Richmond leaders considering cigarette tax

Richmond leaders considering cigarette tax
Richmond City Council is expected to vote on a proposal to tax cigarettes.

RICHMOND, VA (WWBT) - Richmond leaders are considering another possible tax increase after increasing the meals tax.

A city councilman wants a cigarette tax and says the money raised would help with maintenance of Richmond Public Schools.

On July 1, it'll cost you more to dine out in Richmond. That's when the higher meals tax rate kicks in. But that $150 million is specific for phase one of the new facilities plan.

RPS has identified several other buildings that need immediate attention.

"What is the meals tax rate gonna be when we have to build 40 new schools and not just four? I'm trying to maintain the engine so that we can keep driving the car," said Councilman Parker Agelasto.

Agelasto is proposing an 80-cent tax on a pack of smokes in the river city. Right now, 92 other localities in the Commonwealth have a cigarette tax, and 80 cents a pack would be comparable to Northern Virginia and Hampton Roads.

"I keep hearing arguments that we are at the highest tax bracket of anything in the region, and this is the only one that we don't even tax. Not even dime," said Agelasto.

Agelasto estimates the 80 cent tax per pack would bring in about $5.3 million a year. Altria thinks otherwise.

Representatives from Philip Morris USA are urging council to vote against the tax, saying fewer people are smoking and the revenue stream isn't sustainable.

Agelasto commends Altria for what he calls generous donations to RPS and local charities, but he also says since fewer people are smoking, the less tax money the city gets directly from Altria.

"If they struggle, the city struggles, and we have to figure out where to come up with alternative sources, and frankly I don't think the city implementing a cigarette tax is going to do a heck of a lot of damage to a multi-billion dollar corporation," said Agelasto.

Agelasto has proposed a cigarette tax before. Last year, it failed to pass with only two votes in support. The tax proposal won't come to a vote before late April.

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