The Assembly repeals regulations imposing a tax on tobacco and financing childcare

Assemblyman Bill Elam speaks during the Kenai Peninsula Municipal Assembly meeting on Tuesday, June 4, 2024. (Jake Dye/Peninsula Clarion)

An attempt to introduce two ordinances that would have created an excise tax on tobacco products and then used its revenues to fund a child care scholarship funding program failed during the Kenai Peninsula Municipal Assembly’s last regular meeting on Tuesday, June 4.

The first ordinance, which would have established a tax on tobacco products, was defeated 5-3 before being introduced. Due to the lack of a cited funding source, the second regulation establishing a child care scholarship funding program was withdrawn by the sponsor.

The 2024–2015 ordinance, sponsored by Assembly Speaker Brent Johnson and Assemblymembers Cindy Ecklund and Mike Tupper, was intended to combat the lack of affordable, accessible and high-quality child care and the adverse impact of child care shortages on the available workforce in the commune.

The 2024-2014 regulation proposes a tax on tobacco products to finance the childcare regulation. It would impose a tax on “all cigarettes and tobacco products” at a rate of $0.05 per cigarette, or 35% of the price of tobacco products.

The regulation also includes wording that defines vaporizers and e-cigarettes as tobacco products that would be subject to tax.

During a committee meeting before Tuesday’s regular Assembly meeting, Ecklund said the tax would generate about $4 million annually.

“The reason for this initiative is to create funds for several needs throughout the borough,” Ecklund said.

According to Ecklund, 34% of the excise tax would be allocated to the maintenance and care of school buildings owned by the municipality, 30% to financing start-ups and existing child care facilities in the municipality, 15% to the maintenance and improvement of the functioning of municipalities owned by administrative buildings, 1 % will go to the Alaska Stop Smoking Line for “educational purposes” and the remaining 20% ​​will go to the municipality’s general fund.

“We developed this regulation because we were aware of the crisis in child care and we were trying to find a way to help them,” she said. “The Borough and Borough of Anchorage just approved taxing marijuana to fund child care… that was an example we thought could work.”

Ecklund also provided information about 22 other municipalities and cities in the state of Alaska that have already introduced an excise tax on tobacco or tobacco products.

Both ordinances were scheduled to be introduced at the June 4 meeting and were originally scheduled for a public hearing on July 9. None of them have seen any support or progress from the group. Assemblyman Bill Elam moved these two ordinances from the assembly agenda for further consideration.

“I believe that – in particular (the regulation for 2024–2015) – is significantly beyond the scope of the powers we have in the commune,” he said. “There’s certainly a discussion to be had about the different reasons and the funding and where it goes, but if you look at the budget that the mayor put together, we’re doing well with what we have. We finance basic services provided by the commune. Getting into social programs is something we have not consistently done.

The introduction of a proposed excise tax on tobacco products was rejected by the assembly by a 5 to 3 majority. Johnson, Ecklund and Tupper voted in favor of introducing the 2024–2014 regulation; Assembly Vice Speaker Tyson Cox and Assemblymembers Kelly Cooper, Bill Elam, Brent Hibbert and Ryan Tunseth voted not to introduce the ordinance. Assembly Member Peter Ribbens was absent from the meeting.

Johnson said he supports the tobacco tax regulation because he wants to prevent children and young people from smoking. He said the tax would probably not make people quit smoking, but he had reason to believe the tax could make young people less likely to start smoking.

“There will be children who will not become addicted to tobacco because we have raised the price,” he said. “For me it’s worth it.”

Opponents of the ordinance, including Tunseth, Elam and Cox, argued that both ordinances would require the municipality to step out of its lane and take on health and social responsibilities that it does not and should not have to perform as a second-class entity. city.

Kenai Peninsula Borough Mayor Peter Micciche said during the ordinance discussion that the borough shouldn’t make any effort to control people’s decisions if those decisions don’t impact others. Raising taxes to discourage people from smoking would violate that, he said.

“This is a dangerous intersection in the Kenai Peninsula Borough,” he said. “We chose a second-class district. We must remain vigilant and oppose these insatiable ministries.”

Without the funding secured by Order 2024-14, the child care allowance proposed under Order 2024-15 was withdrawn by Ecklund and did not advance to a vote in the Assembly. Both Johnson and Tupper, as co-authors of the regulation, agreed to withdraw it from consideration.

Ecklund reiterated that the 2024-2015 ordinance, by supporting new and existing child care centers in the borough, is a way to support the borough’s economy.

“It’s not about social welfare,” she said.

More information about the 2024-14 and 2024-15 ordinances can be found on the municipality’s website at kpb.legistar.com.

Contact reporters Delcenia Cosman and Jake Dye at [email protected] or [email protected].