Fewer smokers mean cities lose tax money

Posted: Tuesday, September 09, 2008

FAIRBANKS - Fewer people in Alaska are smoking, and the decline in tobacco sales is cutting into the amount of tobacco tax money available for some government budgets.

The state Department of Health and Social Services reported in June that the number of adult smokers in Alaska has declined by one-fifth since 1996 to 21.5 percent, or about 27,000 fewer smokers statewide.

As those numbers drop, smaller municipalities are forced to look elsewhere for dependable income.

Alaska has the highest per capita consumption of tobacco in the country and the seventh-highest tax rate on cigarettes at $2 per pack.

Last year, the state brought in $72.6 million in tax revenue from cigarettes and other tobacco products. The Fairbanks North Star Borough recorded almost $1 million in tobacco tax revenue, but the city of Fairbanks pulled in little more than $625,000.

While state and borough governments may not be worried about fewer sales, the city of Fairbanks is trying to find other means to keep up with growing expenses.

"When we project our future budgets, we also have to project tobacco sales to be declining," Fairbanks Mayor Terry Strle said.

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