Smokers take yet another taxing blow

Published 12:00 am Monday, May 17, 2004

You really can’t blame R.J. Reynolds for coming up with a stat-filled web page called “My Smokers’ Rights.”

They soon will need to update the Alabama section, and just about every municipality inside the state — including Demopolis.

A conference committee in the Alabama Legislature approved a 23-cent tax increase on each package of tobacco during Wednesday night meetings. And cities like Demopolis will feel the brunt of the package, once it passes the entire legislature.

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Last week, members of the Demopolis City Council passed an “if” ordinance. If the Alabama Legislature approves the increase in tobacco tax, municipalities — under the same legislation — will be barred from raising local taxes on tobacco.

“It’s something we have to consider,” Demopolis Mayor Austin Caldwell told members of the council last week.

From a revenue perspective, it’s a good thing the council took Caldwell’s advice. Last week, it was unclear whether the tobacco tax would pass in Montgomery. Now, passage seems imminent.

Along with a state tax hike of 23 cents per pack, Demopolis decided to double its tobacco tax from 4 cents a pack to 8 cents. That ordinance, which passed, included language that puts the tax in effect only if the Alabama Legislature gives formal approval to the bill. And Wednesday night, approval was all but guaranteed.

Demopolis isn’t the only city that has quickly passed a tax increase on tobacco. In Montgomery, that city council hiked the tax per package from four cents to 12 cents.

If all goes as expected on Monday — the last day of the Alabama Legislature’s 2004 regular session — a pack of tobacco in Demopolis will cost an additional 27 cents.

With that statistic, it’s simple to see the logic behind organizations like R.J. Reynolds who manufacture tobacco products and don’t like to see the continued criminalization of their product.

According to the company’s “My Smokers’ Rights” Web site, Alabama communities bring in $22.9 million in local sales tax on tobacco products. The state of Alabama rakes in $62.5 million each fiscal year from the tax. And the federal government, which taxes each pack at 39 cents, brings in $7.5 billion each year from cigarette tax collections.

To R.J. Reynolds, Alabamians pay far too much in just cigarette taxes.

From just the collections in Alabama, cigarette taxes are enough to fund the Alabama Department of Public Safety and the Department of Senior Services, combined. The tax collections also could fund the state’s allocation to Troy State University and the Alabama Institute for the Deaf and Blind with $188 million left over.

The most interesting statistic provided by R.J. Reynolds, through research done by surveyors Orzechowski and Walker in Virginia, is the specific breakdown of cigarette taxes paid.

According to the firm, Alabamians pay $252.5 million in cigarette taxes each year. That translates into $691,438 per day; $28,810 per hour; $480 per minute; and $8 per second paid in cigarette taxes.