http://racerealty.com/

City to consider raising tobacco tax

NCADD made request as a prevention measure for teen use

Posted: Wednesday, July 15, 2009

A health advocacy organization wants the city to raise cigarette taxes in Juneau from 30 cents a pack to $1.

Michael Penn / Juneau Empire
Michael Penn / Juneau Empire

The excise tax could show up on the October ballot.

The request comes from the Juneau affiliate of the National Council on Alcoholism and Drug Dependence, which asked the Juneau Assembly Finance Committee to consider raising taxes on tobacco products as a prevention measure for teens.

Some 90 percent of people who end up smoking as adults start in their teenage years, Executive Director Matt Felix said.

"If you can target that group and prevent them from starting through higher prices - and research shows that does work - then taxation is the way to go to get the price up," Felix said.

Juneau is behind the curve on taxing cigarette purchases, Felix said.

Anchorage charges $1.30 per pack, and Sitka, Barrow and the Matanuska-Susitna Borough each charge $1.

"All we're asking is to tax this product at the rate other cities are, so people don't try to buy from one city in bulk and transfer it to another city," Felix said.

The organization also wants to raise the excise tax on products such as cigars, snuff and chew to 45 percent from 12 percent.

If consumption habits don't change, tobacco tax revenues could triple if passed as proposed. The tax would generate $1.6 million for the city, compared to $515,490 last year, according to city Finance Director Craig Duncan.

The revenues are paid out in grants to health and social services agencies. NCADD-Juneau does not receive those funds, Felix said.

While Felix said the Assembly could pass the excise tax "from the bench," or without putting it on the ballot, city Attorney John Hartle said he suspected elected officials would since they've gone to the voters in the past with requests to raise any kind of tax.

That didn't worry Felix because tobacco taxes are usually supported by voters.

"The last time a tobacco tax was put on the ballot it passed 2-1, so I don't have any fear that it won't pass," he said.

Juneau adopted its tobacco tax in 2003.

Percy's Liquor Store owner Robert Rodman said the last tax increase on tobacco products - a tripling of taxes on roll-your-own tobacco products - caused a large decrease in sales at his downtown store.

The largest federal tobacco tax increase in history took effect in April, going from 39 cents a pack to $1.01. The state tax in Alaska is $2 per pack.

At $3.01 per pack, Alaskans pay among the highest taxes on cigarettes. The tax is higher in five states and equal to Alaska's tax in seven others. The highest tax is in New York, at $3.76 per pack.

The finance committee, which is made up of the entire Assembly, is expected to discuss the city's tobacco tax on July 29. The Assembly would have to approve an ordinance by Aug. 24 for a question to appear on the Oct. 7 ballot.

Felix made a pitch to the finance committee to raise the city's tax on alcohol purchases, but elected officials did not appear interested in pursuing the matter.

Hartle advised the committee that the state limits the ability of municipalities to tax alcohol, and any increase in Juneau would likely be challenged in court and take years of litigation to resolve.

• Contact reporter Kim Marquis at 523-2279 or kim.marquis@juneauempire.com.



CONTACT US

  • Switchboard: 907-586-3740
  • Circulation and Delivery: 907-523-2295
  • Newsroom Fax: 907-586-3028
  • Business Fax: 907-586-9097
  • Accounts Receivable: 907-523-2270
  • View the Staff Directory
  • or Send feedback

ADVERTISING

SUBSCRIBER SERVICES

SOCIAL NETWORKING