Cigarette tax increase stalls in Illinois House

Kris Anne Bonifacio

Cigarette smokers across the state can rest easy because they won’t be paying an extra dollar for a cigarette pack – at least for now.

A bill proposing a $1.01-per-pack tax hike on cigarettes was shot down in the Illinois House of Representatives on Tuesday. The tax hike was part of a bigger tax proposal, which also included a 66 percent income tax increase intended to pay for the $13 billion deficit the state is currently facing.

Lawmakers hoped to move the measure forward before new members of the General Assembly were sworn in Wednesday, but while the income tax increase passed, the cigarette tax measure did not, falling just nine votes short of the 60 votes needed. The bill, however, is still alive and has been placed on calendar for later consideration by the new set of legislators.

Currently, Illinois puts a $0.98 excise tax on each pack of cigarettes. But while the state ranks 32nd in the nation in cigarette tax rates, Chicago and Evanston residents pay almost four times that amount after local and county taxes. Everywhere in Cook County, an additional $2.00 is added to the state tax. In Chicago and Evanston, the local tax adds another $0.68 or $0.50, respectively.

Had the measure been passed, some packs of cigarettes would have cost more than $10 in Chicago and Evanston.

For lawmakers supporting the bill, they had another number in mind: the $375 million that the tax hike would have generated for the state.

State Sen. Jeff Schoenberg, D-9, whose district includes Evanston, was one of the sponsors for the bill in the Senate. He said the bill had been in the General Assembly since early 2009, but back then, the increase would be broken up into two installments – a $0.50 increase one year and another $0.50 the next – and the money would have gone toward health care.

“This time, it would just be done over one year, and the money would instead be earmarked for restoring some of the federal education stimulus funding that disappeared when that law expired,” Schoenberg said.

Prior to the House vote on Tuesday night, he said he was “cautiously optimistic” about the bill, which passed through committee on a 7-5 vote Monday afternoon.

“There’s overwhelming support statewide, especially in my North Shore senate district, for the tax increase,” he said.

Business owners, on the other hand, stood strongly on the opposing side. Bill Fleischli, executive vice president for the Illinois Association of Convenience Stores, said instead of making money for the state, a tax increase would actually lose money for Illinois.

“There’s this town, Quincy, that lies on the western border of the state,” he said. “It has a population of close to 40,000, and they have 33 locations that sell cigarettes. Across the border, this town in Missouri has 8,000 people, and they have 8 locations that sell cigarettes. In that town in Missouri, they sell close to 52,000 cartons a month, while Quincy sells 12,000. All that business in that little town of Missouri, that’s from Illinois residents who want cheaper cigarettes. That’s 52,000 cartons times 10 packs in each, times $0.98 – half a million dollars a month that we’re losing in tax revenue.”

Evanston resident Mahjabeen Hakeem, who owns Evanston Pipe and Tobacco, 923 Davis St., said business has already been slow the past few months and the thought of having to increase prices even more would be devastating.

“We used to have a lot of customers, but now, they are not coming,” she said. “If we have to raise the price, then they definitely won’t buy. It’s already so high, and across the border, in Indiana, it’s much cheaper, so why would they buy it here if they can get it for less by going a little bit further?”

Early last year, the Illinois Coalition Against Tobacco released a poll that indicated almost 75 percent of Illinois voters support a cigarette tax increase. Schoenberg points to the indirect consequence of the tax hike – the decreased burden on taxpayers when it comes to health care costs.

“The opponents (of the tax hike) all too often neglect to mention the sizeable economic impact of taxpayers funding health care treatment for those who suffer from tobacco-related illnesses,” Schoenberg said. “The bill would serve to reduce tobacco use, especially among younger smokers.”

Fleischli said he is not convinced that a tax hike would have any tremendous impact on health issues.

“People aren’t going to stop smoking when we raise the tax,” he said. “They’re just going to buy it elsewhere – buy it on the Internet or buy it across the line.”

For some smokers, the price isn’t a good enough reason to quit the habit. Northwestern student Marie Giacometti said she and her friends don’t stop smoking simply because of price increases.

“I get pissed off that I have to pay more, but I continue to buy cigarettes anyway,” the Weinberg sophomore said.

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