Smokers beware, the increase on a pack of cigarettes isn’t the local corner store price gouging, but rose from a state tax increase to reduce a more than $400 million budget shortage.
Starting today, the affect of a tax bill will raise the price of cigarettes across the state by 50 cents per pack. State sales tax will also increase from 6.15 percent to 6.5 percent to help the shortage. The tax bill also abolishes a number of tax deductions and lowers the property and mortgage interest deductions by 50 percent.
“I don’t think people are aware that (cigarettes) are getting ready to increase… they are going to freak out,” said Tricia Draper, store manager at Casey’s General Store near downtown Pittsburg.
At Casey’s a pack of Marlboro’s will jump to over six dollars a pack. One patron said he heard the cost per pack was increasing, but the increase had no affect on him buying a pack of Marlboro’s a day early.
The .35 percent state sales tax increase – from 6.15 to 6.5 – produces the highest rate in the state’s history and is expected to raise $380 million from July 1, 2015 to June 30, 2016.
In Crawford County, there is an additional 1 percent sales tax for the county. Any additional city sales tax is up to the discretion of the city and its voters.
Pittsburg’s sales tax of 1.75 percent is the highest in the county. Add that with the county’s 1 percent and the new state sales tax of 6.5 percent, brings the total for most of Pittsburg to 9.25 percent and Pittsburg's TIF district to 9.55 percent.
Pittsburg’s director of finance, Jamie Clarkson, wasn’t sure how the increase in taxes would affect local businesses.
“I don’t know if it’s a big enough increase to affect people’s shopping habits,” he said.
The city’s 1.75 percent is made up of: public safety debt (.5 percent), public safety (.5), capital outlay (.125), municipal auditorium (.125), economic development (.25) and street repairs (.25).
The street repairs at .25 percent were recently approved for another five years, while the .5 percent public safety debt for the new fire and police station will expire in 2017.
“I think that in a community that neighbors another state, we have got to be very careful of our tax rate as it compares to Missouri,” said Daron Hall, city manager.
Hall said he doesn’t like the tax rate being so high, but it’s a necessary evil.
“I don’t like taxes,” he said. “But I know we have to have reserves. We have to have adequate salaries to get good employees… There is a cost of doing business.”