Wawa enters the cigarette-tax fray in Harrisburg

Wawa is circulating literature that raises concerns about a proposal to tax cigarettes in Philadelphia.

Philadelphia’s City Council voted last week to impose a new $2 tax on every pack of cigarettes, but the proposal still requires state legislation. It is part of a plan to bail out the city’s schools, which are facing a $304 million budget deficit next fiscal year.

Wawa shared a document with some Pennsylvania lawmakers and the Corbett administration, which states that the $2 tax would create a black market for cigarettes.

“Black-market cigarettes result in tax revenue loss for the Commonwealth of Pennsylvania and loss of sales revenue and customer traffic for legitimate tobacco retailers,” the document reads.

It also states that “a large tax increase in Philadelphia will result in ‘border bleed’ for tobacco products currently being sold in Philadelphia.”

Company response

However, Wawa spokeswoman Lori Bruce said the convenience store chain does not oppose state-enabling legislation that would allow Philadelphia to tax cigarettes.

“[The literature] was shared in an effort to present all available facts on this complex issue and is not indicative of a position on the issue,” she said. “It should not be interpreted as our opposing the effort.”

Bruce said the literature circulated by Wawa features “industry concerns” based on “well-known facts and previously published industry experiences.”

She added that Wawa supports strengthening Philadelphia’s schools, “even if such a plan includes raising cigarette taxes.”

Local legislators’ thought

State Sen. Vincent Hughes (D-Philadelphia) said he received literature from Wawa, but he still supports the enabling legislation.

“We have to focus on the potential upside and try to drive the extra resources towards education,” he said. “And we have to do the appropriate policing and law enforcement to make sure that folks do not wind up going into the off-the-record purchase of cigarettes.”

State Rep. Michael O’Brien (D-Philadelphia) said Wawa’s position doesn’t matter much. He said the cigarette tax proposal always had little chance of passing.

“The atmosphere in Harrisburg is against any kind of tax increase,” said O’Brien. “I don’t know that you’re going to be able to convince my Republican colleagues to vote for it.”

O’Brien said the proposed $2 tax is “ill-advised at best.” He argues that Philadelphia residents will simply drive to other counties to avoid it.

Senate GOP spokesman Erik Arneson has said that the enabling legislation faces an uphill battle, partly because Philadelphia-area lawmakers do not appear to be unified behind it. 

Hughes, on the other hand, is optimistic. He said that he is not aware of any state Senators in the Philadelphia delegation who oppose the enabling legislation.

“I think in the end that the right thing will prevail,” Hughes said, “and we’ll be able to get additional resources for our students and for the school district.”