As Philly preps new cigarette tax, old tobacco revenues drop
Will city still raise expected $90M?
A day before Philadelphia's expanded tobacco tax adds a $2 per cigarette pack levy to the existing three-year-old tax on chewing tobacco, the city's elected Controller, Alan Butkovitz, warns of an unexpected 11% drop in that older tobacco tax's collections, to $650,000 in fiscal 2014, from $728,000 last year.
Does that tell us anything about whether the city is likely to raise the $90 million it hopes to raise from the smokers' tax in the next year? "It raises a red flag," Butkovitz told me. "We don't know if people have changed their chewing habit, or if it's a health thing, or if it has changed people's traveling-to-shop habits, which would be the biggest alarm."
State smoking tax collections have tended to drop a couple of percentage points a year as fewer people smoke (the state has boosted rates to compensate), but that's "marginal" compared to what's happened with Philly chew, Butkowitz says. It raises again the question debated relentlessly during the cigarette tax struggle: "Will people drive to City Line Ave. to buy a carton of cigarettes at Wawa (where the $2 a pack tax doesn't apply), instead of buying a pack at the 7-11 down the street?"
Total city revenues were up 4% from last August, more here.
