Tobacco Tax Hike Proposed in Alaska

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Tobacco Tax Hike Proposed in Alaska

08/12/2003
JUNEAU, Alaska -- The Juneau, Alaska Assembly introduced a proposed ordinance that would allow the city to double the tax on cigarettes and other tobacco products. The proposal would implement a flat excise tax of 30 cents a pack on cigarettes. The ordinance also would double the excise tax on other tobacco products from 6 percent to 12 percent.

The city estimates the existing 6 percent tax will raise about $300,000 in 2004. The 12 percent tax would bring in an additional $250,000 to $290,000, according to the city, according to the Juneau Empire.

"Based on a 2000 U.S. Surgeon General's report, it is likely this increase in the tobacco excise tax will result in a reduction in tobacco product consumption, particularly among young people," according to a city press release.

The Assembly will discuss the tax at its Aug. 25 meeting. Mayor Sally Smith said the city may decide to use the money from the tax to fund rehabilitation programs. "I don't know what direction the Assembly will take, but I would guess that they are going to go that direction," she said. "One reason is because there wasn't enough money this year to fund the social services program fully."

Mike Elerding, president of Ketchikan's Northern Sales Co., a distributor of tobacco products in Juneau, argued at last week's Assembly meeting that increasing the tax could lead to increased bootlegging and black-market sales.