IL Tax Update
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NEW TAX ABUSE PROPOSED FOR IL SMOKERS!
HB0556 – PROPOSED STATE WIDE $.75 / PACK CIGARETTE TAX INCREASE
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Illinois Tobacco Taxes
(January 2007)
Federal: 39 cents
Cook County: $2 (01/06)
Chicago: 68 cents (11/05)
State: 98 cents
Smokers may have to cough up more money for habit
August 2, 2007
By JOHN ROSZKOWSKI Staff Writer
By JOHN ROSZKOWSKI Staff Writer
Local smokers, already reeling over a newly enacted statewide smoking ban scheduled to take effect Jan. 1, could take another hit.
State lawmakers are considering a proposed 90-cent-per-pack tax on cigarettes to fund health care, roads and school construction projects.
The bill, which is being sponsored by State Sen. John Cullerton, D-6th, of Chicago, in the Senate, also would give non-home rule counties like Lake and McHenry the authority to enact up to a $2 per pack local cigarette tax if they so choose. Currently, only Cook County has the authority to enact a cigarette tax and imposes the full $2 per pack.
The proposal passed a Senate committee last week and is awaiting action by the full Senate.
Cullerton said most of the money generated from the proposed cigarette tax would be used for road and school construction projects. A portion of the revenue also would be used to help the state pay off a backlog of unpaid Medicaid bills.
Cullerton calls the proposed legislation “a win-win situation,” saying the tax will not only provide needed revenue to the state but also may discourage youth from starting smoking or encourage more adults to quit. Even if the revenue projections fall somewhat short of expectations because some smokers quit, he said the state would still benefit because of reduced health care costs and fewer smoking-related illnesses.
“If fewer people smoke cigarettes, you win either way,” he said.
However, many smokers are outraged by what they feel is an unfair tax.
“It’s a regressive tax. It’s just awful,” said Lake Bluff resident Garnet Dawn Scheuer, founder and president of Illinois Smokers Rights, and Midwest regional director of Smoker’s Club, Inc.
“I do feel we’re being persecuted, we’re being singled out, we’re being treated as pariahs,” she said. “We have a state ban and now they’re talking about having this tax, too?”
Local tobacco retailers say the proposed cigarette tax could force them out of business.
“It’s outrageous. It’s going to kill retail business, especially small tobacco outlets like ours,” said Gary Shah, owner of Vernon Tobacco in Vernon Hills.
Shah said many smokers will try to avoid paying the tax by going to neighboring states like Indiana and Wisconsin where cigarette taxes are lower. He said they also will buy cheaper brands of cigarettes that are made out of the country or purchase cigarettes over the Internet instead of buying from local retailers.
Ken Neumann, owner of Cigars & More in Libertyville, said he’s not only concerned about the proposed state cigarette tax, but also about a proposed federal excise tax on cigars and other tobacco products.
“It’s a big, big deal. It could drive a lot of people out of business,” he said.
State Rep. JoAnn Osmond, R-61st, of Antioch, said she opposes an increase in the state’s cigarette tax. She believes an increased cigarette tax will cause many Lake County to lose tax revenue because smokers will drive across the state line to Wisconsin to buy cigarettes.
“Once again, we’re sending business out of state,” she said.
Cullerton’s legislation also would the allow the county board of any county in the state to pass an ordinance to impose a cigarette tax of up to $2 per pack for the purpose of public health and safety.
Lake County officials say they have not yet discussed a local cigarette tax, but do support legislation that gives them the option to impose such a tax should they choose.
“We’ve always supported legislation that gives the counties the authority (to impose a cigarette tax) and then it will be up to the board to decide whether it makes sense for our particular county,” said County Administrator Barry Burton. “We’re not currently looking at that as a revenue source. We just think the board should have it as an option.”
Retailers afraid smokers will buy out of state
90-cent-per-pack tax hike could drive down cigarette sales
July 31, 2007
BY KAREN McDONALD, OF THE JOURNAL STAR
PEORIA – If a proposed hike in the cigarette sales tax is approved, area retailers say it will hurt their bottom line by driving smokers out of state in search of lower prices.
An Illinois Senate committee voted last week to raise the state cigarette tax by 90 cents per pack, as opposed to the originally proposed increase of 75 cents a pack. If the bill is passed in both chambers, the total state tax would jump to $1.88 per pack.
