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Gov. Pataki's recent decision to abandon state efforts to block tax-free cigarette and gasoline sales on Indian reservations is having side effects on another key issue: tobacco control.

When the governor said the state would not try to enforce the Indian tax regulations, the powerful lobby for convenience store operators -- who say Pataki's move hit them financially -- went to work on the tobacco issue with the State Senate.

According to various sources, the group persuaded Senate Republicans -- longtime allies of the retailers' group -- not to let Pataki double the fee the state charges retailers for cigarette licenses, arguing, in part, that they had just taken a big slap on the Indian issue.

"It's deader than dead," Constance Barrella, president of the New York State Association of Convenience Stores, said of Pataki's proposed fee increase for her members. Sources say another Pataki proposal, banning self-service cigarette displays, is also in trouble in the Senate.

The governor, who had been roundly criticized by health groups for doing little on tobacco control issues, in December proposed several anti-smoking initiatives.

One was to double to $200 the annual fee retailers pay the state for licenses to sell cigarettes. The additional $2.6 million would then go to local governments, which could use the money for a variety of efforts, such as beefing up enforcement actions against stores that sell cigarettes to minors.

"This was all a backlash for Pataki's Indian tax policies," complained Assemblyman Alexander Grannis, D-Manhattan, and the Legislature's leading anti-tobacco advocate. "The governor sandbagged the convenience stores when he unexpectedly did an about-face on the Indian tax issue."

Following a successful lawsuit brought by the convenience store group, the governor earlier this year had begun efforts to try to stop tax-free sales of cigarettes and gasoline to non-Indians on tribal lands. But in May, following a series of violent episodes between Native Americans and state police, he suddenly stopped the collection plan.

The convenience stores are still battling Pataki in court, trying to force the state to collect the reservation taxes.

Grannis said he had been told "the Senate was offended" by Pataki's action on the Indian issue. "And they used that as justification" to block the cigarette licensing fee increase.

But Senate Majority Leader Joseph Bruno, R-Brunswick, said he doesn't want any taxes or fees increased this year. "All the fees and all the increases were taken out" during the ongoing budget talks, he said. "We're dealing with a surplus this year and we didn't see ourselves levying additional taxes or fees anywhere. That's where we are at the moment." A Bruno spokeswoman later said he still supports the governor's anti-smoking efforts.

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