City expenses are up. State and federal funding is down. And the City passed a budget Tuesday night that will put only $4,800 in Nome’s savings account this upcoming fiscal year.
Amid these tight economics, the City is looking for ways to generate revenue, and the Nome Community Alcohol Safety Team has a solution: raise taxes on alcohol and tobacco from 5-percent to 8-percent.
Nome City Clerk, Tom Moran, explained what that increase would mean for customers: “The way is goes now is Hanson’s and AC and Bonanza and Nome Liquor Store and all the other places that sell tobacco and liquor impose a 5-percent sales tax. So if you were spending $5.00 on a can of chewing tobacco, you’d pay $5.25 at Bonanza to acquire it. And if it went to 8-percent, instead of $5.25, you’d be paying $5.40 on a can of chewing tobacco.”
Moran said raising taxes on alcohol alone is projected to raise $150,000 in additional revenue for the City. That projection is based on alcohol tax collection data from fiscal year 2012. That money would help fund City departments like the ambulance and police force, services often responding to alcohol-related instances.
More than a revenue generator, the Community Alcohol Safety Team is pushing the tax hike as a social issue. Lisa Ellanna Strickling is the Team’s Coalition Coordinator.
Strickling explained how the higher tax would help youths in the community: “Increasing alcohol taxes and tobacco taxes makes alcohol and tobacco less accessible to youth. And the longer you delay youth and their first use and exposure to alcohol use, the less likely they are to have that as a problem in their lives and the less likely they are to get into other substances. Because alcohol is now seen as the gateway drug.”
The research Strickling referenced is from the National Institute on Alcohol Abuse and Alcoholism. The same study notes raising alcohol taxes decreases high-risk sexual behavior thereby reducing rates of sexually transmitted infections. The Safety Team cites additional benefits from higher alcohol taxes like “reducing excessive alcohol consumption and related harms” and decreasing “deaths caused by alcohol related diseases.”
But not everyone supports the tax hike. Stan Anderson is a Nome City Council member and said the increase puts a disproportional tax burden on alcohol and tobacco users.
Anderson said: “To me you’re taxing the responsible drinker, and you’re still not getting at the problem.”
The proposal is currently before the City Council. For the increase to take effect, the Council has to approve the tax by the end of July, and it would move to public vote in October.