JUNEAU, Alaska — Juneau smokers may be shelling out more money for a pack of cigarettes.
A City and Borough of Juneau Assembly committee has forwarded the idea of an increased tax on tobacco products to the finance committee for further consideration, the Juneau Empire reported.
The referral came Monday after a the committee received a presentation on the benefits of a higher tax from Kristin Cox, a doctor at Rainforest Naturopathic Medicine, and Matt Felix, the former director of Juneau’s National Council on Alcoholism and Drug Dependence.
Cox said a 20 percent increase in taxes translates to a 10 percent reduction in the number of users, and a significant drop in the number of youths smoking.
Under this scenario, such an increase would also bring in more than $4 million to city coffers, she said.
Juneau voters in 2009 approved a tax increase on tobacco products, setting the tax at an even $1 on every pack of cigarettes sold. Other tobacco products saw their taxes increases 45 percent in that vote.
A pack of cigarettes costs about $9 in Juneau. That includes $3 in taxes, $2 for the state and $1 for the borough. The $1 local tax is on par with communities like Barrow, Sitka and the Matanuska-Susitna Borough.
Bethel has a $2 per pack local tax, and Anchorage’s tax is $2.21, Cox said. Only Fairbanks has a lower tax, at 20 cents per pack, she said.
Cox said voters approved this increase, and an earlier tax hike in 2003, by a two-to-one margin. But she said the tax question would not have to go to voters after a Supreme Court decision involving the Mat-Su Borough found such governmental bodies could pass an excise tax without voter approval.
The finance committee will work on crafting the details of a tax increase, including how much the tax would be and how much the city would receive from the tax.
Assembly member Randy Wanamaker said the committee should also determine where the additional revenue should be directed.
From the current $1 tax, Juneau received $1.4 million last year. Of that, 60 percent of the revenue went to social service block grants, with the remaining 40 percent split evenly between Bartlett Regional Hospital and the general fund, Cox said.
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