Where there's smoke, there's taxes -- especially for New Yorkers. In an emergency budget move officials say will generate $440 million in revenue, the state legislature just passed a bill that gives New York the highest cigarette taxes in the country. Starting July 1, every pack sold in the state will cost an extra $1.60, raising the total state tax to $4.35 and pushing the average cost of a pack up to $9.20. For New York City residents, the cost of a pack will now come out to close to $11 -- a $2 rise from just over a year ago.

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The state will also start making attempts to collect taxes from cigarettes sold on Indian reservations, a controversial move which could encourage more Native American groups to manufacture their own brands of tax-free cigarettes.

More: Cigarettes can no longer be 'light' or 'mild', but can still be color-coded

The $440 million in revenue will benefit health care programs, AIDS drugs subsidies, tobacco cessation programs and $71.6 million will go to the state cancer research center in Buffalo. Supporters also laud the health benefits, saying it will reduce the number of smokers by tens of thousands of people.

Native American tribes of New York consider the collection plan highly volatile. Seneca Nation President Barry Snyder Sr. J.C. Seneca is calling the move "a deliberate effort to sabotage our federal treaty rights." J.C. Seneca, another Seneca leader, says it represents "an act of war" between the state and Indian tribes. New York has been trying to collect cigarette taxes from Native American tribes since the early 1990s.

New Yorkers who refuse to quit smoking can expect heavy long-term costs. Under current taxes, a smoking habit can cost a New York City resident up to $6,000 over two years.