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November 11, 2010 - The Anchorage Assembly Tuesday night, November 10th approved an increase in city taxes on tobacco, a move expected to raise $5.2 million to $6.2 million more in revenue annually. The measure, approved in an 8-3 vote, boosts the city tax on a pack of cigarettes by 75 cents, for a total of $2.21 a pack, beginning January 1, 2011.
A pack of cigarettes now costs $7.50 to $8.30 in Anchorage, the city estimates. The new tax will be added on to that amount. State and federal governments also tax tobacco; combined taxes per pack will be $5.21. The city's tobacco tax is an excise tax, a tax on the wholesale price of goods, and the increase does not need to be approved by city voters. Alaska cigarette excise tax rate $2.00 per pack of 20.
Assembly chairman Dick Traini proposed the tax hike to allow the city to rely less on property taxes as it tries to deal with a budget shortfall. The rising cost of cigarettes should also prompt some people to quit, Traini said.
The Assembly heard mostly favorable public testimony on the tobacco tax boost at its Oct. 26 meeting, but delayed its discussion and vote until this week. Patti Ginsburg, board member of the American Lung Association of the Mountain Pacific, told the Assembly the evidence is clear that "increasing cigarette taxes is one of the most effective ways to reduce smoking." Other health advocates supported the tax increase for the same reason. "This is a tax so we can all live longer," said Pat Luby of the AARP.
Some people opposed the tax increase, saying it would only drive smokers to the Valley or Kenai Peninsula to buy their cigarettes.
Reference: Assembly votes to increase tobacco tax by 75 cents a pack 75 CENTS: Move cheered as way to cut smoking by young people by ROSEMARY SHINOHARA
(firstname.lastname@example.org), Anchorage Daily News, 11/10/2010.
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