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Proposed State Budget Worries Scranton Cigar Plant Operators

Proposed State Budget Worries Scranton Cigar Plant Operators - Thursday, February 7, 2008 at 1:54PM EST

Reported by: David DeCosmo
Thursday, Feb 7, 2008 @01:54pm EST

SCRANTON, LACKAWANNA COUNTY- Governor Ed Rendell is making another big push for a state health plan in his proposed new budget. That plan could cause problems for a Scranton cigar business.

The workers at Avanti Cigar are busy packing a rush order of 22,000 cigars to be shipped out to a local distributor by the end of their shift. The company has been around since 1912 and in Scranton for the past 78 years. But Avanti Cigar spokesman Dom Keating is concerned about the future.

The budget proposed by Pennsylvania Governor Ed Rendell includes a state wide smoking ban and a new tax on tobacco products like cigars. Keating calls it a one-two punch for his business. "If you ban the use of a product and then highly tax it, you're going to put the manufacture of that product out of business. You're going to end the employment of approximately 50 people here in northeastern Pennsylvania. Ironically all these people have a tremendous health care plan that our company pays for" explained Keating.

Keating said much of the burden of the governor's health care plan would fall on small companies like Avanti and their employees. But Keating also explained the impact of the proposed tax and smoking ban wouldn't be limited to this factory. "We're concerned not only for ourselves but for the host of distribution companies in Pennsylvania who also employee many people. We're concerned for the tobacco processors in Pennsylvania, Lancaster County is particularly important for that. We're also concerned about the small farmers who grow tobacco” continued Keating.

State Representative of the 113th District Frank Andrews Shimkus was able to eliminate a proposed cigar tax last year and plans to oppose the new one too. Shimkus declared "The first thing the governor said was we're in a tough economy. So you don't want to do something that's going to put people out of work."

Officials at Avanti Cigar tell us they just dodged a bullet when President Bush vetoed a bill that would have increased their federal taxes from one-million to three million dollars a year.
 


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