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City Council Passes Budget, Cigarette Tax Hike - NBC29 WVIR Charlottesville, VA News, Sports and Weather

City Council Passes Budget, Cigarette Tax Hike

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CHARLOTTESVILLE, Va (WVIR) -

Friday, Charlottesville City Council unanimously passed its budget for the 2015 fiscal year, and one new tax is causing some city businesses to worry.

City Council approved a new cigarette tax increase of 20 cents, bringing the total tax to 55 cents per pack. Now, some city businesses fear they could lose some of their customers to the county.

Mike Brown, owner of Brown’s convenience store on Avon Street in Charlottesville, says his business depends heavily on cigarette sales.

"25, 30 percent of the gross sales. I mean, cigarettes is one of the major players,” said Brown.

The city tax is now over 10 cents higher than the state average of 44 cents. City Councilor Bob Fenwick says the pros outweigh the cons.

"It's known that it causes a lot of health problems, which we as a society pay for later. So if we had to raise money for the city in one area, I felt comfortable doing that,” said Fenwick.

Last year, the city received $850,000 in cigarette tax revenue. With this new raise, they project an increase of $265,000.

City Manager Maurice Jones says that extra money can be directed toward new beneficial projects.

"The one area that I think will really help us and help members of our community is the Workforce Satellite Center, and having someone who is working directly one on one with people who are really struggling with finding jobs,” said Jones.

But for Brown, the change makes him worry about his livelihood.

"You know, if the people choose to go to the county to save money. Twenty cents don't sound like much, but when you tack 20 cents onto what, 35 that was already there, make it a total of 55 cents it could, it adds up quite a bit,” said Brown.

Charlottesville isn't alone in trying this kind of tax increase. Just last year, the town of Vinton - outside of Roanoke - actually had to reverse a cigarette tax increase due to loss of sales to the surrounding county.

It's left to be seen how this increase will affect Charlottesville when it goes into effect July 1.

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