The price of cigarettes, tobacco products and vaping supplies could increase in Kodiak if a measure winding its way through the Borough Assembly’s ordinance process passes next month.
The new rules, sponsored by Assembly Member Dennis Symmons, would raise the excise tax on individual cigarettes from 5 cents to 7.5 cents, and the tax on other tobacco products from 25% to 37% of the wholesale price.
Cigarettes come in packs of 20, so the measure would increase the tax per pack from $1 to $1.50.
When borough first levied an excise tax of cigarettes and tobacco products in 2017, the group modified the measure at the last minute to exclude vaping and e-cigarette products. There were concerns among the assembly that those products could be bought online and hurt local businesses selling them.
That would change too. The definition of “other tobacco products” in the proposed ordinance would include “any noncombustible device that provides a vapor of liquid nicotine to the user or relies on vaporization of any liquid or solid nicotine, including devices manufactured as e-cigarettes, e-cigars, e-pipes or under any other product name.”
The move could raise close to $200,000 for the borough. Because the borough is only allowed to bring in so much money every year under maximum allowable tax revenue rules, the additional funds would lower property taxes.
Health could be another consideration. Betty MacTavish, a tobacco education coordinator at Kodiak Area Native Association and longtime advocate for reduction in tobacco use, has spoken to the assembly a number of times about the importance of the tax hike.
“In the health world, every 10% increase in price reduces general consumption by 4%,” she told assembly members in July. “The state of Alaska spends $20 in tobacco-related health costs for every pack of cigarettes sold.”
She urged the assembly to make even larger increases to the tax rates. The new rates, should they pass, would still be lower than some of Alaska’s larger cities. Juneau, for instance, charges $3 a pack and 45% on other tobacco products. Anchorage and Mat-Su both charge 55% on other tobacco products.
The borough assembly was originally going to vote on the measure this month. But after modifying some of the language in the ordinance, the group voted to push it off until September. Barring further delays, it will be discussed at the group’s Sept. 10 work session, and a public hearing and final vote will be held Sept. 17.