Council discusses tobacco tax

Published 12:00 am Wednesday, July 2, 2003

With Gov. Bob Riley's accountability tax plan a major topic of conversation until the plan goes to a public referendum on Sept. 9,

municipalities such as the City of Andalusia have begun exploring the pros and cons of raising individual taxes, such as cigarette or beer taxes.

During the regular meeting of the Andalusia City Council Tuesday night, the council discussed the possible need of raising the city's cigarette and tobacco taxes.

Andalusia Mayor Earl Johnson reported that in the package of new bills recently adopted by the state legislature as part of Riley's revenue plan,

House Bill II deals with state taxes on cigarettes and tobacco.

"What (the bill) does is it increases the per-pack tax on cigarettes from 16 and a half cents a pack to 31 cents a pack and it doubles the tax on other tobacco, including smokeless tobacco," said Johnson. "The third thing it does is restrict the ability or stops the ability of local governments from increasing their tax on cigarettes or tobacco after the effective date of the act. All of these taxes will be voted on on Sept. 9."

He said if Riley's plan passes, the effective date of the plan will be Sept. 30, and said the act states that after Sept. 30, no local government can increase its taxes on cigarettes and tobacco.

"Our present tax on cigarettes is 4 cents a pack, and that ordinance was passed in 1968," said Johnson. "There has been no increase or decrease since that time."

During the council's workshop session earlier on Tuesday, Rick Jones of Andalusia Distributing Company voiced his thoughts on the possibility of increasing the cigarette/tobacco taxes.

Jones noted that a lot of cities, such as Elba, had "gone beyond reason" in terms of the cigarette taxes, and noted that cigarette use has dramatically decreased over the past several years.

He also noted that if the city were to raise the cigarette taxes or tobacco taxes, many people would be likely to leave the city limits and purchase their products elsewhere to save money.

Although Johnson said he is not advocating an increase in taxes, he said he felt there were "plenty of needs" that could be addressed with the increase in such taxes.

"I am not advocating one way or the other about whether or not to increase taxes, but I think it's my responsibility as mayor to make you aware that there is a legislation pending that will affect your ability or any other city council's ability in the future to affect a tax increase on tobacco products. That is the purpose for this discussion," said Johnson. "This is not as they said on WAKA (Monday night during its 10 p.m. newscast) that we wanted to raise our sales taxes 16 and a half cents for a pack to 31 cents a pack. I don't know where that came from and that is not what we advocate doing."

Johnson urged the councilmen to talk to their constituents about the tax issue. "Presently, the city raises about $75,000 a year on cigarette tax and about $15,000 on other tobacco tax so that highly impacts our budget as far as our income at the present time," said Johnson. "We are in contact with the League of Municipalities and are talking to other cities in the state as far as the approach they are going to take on this issue. You will probably have a mixed bag, with some cities increasing the tax and some who are not. I guess it depends on how you think it will affect your community."

Although the council did not take action on the issue Tuesday, Johnson said if the city does decide to take action with the tax issue, it would need to do so prior to Sept. 30, assuming that Riley's plan passes on Sept. 9.