The Haines Assembly delayed a decision on a tobacco excise tax because of a major business owner’s letter in opposition.
Most of the assembly members are leaning in favor of the tax. It would impose an additional $2 charge on cigarette packs and 45 percent of wholesale price tax on other tobacco products.
The majority of the assembly thinks the tax is one of the better options Haines has to raise revenue in light of a deficit budget.
“Smokers are not a protected class. They have no special rights,” Assemblyman Sean Maidy said. “It’s not that we’re charging someone for choosing to smoke, it’s that we’re targeting an avenue of taxes that we could collect that other similar communities collect, that are still not outrageous compared to other communities.”
Juneau collects a $3 tax on cigarette packs and Sitka charges an extra 50 percent on those items.
The assembly has heard opposition from people who think the tax will unfairly harm lower-income residents. At this meeting, the group received a letter from Mike Ward. Ward owns a bar, restaurant, convenience store, grocery store and other local businesses.
In his letter, Ward says he is so upset by the tobacco tax proposal that he is considering seasonally closing his businesses which lose money in the off-season.
“Why should I lose money and collect taxes for the entity that is making decisions detrimental to the future of my businesses and our economy?” Ward writes.
Ward was not present at the assembly meeting. But his letter had an effect. Assemblywoman Heather Lende suggested they wait to make a decision until they can talk with Ward about his concerns. The tax ordinance has already been through multiple public hearings.
“Mike has a significant investment in the community, I feel like he does a lot of good…and I was unable to contact him today and I understand he’s out of town,” Lende said. “So I’d feel more comfortable in moving this to a [another] public hearing so we can hear from him.”
The assembly voted 4-2 to postpone the ordinance until the Oct. 10 meeting. Maidy and Stephanie Scott were against to delaying it.
There will also be a hearing on a marijuana excise tax at that meeting. The proposed $5 per ounce pot tax has been more divisive among the assembly members.