Proposal to increase revenue just a drag to opponents

May 17, 2005

DARRELL L. BREESE/Frontiersman reporter

WASILLA - Cigarette butts littered the parking lot near the place where 18-year-old Patrick White stood smoking a cigarette, mulling over the proposed $1-a-pack Mat-Su Borough cigarette tax, which is slated for a public hearing tonight in assembly chambers.

"It's already too much," said White, who plans to keep smoking even if it costs more. "It's just what I do. I guess I'll work an extra hour."

Facing a jump in the price of cigarettes makes many smokers, like White, unhappy. They have been expressing opposition to the proposed tax, which would create a borough tax of $1 a pack for cigarettes.

White disagrees, saying that smokers already had ample incentives to quit: Fear of cancer, ostracism that's driven them onto the streets to smoke and previous state tax increases that have pushed the price of a pack of smokes to more than $5.

Dennis Oakland, who has worked in support of establishing a property-tax cap, also opposes the cigarette and tobacco tax. He believes the tax is a poor solution to a much larger issue.

"It is easy to demonize cigarettes and tobacco so people will rally in support," Oakland said. "The borough should be looking for ways to make smart spending cuts to balance the budget, not looking for politically expedient taxes to hike."

Mike Butler, owner of Up-N-Smoke 2.0 discount tobacco store, believes that if approved, the cigarette tax will drive a lot of his customers and taxable sales underground and out of the borough.

"I've heard talk in the store," Butler said. "People are saying, to avoid the tax, they will buy cigarettes in Kenai, when they're on a fishing trip, or over the Internet. They are willing to risk criminal prosecution."

Bringing cigarettes into Alaska by buying them over the Internet to avoid taxes is illegal and is punishable by either fines or jail time.

"People are like water," Butler continued. "It runs to the lowest point and people will find the lowest price - whether that be in the Valley or Kenai or on the Internet. That's just part of doing business in a free-market economy."

Supporters of the tax tout the health benefits and incentive for smokers to kick the habit.

Felicia Tolbert, 32, of Wasilla, has smoked for years. She admitted that a tax hike might force her to consider quitting her $100-a-month habit, but shook her head at the idea.

"I go through a pack in a day and a half, on average," she said. "I'd like to quit. I stopped once for three weeks, but it's difficult. I can cut down again, because I used to smoke a pack and a half in less than 24 hours. I know it is unhealthy, but so is a Big Mac, and they aren't taxing them."

Butler questioned the supporters of the tax who are attempting to make it a health issue when that is not the stated purpose of the tax.

"The assembly is considering this purely as a way to raise revenues," he said. "If they want to address the health issue they should simply ban tobacco altogether. The members of the assembly are only interested in the dollar signs. They want to fill a budget gap on the shoulders of a handful of people, and that is wrong.

"What is the plan next, when the next budget gap comes along? Do we start raising taxes on beer and French fries?" Butler said. "The assembly ought to make the tough choices that slow the growth in government instead of taking the easy way out by raising taxes on specific items."

Butler has taken action, distributing petitions all week from others who feel the cigarette and tobacco tax places an unfair burden on a small group of people. He plans to deliver that list to the assembly during the public-hearing portion of the meeting.

If the tax goes into effect, the borough would have the third-highest per- pack cigarette tax in the nation, behind New York City ($3) and Anchorage ($2.90). The combination of the $1.60 state tax and the $1 borough tax will mean that smokers will pay $2.60 a pack in state and local taxes.

That does not reflect the scheduled 65-cent increase in the state taxes slated for 2006 and the 39-cent-per-pack federal tax.

"Right now over half of what people pay for a pack of cigarettes is in taxes," Butler said. "I'd like to think that people would be up in arms if half of what they paid for a loaf of bread was taxes."

Butler also was concerned with the involvement of Anchorage Mayor Mark Begich in the introduction of the tobacco tax, indicating he heard rumors when a similar tax passed in Anchorage that Begich had plans to pursue the tax in the borough.

"Begich is trying to cover his ass," Butler said of a similar tax being promoted by him in the Valley. "He promised the people of Anchorage property tax relief by taxing smokers. Unfortunately for him, the smokers came to the Valley and he is having a tough time keeping his word.

"This isn't Anchorage," he continued. "The assembly and the people in the Valley shouldn't be fixing an Anchorage problem."

Although he didn't intend to be the champion for those opposed to the tax, he has accepted his role. A part of his duties includes rallying supporters to attend the assembly meeting.

"If half the people who said they would come show up, there won't be room for everyone," Butler said. "The people I've spoken to are not just concerned about this, but also having a tax imposed without being decided by the voters."

Darrell Breese can be reached at 352-2267 or darrell.breese@

frontiersman.com.