“I think they need to find a better way to tax the total population, not just the people who choose to smoke. We all use the roads, not just the smokers,” said Tim Rohlf of East Peoria, who owns three Smoker’s Outlet stores in Peoria. ”
Smokers see the potential hit as a double whammy, given a recently approved statewide indoor smoking ban slated to go into effect Jan. 1.
“(Lawmakers) know consumption is going to go down because they decided to ban all smoking in restaurants and bars and now they’re going to raise the tax to make up for that loss? The biggest crime is they’re overtaxing 25 percent of the population unfairly. I just think it’s all wrong. I think it’s crazy. Enough is enough,” Rohlf said.
The $50 million a year generated by the additional 15-cent tax increase would be used to reduce the state’s backlog of Medicaid bills. The original tax increase could generate about $328 million that could be used to finance bonds for state construction projects, including roads and schools, bill sponsor Sen. John Cullerton, D-Chicago, said using numbers provided by an anti-tobacco group.
Smoker Kim Warner of Peoria said she doesn’t think a price hike will prompt others to kick the habit. “I don’t think it’s necessarily that unfair. You choose to smoke. It’s kind of like gas – what are you going to do?”
Shaher Mizyed, manager of the Peoria Petro station, said he expects cigarette sales to drop 20 percent to 30 percent and to lose customers to those who travel across state lines for cheaper smokes. Cigarette sales comprise about 40 percent of his inside sales, he said.
“Before with the tax increase, everybody was going to Iowa and Indiana to buy cigarettes. It took about two years to reach previous revenues. I imagine the same will happen now, but with that large of an increase, it might take longer to recoup it,” Mizyed said.
Garnet Dawn Scheuer, with Illinois Smokers Rights, called the proposal a “hideous, horrible and discriminatory act.” She said it targets the poorest people without access to buy cigarettes elsewhere and could increase the sale of cigarettes on the black market.
“Every time a tax like this comes in, fewer smokers are buying cigarettes in Illinois. They’re finding alternative methods. The tax base reduces every time,” Scheuer said, adding revenue from cigarette taxes continues to decrease.
A cigarette tax increase of 40 cents was imposed in 2002, bumping the total state tax to the 98 cents it is today.
Illinois now ranks 27th among the 50 states in cigarette taxes, though a 90-cent bump would push Illinois into the top 10.
Peorian Nicole Smith said the price of cigarettes won’t push her to snuff the habit.
“I don’t think price will determine if I quit or not. I’ll quit if I want to, not because of the price,” Smith said.
Karen McDonald can be reached at 686-3285 or kmcdonald@pjstar.com.
Karen McDonald can be reached at 686-3285 or kmcdonald@pjstar.com.
Lawmakers should butt out of plan to hike smoking tax
July 29, 2007
The issue: Proposal in Legislature would increase state tax on cigarettes from 98 cents a pack to $1.73 a pack.
The issue: Proposal in Legislature would increase state tax on cigarettes from 98 cents a pack to $1.73 a pack.
We say: In the wake of banning smoking in public places in Illinois and with fewer people smoking than ever before, a tax increase would not provide a reliable source of revenue.
Where there’s smoke, there’s a tax. So it goes in many places, including Illinois. Cigarette smokers in our state already pay 98 cents a pack in state tax. Now a bill under consideration in the state Senate would increase that by 75 cents to $1.73 a pack.
That cough you hear isn’t from inhaling too much smoke. It’s us gagging at the absurdity of this legislation.
Yes, we are aware of the evils of smoking. We hope anyone who lights up is aware of them as well. But this isn’t a lecture on cigarettes and your health. It’s a lecture on lawmakers proposing a dubious idea to raise revenue.
Sponsors of the legislation say the state can generate $328 million in additional revenue by increasing the tax. The money, the sponsors believe, could be used to pay off bonds issued to finance capital projects such as school and road construction.
Hey, we’re all for better schools and roads, but in our opinion, this is not a reliable way to raise revenue for such projects.
Anyone who’s read the papers or watched TV in the past few days knows that Gov. Rod Blagojevich just signed into law legislation that bans smoking in most public places in Illinois. The law is said to be the most stringent of its kind in the country.
So here we have the state on one hand restricting smoking to the point where there no doubt will be fewer cigarettes smoked and on the other hand believing it can cash in on smoking.
