Alexandria residents looking to light up a smoke -- or even park a car -- will feel their wallets getting lighter under a pair of proposals scheduled to come before the City Council this week.
City Manager Rashad Young has proposed a 10-cent increase in the city's cigarette tax, raising it to 90 cents a pack, the highest tax rate in the state. Young also is recommending that the council extend parking meter operating hours by two hours, from 7 p.m. to 9 p.m.
The two proposals, included in Young's 2014 budget plan, are expected to raise a total of $654,000 for the city at a time when it is trying to close a $31 million budget shortfall.
Young's proposed cigarette tax hike would generate an additional $334,000, he said, and push the city's overall revenue gains from smokers to nearly $3 million. If approved, it would be the first time Alexandria raised the tax since 2009.
Mayor Bill Euille said he was in favor of the proposed increase, something the city "does incrementally so as not to raise taxes every year." But the increase has residents concerned that the city may actually lose money because of declining cigarette sales.
"Virginians could still shop for cheaper smokes outside of Alexandria in other parts of the state," said Pete Sepp, executive vice president of the National Taxpayers Union. "It's as if Alexandria would be hanging out a sign that says, 'Shop someplace else.' "
Paul Carey, chief of enforcement at the Northern Virginia Cigarette Tax Board, said cigarette sales have been decreasing nationwide because of smoking bans imposed on restaurants and bars, but a higher tax shouldn't havemuch affect on cigarette sales.
"You may lose a few pack sales, but then gain it back on the increased revenue," Carey said. "It's more of a convenience-type thing. You can stop for gas and get a pack of cigarettes. ... It's one-stop shopping."
Alexandria's 90-cent tax is the highest in Virginia, slightly more than the 85-cent rate charged by both Fairfax City and Newport News. At least nine Virginia localities tax cigarettes at less than 5 cents a pack.
Alexandria officials are also considering a two-hour increase in parking meter operating hours, meaning drivers will now have to pay to park until 9 p.m. Young said the extra hours will generate an additional $320,000 a year.
"I'm not all that keen about it," Euille said. "But it's something I plan on supporting. Certainly, parking in Old Town is congested and this is a congestion solution."
The City Council is scheduled to meet Tuesday at 7 p.m. in City Hall, 301 King St.