Central to a tax reform and economic stimulus package the Republican governor unveiled earlier this week is a call to increase the tax on cigarettes from 7 cents to 68 cents and end the exemption on the 5-cent sales tax on lottery tickets.

Not fair, Mr. Adams said while standing in a long noontime line to the cashier's counter at The Depot convenience store at the corner of Richland Avenue and University Parkway.

He smells a conspiracy - at least with the cigarette tax. "I think it's more about getting people to quit than it is about raising money," said Mr. Adams, 42. William Hobbs, 61, an Augusta resident who drives a bus for the Aiken County Transit System, doesn't smoke, but he either starts or ends his shift by buying a lottery ticket.

"Every day - here and Georgia," he said. He doesn't like the idea of paying a tax on lottery tickets that were sold to voters as an alternative to raising taxes. "It's hard enough for people to play the lottery as it is," Mr. Hobbs said.

For many convenience store customers, cigarettes and lottery tickets form two sides of an iron rectangle of reasons to stop for a quick shop - gas and beer are the other motivators.

Jacking up the taxes on tobacco and slapping a tax on lotteries will tick off customers and cause many to make a penny-pinching choice between the habit they can't live without and the one they can, said clerk Tanya Ruszczak, 18, of south Aiken. "I think folks will really get upset about this," she said. "I buy a lotto ticket every time I buy cigarettes. They tax it, I probably won't."

For decades, tobacco companies fought tax increases on the federal and state level, arguing that this version of the so-called sin tax would discourage smokers, encourage bootleg sales and cause revenue collections to fall short of projections because of a decline in sales.

Taxes in the nine Southern states, including the Carolinas and Georgia, have been kept low because of the importance of the tobacco crop and cigarette industry to those states. But a September analysis of nine Southern states with traditionally low cigarette taxes by the nonprofit Research Triangle Institute of North Carolina argues that an increase to the national average of 70 cents a pack gives states a double dip of benefits - a decline in cigarette sales, with the accompanying savings in heath care costs; and, an eventual increase in revenues. If all nine states raised their taxes to 70 cents a pack, state revenues would increase by $2.6 billion, according to the study.

Cigarette sales would have to decline by 85 percent before revenue collections fell below present levels. That's because cigarette sales historically fall after a tax increase, but rise again to a slightly lower level.

On the logic and fairness of slapping a tax on lottery tickets, Mr. Sanford's spokesman, Will Folks, said South Carolina and Georgia are two of five states that don't tax lottery tickets. Thirty-five other states and the District of Columbia tax ticket sales, he said. "We're definitely in the minority on that one," Mr. Folks said. Mr. Sanford, who wants to trade the projected $222 million his proposal would raise for a 15 percent cut in the state's income tax, touts his plan by pointing out that both the lottery and cigarette proposal would be voluntary taxes - revenue raised by the consumer choice of residents.

Democrats aren't so sure this is a fair trade. "That's just silly as hell," said state Sen. Kay Patterson, D-Columbia, who notes that the cigarette and lottery tax would hit poor people the hardest while the income tax reduction would primarily benefit richer South Carolinians.

All of this is so much stale smoke and torn up tickets to Victoria Todd, 73, another Depot store clerk. "It's all right with me," she said. "I don't smoke, and I don't play the lottery."

Reach Jim Nesbitt at (803) 648-1395 or jim.nesbitt@augustacrhonicle.com.

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