In our opinion, not only is the indoors smoking ban going to deter smoking, but so would the increase in the tax. A two-packs-a-day puffer will be paying an additional $10.50 each week. Those who need yet another reason to quit might find one in this tax increase.
A Gallup Poll this week provided more evidence that an increase in cigarette taxes might not be a very reliable source of income. The poll found that 21 percent of Americans smoke. That’s the lowest level in the 63 years Gallup has been monitoring smoking habits (the high was 45 percent in the 1950s). What’s more, those who do smoke are smoking less, and fewer people are starting to smoke when they are younger than 16, the poll found.
A combination of Illinois’ legislative action and society’s growing awareness of the dangers of smoking lead us to believe that relying on an increased cigarette tax as a fixed revenue source would not be a sound move by the Legislature.
Yes, lots of people still smoke and will continue to do so. But rather than try to soak these individuals in hopes of grabbing some fast cash, the great minds in Springfield need to come up with revenue sources that are more reliable and fair to all. Unfortunately, a look at the ongoing budget mess doesn’t leave one optimistic that any equitable revenue solution will ever be found. That’s where leadership and compromise — components absent during this legislative session — could help. In the meantime, though, the increased cigarette tax should be snuffed out.
Smokers: Only buying habits change
July 26, 2007
By Georgia Evdoxiadis Garvey, gevdoxiadis@dailyherald.com
By Georgia Evdoxiadis Garvey, gevdoxiadis@dailyherald.com
As word of a proposed increase in the state’s cigarette tax filtered into Lake County Wednesday, angry smokers and business owners denounced the Illinois Senate’s plan — but noted the increase likely won’t stop many smokers.
“I’m speechless about it,” said Garnet Dawn Scheuer, founder and president of Illinois Smoker’s Rights and the Midwest regional director of Smoker’s Club Inc. “It’s the ’60s all over again, except we’re not black, we’re smokers.”
Business owners said they were enraged by what they saw as an effort to disable the tobacco industry.
“It will put the whole tobacco industry out of business,” said Paul Solsberger, the owner of Aromas Cigars in Gurnee and a pipe and cigar smoker himself.
He said the state could be destroying an industry that brings in huge amounts of tax money.
“It’s like cutting a nose off to spite a face,” Solsberger said. “I do not like the fact that the government is singling out some people.”
And lawmakers’ logic that higher taxes would cause more smokers to quit doesn’t ring true for Shahid Ladiwala, a manager at Grayslake Tobacco.
“People are avoiding buying cigarettes (in Illinois),” he said, noting smokers can easily cross state lines and pay less for their cigarettes. “A lot of people are ordering from online.”
And many smokers agreed that the tax may change their buying but not their smoking habits.
Patrick McNichols, a smoker who manages a White Hen Pantry in Arlington Heights, noted a carton of Marlboros at the store costs $62, while the same carton can be purchased at a Lake Zurich White Hen Pantry for $36 a carton.
McNichols, of Rolling Meadows, said he makes the trip north to Lake County to buy his cigarettes.
“It’s just more (nonsense) from those guys in Springfield,” McNichols said.
Candido Hernandez, of Elgin, agreed.
“To tax just a few people for something that will benefit many people, that’s just not right,” Hernandez said. “Politicians know that if they come up with an idea where everybody has to pay more, they’re not going to get votes.”
But not everyone was angry. For one, Maggie Ng, owner of By Design in downtown Glen Ellyn thinks the new tax increase is great.
“I like smoking, but I’m all for being healthy, too,” she said. “Anything that helps you think of quitting is good.”
Fasih Ahmad, owner of Lisle Tobacco Discount, said he understands the reasoning behind government’s efforts related to smoking and smoking bans.
“Whatever they’re doing, they’re doing for our benefit,” he said.
More: State committee approves 75-cent cigarette tax increase
Well, first thing, I think we have a bit of a typo in the news sub-headline. I think it was supposed to read “Senate Democrats Hope $ .75 Cent Increase Will Help Resolve Budget Battle”.
