Lockport Union-Sun & Journal Online

Opinion

May 19, 2013

HOPKINS: Cuomo's Oneida deal not so great

(Continued)

Lockport Union-Sun & Journal —

Why is it “pesky?” Because what the Oneidas will do is raise their cigarette prices to the levels charged by merchants who pay the state sales tax. But the Indians will simply pocket the additional revenue.

New York state and local cigarette taxes are $4.35 per pack. That’s $43.50 per carton. How many cartons do the Oneidas sell in a year? I don’t have an answer for that, but if it were 100,000 (that would be a realistic 274 per day) then we’re talking $4.35 million.

Suddenly, that $50 million deal is down to $45 million. And New York state won’t see a penny of it.

The Oneidas pulled a similar play with gasoline tax. Merchants complained that they couldn’t compete with gas prices that were 30-35 cents cheaper at Oneida-owned facilities. The state (run at the time by George Pataki) put pressure on the Oneidas. Finally, the Oneidas agreed to raise their prices. They pocketed the difference.

Who lost out? The residents. We always do.

In the meantime, there’s been a new development with the Oneidas. According to Utica television station WKTV, the Oneidas plan to produce and sell more of their own brand of cigarettes by mid-September. Of course, they’ll also stop purchasing name-brand cigarettes that carry the New York state sales tax.

“The federal law preempts state efforts to tax products manufactured and sold on Indian nations,” said Oneida Indian Nation C.O.O. Peter Carmen.

Well played.

This announcement means that the agreement to charge similar prices for cigarettes is meaningless.

I think we’ve all been fooled.

Put that in your pipe and smoke it.

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