HomeMy WebLinkAboutCC 6 TAX ON CIGARETTES 4-20-81DATE:
April 13, 1981
4-20-81
TO:
FROM:
SUBJECT:
HONORABLE MAYOR AND CITY COUNCIL
NANCY MIr.T.~R, ADMINISTRATIVE AIDE
SB 490 - INCREASED TAX CN CIGARETTES
SB 490 (Sieroty) would increase the State Cigarette Tax from 10~ per pack of 20
cigarettes to 20~. The cigarette tax is currently a unit tax which has not been
adjusted since 1967 and proponents of this bill say it has not kept pace with
inflation or the rising price of a pack of cigarettes.
The revenue received from the cigarette tax is split between the State and local
governments, with the State receiving 70% of the revenue and the local government
30%. Eadn city receives its share of the revenue based on a formula, according to
population and point of sale.
Last year the City of Tustin received approximately $183,000 in general fun~
revenues from the cigarette tax and expects a like amount this year. If SB 490 is
adopted, the City could expect an additional $183,000 in revenue, for an annual
total of approximately $366,000. The State has earmarked their share of the
proposed increased revenues for health education and Medi-Cal programs.
SB 490 will require a two-thirds vote since it increases a state tax an~
therefore, bipartisan support is necessary. The bill will first be hear~ Dy the
Senate Co~.--mittee on Revenue and Taxation.
RECOMMEN]DATION:
It is reco.-~nended ~hat ~is item be reviewed by fbuncil and if Council supports
the concept of this bill, a letter to our legislators and the CoRmittee members
will be drafted for Mayor Sharp's signature.
Administrative Aide
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