An excise tax on tobacco will go to a fourth public hearing after strong words from community members opposing the tax who said they’d “make sure the borough loses tax dollars as a consequence of this overreach” and that the tax would cause smoking parents to spend less money on their children.
The proposed tax would levy $2 per pack of cigarettes and 45 percent of the wholesale price on other tobacco products.
Mayoral candidate Joanie Wagner was the only member of the public to speak during the hearing. She said the tax won’t make people quit but it would cut into their household budgets.
“That could be food for their kids,” Wagner said. “They could water down their milk a little bit in order to stretch the budget out a little bit longer, and heat; maybe they’ll turn their heat down a little bit and I think that maybe the kids may wear shoes that their feet are a little bit too big for.”
Wagner said if the tax were implemented it would make people go to Juneau to buy cigarettes and groceries.
Assembly member Heather Lende read a letter from business owner Mike Ward, who objected to the proposed tobacco tax. In his letter, he threatened to close his businesses to cut off sales tax revenues should the assembly pass the tax.
“I will go out of my way to not collect taxes for the Haines Borough,” Ward wrote. “I will close businesses during months that I typically lose money. I will make sure the Borough loses tax dollars as a consequence of this overreach! I will actively be looking for another community to invest in. Rather than build a new restaurant in tax hungry Haines, I will look elsewhere. You are taking the Haines Borough down the wrong path.”
Lende made a motion to provide another public hearing on the tax to hear from Ward.
“He is a major employer and it’s a serious concern,” Lende said. “I’m not exactly clear what that is, why his objections are so forceful, and how we would be harming his business and I think we owe it to him to hear that.”
Assembly member Ron Jackson said he’d be ok with giving the public another opportunity to comment on the proposed excise tax but that he was skeptical of the arguments against it.
“I can’t agree with the argument that a tax like that will have people going long distances to incur great expenses to buy cigarettes somewhere else and if Mike is seriously thinking that will affect his business so much he needs to close, well I’d like to hear the rationale for that.”
Assembly member Stephanie Scott is against the proposed tobacco tax. She described the tax as arbitrary and asked why the borough didn’t tax diapers.
Assembly member Sean Maidy responded and said diapers are different because they’re “essential to the babies.”
“We’re targeting an avenue of taxes that we could collect that other communities collect that’s still not outrageous compared to other communities,” Maidy said.
The assembly voted 4-2 to allow another public hearing, with Scott and Maidy opposed.
The hearing is scheduled for Oct. 10.