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04/21YES : We tax bread; why not cigarettes? Garet Prior column: Why tax ..
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YES: We tax bread; why not cigarettes? Garet Prior column: Why tax bread, but not cigarettes?

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04/21/2018 | 09:32am CEST


At their meeting tonight, I hope you will join me in advocating for the Richmond City Council to approve ORD2018-031.

Supporting the cigarette tax will help our schools. Historic investment in Richmond's school facility maintenance (63 cents per square foot) is far below industry average ($3/sf), and only 8 of 43 schools have been constructed or fully renovated since intentional segregation in school planning (1977-present). An 80-cents-per-pack cigarette tax dedicated to school facility maintenance could generate roughly $5 million per year.

Every city in Virginia, besides Richmond, has a cigarette tax, and a national survey shows that 80 cents per pack would be an average level for taxation, between Hampton's (85 cents) and Norfolk's (75 cents) rates. Increasing cigarette taxes would also be in keeping with a national trend for local governments. The cigarette tax was identified as sustainable, reliable, and locally available by the Davenport Multi-Year Investment Team.

Who smokes in Richmond?

Information from the Richmond Health Department shows that 22 percent of Richmond adults smoke, which is the highest percentage in Virginia and higher than the national average of 15.5 percent. Non-smoking tobacco users account for 24 percent of Richmond adults. According to the American Heart Association, each day across this nation, 2,500 kids try their first cigarette; and in Richmond, 27 percent of high school students and 22 percent of middle school students have tried smoking.

Wouldn't this tax put small convenience stores out of business?

It's not likely, but it may happen. Research from Convenience Store Decisions says that food service accounted for the largest source for profit in 2015 (33.7 percent), with beverages as second (18.8 percent). Although tobacco products constituted 35.9 percent of in-store sales, they accounted for only 16.8 percent of profit.

The same argument was made by restaurant owners about the meals tax, and - similar to buying food - people buy cigarettes where it is easiest. Thin profit margins are a reality in both restaurants and convenience stores. If we can tax a delicious loaf of Sub Rosa bread, why can't we tax cigarettes?

Wouldn't this disrupt the mighty Altria?

Altria is a hometown business, the largest real estate holder in Richmond, and it invests millions in local projects to support education and the arts. Altria opposes the proposed tax more as an emotional affront than a rational approach - and it points to Petersburg's recent tax increase, where collected revenues did not meet the level that was proposed.

It's impossible to address the emotional affront, so let's start with the numbers. This tax in no way would impact Altria's profit model. With the growth of cigarettes internationally and non-burn tobacco nationally, revenues from just one city, Richmond, are a non-factor. For the one consistently touted example of Petersburg, that city's low collection is in keeping with historic collection rates. For example, Newport News saw an initial dip in taxes collected, but it rebounded and in 2015 generated more than $4 million from an 85-cents-per-pack tax.

As to the threat that Altria might leave: That would be a petty move and against all business research on why corporations select to locate. Workforce composition is the central driver for future site selection, and that talented workforce is already here. Altria has too much invested in infrastructure, and business relocation will not be based on a local tax that has no direct impact on the company's economic model.


If you and I agree that Richmond children are deserving of the same education benefits as children attending county schools, then we must forcefully and diligently pursue equity. The lesson from civil rights history is that those who pursue equity must bear the burden. That's why I keep asking: What sacrifice will be required to achieve an equitable outcome for city students?

If students, parents, teachers, and staff are making the daily sacrifice to attend these crumbling facilities, citizens must ask for our share of the burden. We must fight tooth-and-nail for every new dollar, through non-essential service cuts or higher taxes on those of us with economic means. Anything short of that will leave us with the unacceptable status quo, which perpetuates the dreams of our white supremacist forebears.

It's time to fight for every penny by passing a cigarette tax. Let's go!

Garet Prior is founder and chief organizer of Richmond Forward, and may be reacheded at [email protected]

© © Copyright 2018, Richmond Times-Dispatch, Richmond, VA, source Newspapers

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Financials ($)
Sales 2018 19 778 M
EBIT 2018 9 780 M
Net income 2018 7 209 M
Debt 2018 12 148 M
Yield 2018 5,23%
P/E ratio 2018 14,66
P/E ratio 2019 13,39
EV / Sales 2018 6,10x
EV / Sales 2019 5,95x
Capitalization 108 B
Duration : Period :
Altria Group Technical Analysis Chart | MO | US02209S1033 | 4-Traders
Technical analysis trends ALTRIA GROUP
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 15
Average target price 74,3 $
Spread / Average Target 31%
EPS Revisions
Martin J. Barrington Chairman, President & Chief Executive Officer
Howard A. Willard Chief Operating Officer, Director & Executive VP
William F. Gifford Chief Financial Officer & Executive Vice President
George Muñoz Independent Director
Thomas F. Farrell Independent Director
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