On Tuesday, Unalaskans will vote on a proposal to raise the local sales tax on alcohol, tobacco, and marijuana from three to six percent.
KUCB’s Laura Kraegel sat down with City Manager Dave Martinson to learn more about Proposition No. 1, sponsored by the City Council.
KUCB: What is this proposal exactly? What is it asking the voters to decide?
Martinson: The proposal is whether to increase the amount of sales tax on marijuana, alcohol, and tobacco by three percent, effectively doubling the cost for taxation.
KUCB: How did this measure end up on the October ballot? I understand it’s part of the regulation process that’s been unfolding since Unalaskans voted to legalize commercial marijuana last year.
DM: The council still needed to make decisions after that vote turned out to allow for the commercialization of marijuana. One of the things it allowed us to do was propose an opportunity to increase the tax revenue on based on marijuana. And included in that could be tobacco and alcohol.
KUCB: So alcohol and tobacco didn’t have to be included in this proposal? That’s a choice councilors made during the process?
DM: That was a choice. Didn’t have to be that way. It could have been three percent across the board. They could have [raised] it one percent, two percent, three percent on just marijuana. In this case, what they opted to do was take those three items and increase the tax by an additional three percent to offset some of the costs going toward health care, education, and the Department of Public Safety (DPS).
KUCB: You talk about “offsetting” costs. During the council’s discussions, I believe that was the driver behind this proposal? The city spends money regulating pot, alcohol, and tobacco. The calls received by DPS often involve pot, alcohol, or tobacco. So the council wants those items to help pay for their own aftermath, so to speak?
DM: That is kind of the summary of the discussions that happened with the public in those meetings. You know, providing additional dollars or offsetting the dollars to educate on the effects of those particular items at the school. In essence, it allows us to have an increased amount of revenue to offset some of those costs, with regard to what we provide to the clinic, the school, and what happens in DPS.
KUCB: How much revenue would the city generate if this proposal passes? No one has pursued a commercial marijuana business yet, so that’s an unknown quantity. But what about alcohol and tobacco?
DM: It’s hard to say. We don’t necessarily track things by the item, so I couldn’t even fathom a guess as to what it would do to an increase in the actual revenue.
KUCB: Finally, for the voters, what would it mean to vote “yes” on ballot Proposition No. 1 on Tuesday? What would it mean to vote “no”?
DM: A “yes” vote would authorize the added three percent on those three particular items. A “no” vote would mean all of them would be taxed as three percent.
The measure needs a simple majority to pass. If voters approve it, the new sin tax will go into effect Nov. 1.