The Kenai Peninsula Borough Assembly voted down a proposed tobacco tax at its meeting Tuesday night.
The measure had originally been offered up as a sin tax by the borough mayor’s office. But after spending a couple months working out the language and the details, the collective stance of the assembly on taxes hasn’t changed. The fiscal note from the borough estimates the five cent tax per cigarette will generate nearly $5 million in revenue. Patricia Patterson, who owns Lucky Raven Tobacco in Soldotna, isn’t so sure.
“I believe your projected income on this is totally off the wall. I have been running a tobacco store for 18 years and I can show you in hard numbers, we are losing about 20 percent every year. We’re losing 20 percent because tobacco use is going down and not being picked up. Excessive taxing is doing its job.”
Assembly member Kelly Cooper said that, like so many other tax proposals, that this one targeted a specific group was a knock against it.
“When we have tried to look at different taxes, we at this table, say that we don’t want to target a small group. The people in the room are small businesses. They’re saying quit targeting small groups. I think we set a precedent and we pick and choose which groups we want to tax. I’m not going to support it.”
The Assembly rejected a motion to postpone its vote, instead voting the ordinance down entirely. Cooper also cited a better budget outlook for the borough than when the tax had originally been proposed. But the door was left open to bring it up again in the future, depending on what the borough’s annual financial report says. That report is due out later this fall.