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MELISSA BLOCK, Host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

MICHELE NORRIS, Host:

And I'm Michele Norris.

Ten dollars and 80 cents - starting tomorrow, that will be the average price in New York City for a pack of cigarettes - not a carton, a pack. The state is adding extra taxes to make up for its huge budget deficit. In the city that already has the highest cigarette prices in the country, many people say they'll find somewhere else to get their smokes.

NPR's Carolyn Beeler reports.

CAROLYN BEELER: Taxes on cigarettes are relatively safe for lawmakers in some states. They raise revenue, discourage smoking, and they don't affect nonsmokers much. But smokers, like the ones I talked to in Manhattan, they're not so happy when taxes jump.

SAL ANGIULI: I think it's ridiculous.

BEELER: Sal Angiuli is a laborer who lives in Long Island. He says there's no way he's giving the state that kind of money - $1.60 extra per pack.

ANGIULI: I'll start going to Indian reservations and pay no tax. There's plenty of ways around it.

BEELER: Jessica Zayes is from Brooklyn. She says she'll just have to fork over more money. She is addicted, after all.

JESSICA ZAYES: I think it's unfair, and I think that they're overcharging as it is, but since I smoke and I don't plan on stopping, I'll pay the tax.

But Zayes does say she'll try to cut back. That's at least part of the point of the higher tax. But it's not great for some business owners. Jameel Ahmed works at a tiny convenience store in Midtown Manhattan. It's so narrow, you could almost touch both walls at once. When a new cigarette tax went into effect two years ago, Ahmed says sales dropped around two to $3,000 a month at his store. And he ways this tax increase will just make things worse. Some people might actually quit smoking.

JAMEEL AHMED: Some people say, OK, I quit the cigarettes. And I say, well, why are you stop the cigarettes?

BEELER: A lot of people who continue to smoke refuse to buy cigarettes in New York. Tourists who aren't used to seeing a $10 price tag walk into Ahmed's store and walk right back out.

AHMED: I say $10, $10. Oh, too much. They throw the cigarette and left.

BEELER: Even New Yorkers avoid buying cigarettes in New York. They buy them online, or have friends pick up cartons duty-free at airports when they travel. Lots of smokers say buying from shops like Ahmed's is for emergencies only.

But what's bad for Ahmed is good for Phil Hwang. He works at the Valero gas station across the river in Jersey City.

PHIL HWANG: Two-fifty.

People from Manhattan will buy cigarettes here, and they'll buy a carton at a time.

BEELER: Hwang's gas station is right by the Holland tunnel. The road leading out of the tunnel on the New Jersey side is lined with gas stations, where commuters fill up on cheap gas and cigarettes.

Hwang says the last time New York taxes went up he saw cigarette sales at his New Jersey store increase about 20 or 30 percent. He expects the same thing to happen this time.

HWANG: Yeah, I'm probably going to have to stock up a little extra cigarettes. Everyone that's been coming from the city has been complaining about that $1.60 tax increase.

(SOUNDBITE OF LAUGHTER)

BEELER: What have they been saying?

HWANG: They're going to plan on quitting smoking soon. But that's not going to happen.

BEELER: His customers say they'll quit every time prices jump. He's skeptical. They always seem to keep coming back around.

Carolyn Beeler, NPR News, Washington.

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