Haines Assembly members are divided on so-called ‘sin taxes’ on tobacco and marijuana. They heard some opposition to the proposal at a meeting Tuesday. Residents raised concerns that the taxes could hurt low-income people and a budding industry.
Over the last few months, three Haines residents have applied for five pot business applications with the state. That prompted the assembly to think about how, if at all, the borough should regulate and tax marijuana.
The group directed manager Debra Schnabel to draw up an excise tax ordinance for both pot and tobacco products.
But that idea doesn’t sit well with everyone.
“It’s a really high tax for a small percentage of our people,” said Donnie Turner.
He spoke against the tobacco tax, which among other things, would levy a $2 fee on cigarette packs. Turner said this would unfairly affect low-income people.
“You take somebody that’s an elderly person that I know that smokes a pack a day, that’s on a fixed income…they’re not gonna quit,” Turner said. “They’re just gonna eat less or turn their heat down or something else.”
Jason Adams spoke out on the other half of the ordinance: a marijuana excise tax. Adams is the manager of a prospective Haines pot cultivation and retail business called Glacier Bay Farms.
“It could be harmful to the business,’ Adams said. “And if pushes us down, which raises our prices to the consumer…the consumer will pay the tax.”
The State of Alaska already imposes a $50 per ounce tax on marijuana growers in the newly-legalized industry. The Haines ordinance would add an additional $5. That fee would be charged to the cultivator when he or she sells product to a dispensary or other business.
The assembly members had a range of opinions. Sean Maidy was concerned about both the marijuana and tobacco taxes.
“A tax on tobacco disproportionately affects the lower class,” Maidy said.
Tom Morphet was OK with the tobacco tax because it’s purpose is to discourage the use of cigarettes and other tobacco products. But he thought the borough should target alcohol instead of pot.
“I think it would tend to inhibit this industry,” Morphet said.
Heather Lende and Ron Jackson were in favor of the marijuana tax. Lende said that only relying on sales tax revenue might not make sense, because the Haines cultivators may ship their product to other towns. One potential cultivator already said that was her plan.
“Our product very well may be the raw product, and we might be shipping it to places like Juneau or Anchorage or Seattle, for that matter,” Lende said. “And it seems like an excise tax would be wise.”
Lende and Jackson also pointed out that some towns have levied much higher excise taxes on marijuana. For example, Petersburg collects $25 per ounce.
“Why are we going $5 an ounce and other cities are going $20?” Jackson said. “It seems kind of low-ball.”
The assembly didn’t come to consensus on the issue.
There is one more public hearing on the excise tax ordinance on Aug. 8, where community members will have another chance to weigh in.