Tobacco farmers feel singled out
South Hill’s proposal to increase revenue for the town through a $0.30 per pack, $3 per carton tax on cigarettes is sparking debate throughout the community.
On Monday, the Mecklenburg County Board of Supervisors unanimously voted to go on record with a resolution opposing the tax, not only in South Hill but in any town in the county.
The Mecklenburg County Farm Bureau has also added its voice to the discussion, issuing its own resolution opposing the new tax.
The community of tobacco farmers in the area has, almost unanimously, been opposed to the plan, feeling that its livelihood has been singled out over the years as an almost bottomless pit for government entities seeking a quick infusion of cash.
In the U.S., tobacco products are taxed at both the federal and state levels. In Virginia, they may also be taxed at the local level.
On the federal level, the national tax on a pack of cigarettes is $1.01 per pack (or $10.10 per carton). Added to that is a state tax which ranges from a low of $0.17 per pack ($1.70 per carton) in Missouri to a high of $4.35 per pack ($45.35 per carton) in New York.
In Virginia, the current state tax on a pack of cigarettes is $0.30 per pack.
Doing the math, a pound of tobacco that brings the farmer $2.02 before taking into account expenses and production costs nets the federal government $20.20 and the Commonwealth of Virginia $6.
One of the most vocal of the local tobacco farmers, Jim Jennings, a Mecklenburg County supervisor and former president of the Mecklenburg County Farm Bureau, feels that people should understand that tobacco farmers are already struggling to survive in an increasingly difficult situation.
“I want to hammer this home again,” said Jennings. “I agree with something Vice Chairman Gregg Gordon said at the supervisors meeting this week.”
As the meeting wound down, Gordon admitted that it appeared that the tobacco industry had been singled out and was burdened by taxes more than other industries.
Jennings also said that he feels that if the tobacco industry is to be singled out for raising revenues, that money should go for better reasons.
“If we were going to take this money and give it to the cancer center or the cardiac center or the pulmonary center at the new hospital, I don’t think you’d have seen anyone in our industry complain,” said Jennings.
South Hill Town Manager Kim Callis has said the revenue gained from the cigarette tax is proposed to be used to enhance retirement benefits for the town’s police officers as well as information technology upgrades for the police department.
But at least one South Hill council member, Lillie Feggins-Boone, said Monday the tax if implemented would unfairly target minority smokers who walk to the store and don’t have the means to travel outside town to purchase cigarettes.
Jennings seemed to echo those sentiments.
“All they’re doing like this is squeezing the money out of us, and they’re taking it from the folks who can least afford it,” he said. “That isn’t right.”
The Mecklenburg County Farm Bureau resolution calls the proposed tax on cigarettes “punitive” and voices “strong opposition to the implementation of a tax on tobacco products in the town of South Hill.” The resolution acknowledges tobacco’s role in contributing to the history and economic success of South Hill over the years while noting the town of South Hill, in addition to being home to the Tobacco Farm Life Museum of Virginia, is currently home to two large-scale tobacco buying warehouses that bring tobacco farmers and their business to the town from Virginia and North Carolina.
Speaking on Thursday, Mecklenburg County Farm Bureau President Irvin Matthews, head of the 1,800-member county organization, said that while some people associate the bureau with insurance, Farm Bureau is all about farms, farmers and working to represent the farming community.
Matthews said in the early 1970s, farmers were getting around $1.70 per pound of tobacco, and now, more than 40 years later, that figure has increased to only about $2 per pound.
“That’s not a whole lot of profit between then and now,” said Matthews. “And, people need to remember the history. This area was founded on tobacco and cotton. Everything else came later.”
Matthews also said that he feels a local tax on cigarettes would backfire, giving shoppers one more reason to shop out of town.
“If they do a 30-cent per pack tax, where do they think the people in town are going to buy their cigarettes?” he said. “Ultimately, this isn’t going to help anyone. The consumer and the retailer are going to be the ones hurt.”
David Brankley, formerly with Crop Production Services in South Hill and a member of the Mecklenburg County Board of Supervisors, explained he feels the tobacco industry already pulls its weight in the region.
“My biggest problem is that my business was directly related to tobacco farming, and we pay pretty good for our business license,” Brankley said. “We have a sign in South Hill promoting our tobacco heritage. We’ve got a tobacco heritage museum.”
Mecklenburg, he said, has basically been built on agriculture in general and on tobacco farming in particular.
During Monday’s South Hill Town Council meeting, councilman Ben Taylor argued that tobacco-producing lands provide the county with only .02 percent of its total property tax revenue. He also pointed out that farmers are exempted from the county’s machinery and tools tax.
Brankley responded that tobacco farms require more land to grow tobacco than people might think. One of the big land requirements that people don’t consider is for crop rotation.
“You have to have three times the land that’s planted,” explained Brankley. “Most farms are in three-year rotation. And, you have to have land for irrigation. When someone wants to grow 20 acres, they don’t just rent 20 acres. They rent the farm. There isn’t much land in Mecklenburg County that isn’t connected with farming in one way or another.”
Brankley added that in many cases, the owners renting the land out are older and no longer farm. That rent, said Brankley, is the only income they are getting from those farms.
Asked how he expects the ongoing debate to turn out, Brankley said he expects to see a compromise.
“I think they’re going to lower it,” said Brankley, saying he expects a figure of $0.10 per pack or so will be imposed coupled with a tax increase in another area, such as the personal property rate.
Brankley admitted that while tobacco is not as big a business as it once was, it is still a force in the region and part of the identity of South Hill and Mecklenburg County.
“We’re kind of different here,” said Brankley. “We’re a tobacco town.”