Cigarette tax, school repairs make ballot

Revenue from 15-cent-per-pack increase could go toward social service programs

Posted: Tuesday, August 26, 2003

Voters will choose whether to double city taxes on tobacco and allocate more money for school repairs in the next city election, the Juneau Assembly decided Monday night.

The seven Assembly members at the meeting voted unanimously to place a measure on the Oct. 7 city ballot increasing the tax on cigarettes to 30 cents per pack. If passed by voters, the measure also would double the existing 6 percent excise tax on cigars, chewing tobacco and other tobacco products.

Such a tax increase could help reduce smoking and its costs, said substance abuse expert Matt Felix, noting Alaska is the lone state in the union where cancer is the No. 1 cause of death.

"Most of these deaths are associated with tobacco use and not just cigarette use," said Felix, director of the Juneau office of the National Council on Alcoholism and Drug Dependence.

No one at the meeting spoke against the tax increase, although an Assembly committee heard from a representative of wholesaler Northern Sales Co., said Assembly member Marc Wheeler.

As a result, the ballot measures' language set the tax on a pack of cigarettes at a flat 30 cents, rather than increase the excise tax from 6 to 12 percent, he said. The flat tax would be easier for businesses to collect, he said.

"We did try to work with the industry," Wheeler said.

While the measure passed Monday would trade the percentage-based excise tax on cigarettes for a flat per-pack rate, it would maintain and double the excise tax on other tobacco products.

Before putting the tax increase on the ballot, Assembly members heard from Doris Robbins, a volunteer with the Juneau Clean Air Coalition, who said she hoped the revenue raised would restore recently reduced tobacco prevention programs in schools. Robbins said such programs help reduce the number of young people who start smoking and help cut tobacco-related public health costs

"Most people start smoking by age 18 or not at all," Robbins said. "It's an expensive, addictive habit."

Felix noted surveys show about 27 percent of Juneau youths smoke cigarettes or use other tobacco products, about 4 percent higher than the national average.

Several Assembly members pointed out that the panel cannot mandate how revenues raised by a higher tobacco tax will be spent. But the Assembly can state its intent, which it did in a separate vote.

"The intent is to allocate funds that are the proceeds from this excise tax for social service programs/wellness," said Mayor Sally Smith.

Assembly member Dale Anderson, however, pointed out the revenues would help restore cuts rather than start new programs.

"I don't want to give the public a perception that there may be a great expansion of the health and wellness (funding)," he said.

Assembly member Ken Koelsch, while supporting the increase, said he expects a downside to the measure.

"There will be an increase in bootleg cigarettes coming into this community," he said.

City officials have estimated doubling the tobacco tax would bring another $300,000 into city coffers next year.

The second measure the Assembly voted to put on the Oct. 7 ballot would provide funding for continued improvements for two Juneau schools.

The ballot proposition would raise $6.945 million through bond sales, with most of the money dedicated to continued improvements to Floyd Dryden Middle School in the Mendenhall Valley. Work, estimated to cost $6.52 million, would include replacement of Dryden's heating system, exterior doors and windows; improvements to eighth-grade class-rooms and the parking lot; and new furnishings.

Another estimated $425,000 would be spent to replace water pipes at Harborview Elementary School downtown.

City Manager Rod Swope said bonds for the work would be issued only if the state will reimburse at least 70 percent of the cost, which, while subject to legislative appropriation, is expected.

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