The tobacco excise tax imposed by the Haines Assembly will levy a $2 additional charge on packs of cigarettes. (Photo by Raul Lieberwirth/Flickr Creative Commons)
After spending hours debating the idea over multiple meetings, the Haines Assembly narrowly approved targeted taxes on marijuana and tobacco products.
The assembly was split down the middle on the marijuana excise tax. It would levy a $5 fee on each ounce of pot cultivated locally.
Opponents said the tax would burden Haines’ legal pot industry before it finds its footing.
Erika Merklin echoed that objection. She is one of a handful of aspiring Haines pot entrepreneurs. Merklin also challenged marijuana’s association with tobacco.
“If you want to make people healthier, you could tax sodas or trans-fat products,” Merklin said. “I think it’s a knee-jerk reaction to tax something that people have seen as this dangerous thing but it’s coming to light that it’s really not that.”
Much of the assembly debate came down to speculation over what kind of pot businesses will be most profitable in Haines. Tom Morphet thought the tax would be better suited at the retail level, but Heather Lende thought cultivators would see the most success.
Lende and Ron Jackson argued for the tax. They said there would be expenses for the borough to regulate the new industry.
It was a tie vote. Morphet, Sean Maidy and Stephanie Scott were opposed. Lende, Jackson and Tresham Gregg supported it. Mayor Jan Hill broke the tie with a vote in favor of the marijuana tax.
The tobacco tax proposal was slightly less divisive among the assembly. But it drew community opposition.
Mike Ward owns several local businesses, some of which sell cigarettes and other tobacco products. Ward said this tax would be demoralizing to people like him, who choose to keep their establishments open in the winter even though they lose money.
“Why should a business owner go through the grinder knowingly losing money all winter?” Ward said. “Optimism and loyalty to customers and employees is why they do that. But it does get old. I submit I’m not the only person who will take a serious look at the decision to go seasonal.”
But the assembly members told Ward the borough needs new sources of revenue. Morphet spoke by phone about the compounding effects of the state budget deficit.
“We lost the public health nurse office, we lost a state trooper, we have one more year of the forestry office,” Morphet said. “This is a new era and it’s different than anything we’ve seen in 30 years. And I think this is just the first wave of it. It’s not going to be comfortable and I don’t think it’s anything that the rest of us like to do.”
Some assembly members said the tobacco tax has the added bonus of discouraging smoking. But Stephanie Scott disagreed.
“It’s my opinion that we’ve reached a pinnacle of regulation that’s going to change people’s behavior,” Scott said. “And for that reason I am not in favor of this tax at this time. I don’t think it’s going to make a healthy difference.”
The excise tax would impose a $2 fee on cigarette packs and 45 percent of wholesale price tax on other tobacco products.
Borough finance director Jila Stuart said it might bring in anywhere between $60,000 and $180,000 per year. She based the number on what other Southeast communities earn from similar taxes.
The assembly approved the tobacco tax 4-2, with Scott and Gregg opposed.
The new excise taxes go into effect Jan. 1.
I agree with Nathaniel. I would suggest a tax on coffee, energy drinks and liquor. This town consumes far more of those than tobacco and weed. Considering the problems Haines has with alcohol related illegal activities a liquor tax would make more sense and would provide a much larger income. I don’t smoke but do drink coffee, beer and wine. Why target just the smokers and not people like me? And most tourists don’t smoke but do drink. So there is another lost revenue. The assembly is not thinking this out logically.
This tax on tobacco will only bring in tax dollars on tobacco sold in town. Do the people who passed this tax really think the locals who smoke will continue to buy their tobacco here? So when a large number of locals buy their smokes out of town or online you will end up with less tax income than you had before this tax. Also if you want people to buy commercial pot you have to give them a reason to. Since its legal to grow your own this will just encourage people to grow their own and again you will loose tax income. So all this will do is lower the tax income the borough had before this tax. Brilliant!
Did the assembly even take a look at what the state wholesale tax already is? I sell fine cigars in my Skagway store. There is a 75% state wholesale tax on cigars. Add 45% to 75% and what do you get? And no, taxing cigars doesn’t make anyone healthier, or keep kids from smoking. Glad I had the opportunity to move my business out of Haines.
It should have been a general rise in local sales tax… would have impacted the entire population insted of just a minority… it’s so wrong to have the mentality that its ok because it’s unpopular or unhealthy or that every other town has already jumped off the metaphorical bridge so why shouldn’t we too. Any respect I had for the members of the assembly that voted in favor of this tragedy is now and forever gone