Tobacco tax on borough agenda, sales tax cap ordinance dropped

Tobacco tax on borough agenda, sales tax cap ordinance dropped

While the borough’s budget has been settled for the coming year, the assembly members are still looking at revenue possibilities.

At its upcoming meeting Aug. 7, the assembly is scheduled to introduce an ordinance that would establish a borough-wide excise tax on cigarettes and other tobacco products. Assembly member Willy Dunne, the sponsor, wrote in a memo to the assembly that the state and other municipalities have tobacco taxes, and a 5-cent per cigarette and 10 percent tax on other tobacco products would bring in about $4.8 million for the borough annually.

“Additionally, it is anticipated that the increased cost of cigarettes and other tobacco products will deter the use of tobacco, especially by the youth,” he wrote.

Dunne’s ordinance follows a similar proposal from Borough Mayor Charlie Pierce, who withdrew his version at a prior meeting. Several members of the public testified against the tobacco excise tax, saying it was unfair to single out that industry.

The assembly has been working on solutions to the borough’s budget gap for two years, working it down to about $2.5 million with the combination of budget cuts and a .2 increase to the property tax mill rate this year. Multiple revenue options, including a proposed bed tax and sales tax increase, were shot down during the discussions this year.

Another option, which would have removed the requirement for voter approval to increase the cap on taxable sales in the borough, was withdrawn at the assembly’s July 17 meeting. Kenn Carpenter, the sponsor, said he didn’t receive enough feedback from the public on the proposal and didn’t feel comfortable going forward with it without more commentary.

“To make it clear, I could have proceeded,” he wrote in an email. “However, I did not want to pass something without the public being involved. I may want to revisit this later this year or next but it did not feel like the right time or thing to do at this time.”

He said he hoped more people would offer feedback on issues before the assembly in the future.

The assembly has tried twice in the last three years to ask for voter approval to increase the cap on taxable sales from $500 to $1,000. Voters have returned a decisive “no” both times. Carpenter’s ordinance would have revised borough code to allow the assembly to increase the cap without voter approval, the same way it can increase the property tax rate without voter approval.

Reach Elizabeth Earl at eearl@peninsulaclarion.com.

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