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Councilman: ‘Frankly…Richmond needs to implement a cigarette tax’

RICHMOND, Va. -- While enjoying a smoke break, several smokers debated a proposal by City Councilman Parker Agelasto (5th District) to impose an 80-cent per pack cigarette tax in Richmond.  For comparison's sake, New York City's cigarette tax is $1.50 per pack and Norfolk's is 85 cents per pack.

"If it's going to the schools, I don't see a huge issue with that," one man said.

While they said they're mostly okay with paying more for smokes and they don't oppose the proposal, they still have some concerns.

"I don't like this proposal because I don't like the idea of funding education other than raising taxes on everybody," another man said.

Agelasto said the increase would raise an additional $5 million annually that he wants to put toward funding school maintenance.

"Frankly, when we have looked at where we should be raising revenues, constantly independent studies have come back and said Richmond needs to implement a cigarette tax," Agelasto said.

While the meals tax increase already passed by council will raise enough money to fund four new schools, the mayor's budget only includes roughly $13 million over five years for school maintenance, and the school system said they need $92 million.

"The cigarette tax isn't going to nearly be enough, but at the same time there is no other proposal on the table to find the revenues to help with this," Agelasto said.

A Richmond parent with a son who goes to George Wythe High School said he supports the increase.

"County schools look real good. Richmond City, something needs to be done, and I'm approving that, I would definitely approve that," the parent said.

But the owners of the Sunoco gas station on Jefferson Davis where he bought gas, said the increase could crush their business.

After all, Chesterfield County does not impose a cigarette tax.

"Our location is really close to Chesterfield County, so all our customers gonna drive up to Chesterfield County to buy their tobacco products," one of the owner's said.

Opponents of the meal's tax would often express fear that the same thing would happen.

The owners started a petition opposing the proposal, and their Councilwoman Reva Trammel (8th District) said she will vote against the ordinance based on what her constituents want.

She said a lot of them are retirees of cigarette maker Philip Morris, or folks who still work making tobacco products.

"I'll have to vote no," Trammel said.

By comparison, New York City's cigarette tax is $1.50 per pack, and Norfolk's is 85 cents per pack.

Still, even with the tax, these guys said it won't stop them from smoking.

"Remember when we said, back in the day, when cigarettes became five dollars I'm going to stop smoking? Now they're six dollars, and we're still smoking," one man said.

We asked the mayor's spokesperson, Jim Nolan, if the mayor would support a cigarette tax.

He sent us the following statement:

“The Mayor believes it is fiscally imprudent to bond against a declining revenue source, but as he has stated before, he is open to a cigarette tax as a potential revenue source for the general fund.”

Richmond-based Altria, which owns three tobacco operating companies, including Philip Morris, also released a statement:

"Our perspective is that cigarette taxes unfairly burden a small percentage of Richmonders and are an unreliable source of revenue, which often creates budget shortfalls that must be filled with new revenues. Where a local cigarette tax is enacted, many adult smokers simply take their purchases to the surrounding counties. We’ve seen this happen in other Virginia jurisdictions and across the U.S."

The cigarette tax is ORD. 2018-031 and it is currently sitting in the Finance and Economic Development Standing Committee, to be heard again at 5 p.m. on Thursday, March 15.

It could be sent back and voted on at the Monday, March 26 City Council meeting.