June 16 (Bloomberg) -- Reynolds American Inc. said North Carolina Governor Beverly Perdue is putting manufacturing jobs at risk with her proposal to raise cigarette taxes by $1 a pack.

“We want more jobs, not taxes,” Daniel Delen, chief executive officer of Reynolds’ R.J. Reynolds Tobacco Co. unit, said today during a rally in Raleigh, North Carolina’s capital. “Taxes cause direct job losses.”

More than 400 Reynolds employees gathered to urge legislators to reject raising cigarette taxes in the state that grows the most tobacco in the U.S. and is home to Reynolds and Lorillard Inc.

North Carolina is one is one of at least 25 states where legislators are considering an increase in cigarette taxes to cover budget shortfalls, according to the Web site of the National Conference of State Legislatures in Washington. California, Illinois and Connecticut are among them.

U.S. cigarette taxes jumped 62 cents to $1.01 a pack on April 1, intensifying pressure on tobacco companies to fight state increases that may crimp cigarette demand.

Reynolds fell 22 cents to $36.33 at 4 p.m. in New York Stock Exchange composite trading. The shares have fallen 9.9 percent this year.

The plan to raise cigarette taxes reflects that “we simply need revenue,” Perdue, a Democrat elected in November, said in an e-mailed statement. Despite legislative opposition, she said, “we have to be direct and upfront about the costs of health care directly tied to the use of tobacco.”

State Shortfalls

Reynolds employees wearing yellow T-shirts emblazoned with “NC Needs More Jobs Not More Taxes” fanned out in legislative offices to urge representatives to hold the line on cigarette taxes.

The rally was Reynolds’ first objecting to higher cigarette charges in North Carolina, Frank Lester, a company spokesman, said today in an interview. The state’s current cigarette tax is 35 cents a pack, after being raised by 5 cents in 2006 and 25 cents in 2005.

Legislators resume negotiations this week on slashing the state budget that takes effect July 1. A compromise to be hashed out among House and Senate members may include a “small increase” in cigarette taxes after the House last week passed a budget with no increase, Linda Garrou, co-chairman of the Senate Appropriations Committee, said today in an interview.

Garrou, a Democrat from Winston-Salem, Reynolds’ hometown, told employees she opposes a cigarette tax increase because “there’s a point at which we choke the golden goose.”

To contact the reporter on this story: Chris Burritt in Greensboro, North Carolina, at cburritt@bloomberg.net

Last Updated: June 16, 2009 18:01 EDT