Poll: Public supports 6 percent tax on alcohol, tobacco, marijuana

At liquor stores, customers complain but keep buying

P.J. Roberts keeps bottles free of dust at the AC Liquor Store. (Feb. 18, 2020) Photo by Zachary Snowdon Smith/The Cordova Times

Most residents approve of a recently implemented tax on alcohol, tobacco and marijuana products, according to a poll by The Cordova Times.

The 6 percent surtax on alcohol, tobacco and marijuana products went into effect Jan. 1. A January survey by The Cordova Times found that 68.96 percent of respondents approved of the surtax.

City Council was initially resistant to any kind of tax increase, said City Manager Helen Howarth. However, the council eventually passed a tax targeting alcohol, tobacco and marijuana products, rejecting a general sales tax increase that would have affected all products.

Before proposing the tax, city staff consulted with local liquor stores and bars to estimate potential revenue benefits. While alcohol vendors were hardly overjoyed by the prospect of a tax increase, they were generally willing to accept it, Howarth said.

“We felt we were standing on solid ground in saying that these kinds of activities are a burden to our community, and we’re going to have to ask folks who involve themselves in that to pay a little bit more to help out,” Howarth said. “In general, there’s no interest on the part of council to raise taxes, at all, ever… But there comes a point where you can’t cut any more and still provide services to the community that are needed.”

The surtax has yet to make a significant dent in business, said staff at local alcohol vendors. Customers grumble while paying for their drinks — but they still pay.

William Osborn, manager of Laura’s Liquor, asks why alcohol and tobacco consumers have been singled out to pay for a budget shortfall unrelated to alcohol or tobacco.

Taxes on alcohol and other products were used to help close a gap in the city budget. (Feb. 18, 2020) Photo by Zachary Snowdon Smith/The Cordova Times

“If you’re going to be targeting these groups, the revenue should be benefiting these groups in some way or offsetting the costs of these groups in some way,” Osborn said. “I don’t hate the idea, and I do understand that they need to increase revenue, but the way they’ve gone about it could have been done a little better.”

The surtax is likely to have greater impact on tobacco revenue than alcohol revenue, Osborn said. Several Laura’s Liquor customers have already switched to buying tobacco online, he said. The Food and Drug Administration’s December decision to increase the minimum age to purchase tobacco from 18 to 21 further complicates the position of tobacco retailers.

“Most people in a small town like this probably have a friend who’s old enough to go get it,” Osborn said. “But it definitely makes it harder for them that they can’t walk into the store and purchase what they had been just a few days before.”

The surtax also poses a challenge to the New Company Store, a marijuana retailer planned to open in Cordova later this year. A 6 percent surtax on an already taxed commodity will only make it harder to draw consumers away from black-market dealers, said Councilwoman Melina Meyer, owner of the New Company Store.

“There’s a lot of unknowns going on right now,” Osborn said.