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To keep cigarettes out of the hands of underage smokers, City Council moved one step closer Tuesday to imposing fees on local tobacco merchants. 

Under the new proposal, retailers of tobacco would pay $283 a year for a city license to sell their products. The fees would be used to cover city expenses for monitoring and enforcing tobacco laws. 

Despite opposition from small business owners, council voted unanimously to pass the first reading of the ordinance. A second vote by the council, which is not yet scheduled, is required before it becomes law. 

Alarming figures about underage smoking in Berkeley were undoubtedly part of council’s decision Tuesday. 

Forty percent of ninth and tenth graders said that within the past 30 days they had smoked a blunt – a cigar with marijuana – according to a spring 2002 school survey. 

However, only between 7 and 10 percent of Berkeley students reported they smoke cigarettes. 

A recent Berkeley police sting targeting local tobacco merchants suggests that Berkeley kids have a far easier time buying tobacco than most of their counterparts across the state. 

The sting, performed this summer, found that 38 percent of the city’s approximately 160 tobacco merchants sold tobacco to underage kids without asking for identification, said Marcia Brown–Machen, director of the city’s tobacco prevention program. 

Statewide, only about 20 percent of tobacco merchants were found to sell to minors, according to a recent report from the state Department of Health Services. 

While the Berkeley plan would tax all cigarette merchants, city officials said a few types of businesses are responsible for the bulk of the problem. 

According to police, 66 percent of small doughnut, ice cream and card stores, 48 percent of delis and 43 percent of gas stations sold tobacco to minors. Chain stores were not found to violate the law. 

Berkeley would not be the first city to license tobacco retailers. According to Brown–Machen, 23 states and 25 California cities have similar programs. 

However, she said Berkeley’s policy would be more onerous because merchants would be asked to pay the entire cost of the program. Most other cities and states use money won from class action tobacco suit settlements to subsidize their programs. 

Deepak Aggarwal, owner of In and Out Deli objected to the city plan as a double tax for tobacco retailers who already have to pay the city’s business license tax. 

“It’s nonsense. Cigarettes are already too expensive. We’ll have to raise our price, people won’t buy cigarettes, and the city will end up with less sales tax revenue,” he said. 

Councilmembers showed little sympathy for the merchant’s concerns. “[Cigarettes] ought to be taxed any way they can. If that hurts [merchants] they better rethink how they make their money,” said Councilmember Betty Olds. 

The city’s plan would raise approximately $45,328 to monitor the program and conduct inspections, according to city staff. The city’s Environmental Health Division would inspect stores and maintain a database of retailers and their violation history.  

A first-time offender would be subject to up to a 30-day suspension of the tobacco license. Penalties would escalate with each offense and upon a fourth citation within five years, the merchant’s license could be revoked. The licensing program will be reviewed by city officials after two years. 

“This can possibly make a significant difference in deducing youth access to tobacco,” Brown–Machen said. 

Berkeley High School students said they are already having a harder time buying tobacco. 

“It used to be easy but now they are cracking down,” said James Reinhardt, a 17-year-old student, who added that it recently took him six hours to find his favorite brand of tobacco because he kept getting denied.