of the significant amount of funding these groups receive from states through the Master Settlement Agreement and from private foundations,” he says. “This means that for 2007, we see another very busy legislative year in responding to state tobacco-related bills.”
Looking ahead
With state and local laws either raising taxes or imposing bans on the rise, local efforts to counteract the anti-tobacco movement are urgently needed. But McCalla says voices will be heard. “It all boils down to the votes, and if the numbers are good, then we will be OK,” he says. “The louder you scream, the more you are heard. More than anything else, retailers need to stay vigilant and on top of the issues. We help with that through our work and the RTDA Web site Legislative Action Center.”
Briant says that during 2007, NATO will continue to provide its members with its trademark grassroots legislative assistance that has helped defeat excessive cigarette and tobacco tax increases and oppressive smoking restrictions. This legislative assistance includes providing letters for members to sign and send to elected officials, sending alert flyers for retailers to hand out to customers to encourage them to contact their legislators, and drafting special petition forms opposing the legislation, which are then signed by customers and faxed directly to state legislators.
NATO will also prepare retail members to testify before legislative committees by drafting testimony outlines on particular bills. “One of the best ways for a retailer to impact the outcome of tobacco legislation is to personally visit legislators and testify at committee hearings,” Briant says.
Speaking out against anti-tobacco legislation depends on staying educated on the issues, and this can be complicated because there are so many different anti-tobacco efforts, Kerstein points out. “It’s all over the board,” he says. “There are states that have passed legislation and state ballot initiatives in cities and towns.”
The grassroots efforts are the most successful challenges, Kerstein says. “Local legislators are more apt to listen to one of their constituents than they would be to listen to a representative of a national organization who flies in to testify—or, quite frankly, a professional lobbyist,” he says.
It’s a trying time for the tobacco retailer, as evidenced by the past year, but Kerstein is hopeful. “We were able to defeat Proposition 86 in California, and this will give other organizations striving for these ballot initiatives a little bit of pause,” he says. “At some point, they will have to realize that you can’t abuse the smokers or the retailers. Enough is enough. Tobacco taxes today are ridiculously high, and there is no correlation whatsoever. It’s out of control, and sooner or later, the American public gets wise and the pendulum swings back into balance. I hope we are getting back into balance, because the anti-smoking initiatives have definitely gone too far.”
All of the above leads officials of both the RTDA and NATO to urge retailers to join at least one of the organizations if they aren’t already members.
The next major battle is around the corner, according to Kerstein. “The major focus of the anti-freedom movement is going to be to try to increase smoking restrictions,” he says. “It could happen at anytime, and we need to be prepared.”
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