Chincoteague cigarette tax proposal draw ire from business owner

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BY CAROL VAUGHN

A Chincoteague business owner asked the town council Monday to reconsider its pending cigarette tax increase, saying the recently passed ordinance would chase customers away.

The 40-cents-per-pack increase, which the council approved in September, will take effect Jan. 1.

Mike Elmquist, of Ridge Road Pit Stop, proposed the town instead impose a 10-cents-per-pack tax, as Accomack County does, and perhaps incrementally increase the tax in the future.

“Our economy is oppressed; our wages are oppressed,” he said of the effect on residents.

Elmquist asked why affected businesses were not informed of the tax proposal beforehand.

Of total sales at his store, 24.8% is for tobacco; 45.6% is for alcohol; and 17% is for prepackaged foods, he said, citing sales since the store opened in April.

“My profit on tobacco is 9%,” he said, adding, “Anybody in business knows you’re talking in that 30% to 40% — 30% is low, you’re going to have your doors closed in six months; 40%, you can hang on.”

Elmquist cited monthly statistics for the store’s tobacco sales, saying the numbers show locals more than tourists are the customers purchasing tobacco products.

With the tax resulting in a higher price, those locals likely will go elsewhere, cutting into the store’s revenue from other purchases they typically make at the same time they purchase tobacco, he said.

“Let’s look at it at the 10,000-foot level, the higher level, and see the broad impact. … This is going to impact me; it’s going to impact the small mom-and-pops,” he said.

He asked the council to “look at this one more time” before imposing the tax in January.

Town Manager Mike Tolbert said tracking of cigarette sales by local vendors since July shows potential tax revenue of $27,023 to the town for the first quarter of fiscal year 2023.

Museum visitation high

The Museum of Chincoteague Island had a banner year for visitation in 2022, according to Executive Director Cindy Faith.

The year 2023 will be the museum’s 30th year working with Roads Scholar, an educational travel organization, which brings groups to Chincoteague.

Groups of around 30 people travel to Chincoteague each week through Roads Scholar. The museum typically hosts 30 to 35 programs per year.

The programs benefit the town’s economy, according to Faith, who said not only does the museum employ five people, but an additional 12 part-time contractors work with the Roads Scholar programs.

Additionally, in the past year the program resulted in 2,956 nights of lodging in local motels, bringing in $865,000, in addition to 5,312 restaurant meals sold, along with revenue for caterers, boat cruises, guest speakers, and more.

The museum’s winter hours are Fridays and Saturdays from 11 a.m. to 5 p.m. Special events include the 100th anniversary celebration for the Chincoteague Causeway and Drawbridge on Saturday and the Christmas Tree Village in December.

Town manager’s update

Legislation to authorize federal funding to replace Chincoteague’s wells did not make it into the National Defense Authorization Act, Tolbert told the council.

The legislation would have provided up to $14 million to relocate wells that supply the town’s water, after per- and polyfuoroalkyl substances (PFAS) were found in the water several years ago. The wells are located on NASA property.

Since then, NASA installed a filtration system for the town’s water supply.

Still, U.S. Sen. Mark Warner and U.S. Rep. Elaine Luria “are hopeful it will be included in a bill currently in conference that is dealing with PFAS,” Tolbert said.

NASA agreed to allow wording of the legislation to be changed to allow a 10-year duration for the project and to include the possibility of desalination as an alternative solution to new wells.

Chincoteague’s town ordinances now can be accessed on the internet. A link is on the town website, chincoteague-va.gov

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