Secondly, this tax increase bill has taken only 24 hours to show it’s true colors and why the big rush to drop another bomb on smokers in IL. Our Assembly wants to be recessed to go out and play, and will do almost anything to get this budget crunch session over with. Notice how the “state health care” purpose has simply disappeared to make way for:
“We can use that money to fix our roads and bridges in Illinois,” said Sen. John Cullerton (D-Chicago). “We can also find another benefit, because there’s health care savings.”
How much BS do they think tax payers will swallow? Nothing like a 180 degree flip-flop Sen. Cullerton! Aren’t IL tollway fees, our many other taxes and DMV/licensing fees supposed to pay for repairs of our roads and bridges?
Garnet Dawn
The Smoker’s Club, Inc. – Midwest Regional Director
The United Pro Choice Smokers Rights Newsletter – http://www.smokersclubinc.com
Illinois Smokers Rights – http://www.illinoissmokersrights.com/
mailto:garnetdawn@comcast.net – Respect Freedom of Choice!
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State Senators Fight For New Cigarette Tax Hike
Senate Democrats Hope 75 Percent Increase Will Help Resolve Budget Battle
The Smoker’s Club, Inc. – Midwest Regional Director
The United Pro Choice Smokers Rights Newsletter – http://www.smokersclubinc.com
Illinois Smokers Rights – http://www.illinoissmokersrights.com/
mailto:garnetdawn@comcast.net – Respect Freedom of Choice!
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State Senators Fight For New Cigarette Tax Hike
Senate Democrats Hope 75 Percent Increase Will Help Resolve Budget Battle
Jul 26, 2007
(CBS) SPRINGFIELD, Ill. Just after a statewide indoor smoking ban was signed into law, state lawmakers are hoping a hike in the cigarette tax will help bring an end to the budget deadlock, which has reached a record 56 days.
As CBS 2’s Mai Martinez reports, the Democratic majority in the state Revenue Committee approved a state tax hike on cigarettes in a 6-3 vote. If the bill becomes law, the state tax on a pack of cigarettes would jump by 75 cents, making the total state tax on a pack of cigarettes $1.73.
Many cities and counties – including Chicago and Cook County – also levy taxes on tobacco products.
Supporters say the state cigarette tax increase would generate about $328 million a year, which could be spent on roads, schools and other construction needs. They also say a tax increase might also discourage people from smoking.
“We can use that money to fix our roads and bridges in Illinois,” said Sen. John Cullerton (D-Chicago). “We can also find another benefit, because there’s health care savings.”
But opponents say another tax increase on cigarettes ultimately could reduce state revenues.
“There’s already a diminishing return, and at some point it’s going to go negative,” said Sen. Chris Lauzen (R-Aurora). “People will stop buying cigarettes.”
Senate Democrats hope by tying the money raised to funding for construction of schools and other capital projects Republicans are seeking, they will be able to draw Republican support for the tax hike.
As it stands Thursday morning, the bill goes before the full Senate on a party line vote.
Also Wednesday, the Senate public health committee voted 7-4 to send to the Senate floor a scaled-back version of the Blagojevich health care plan, despite some strong Republican objections. No fan of the governor’s health care plan, House Speaker Mike Madigan predicted trouble for it in the Senate.
The state’s temporary spending authority expires July 31. Then come the payless paydays for some state workers and likely layoffs for other public employees, including teachers and transit workers.
Earlier this week, Blagojevich signed into law a ban on smoking in all public buildings, including restaurants and bars. The law goes into effect on Jan. 1, 2008, replacing a patchwork of local ordinances.
Smoking will be allowed in private homes and cars, but that’s about it for those looking to light up indoors. Smoking will be allowed outside, with some restrictions. There are two exceptions for businesses: retail tobacco shops and a limited number of hotel rooms.
State cigarette tax may increase
Senate proposal would raise price of pack by 75 cents
July 26, 2007 By DOUG FINKE, OF GATEHOUSE NEWS SERVICE
SPRINGFIELD – Turning to an old standby, Democrats in the Illinois Senate on Wednesday floated a plan to nearly double the state’s cigarette tax and use the money to pay for construction projects.
Senate proposal would raise price of pack by 75 cents
July 26, 2007 By DOUG FINKE, OF GATEHOUSE NEWS SERVICE
SPRINGFIELD – Turning to an old standby, Democrats in the Illinois Senate on Wednesday floated a plan to nearly double the state’s cigarette tax and use the money to pay for construction projects.
With every new atrocity our elected officials introduce to persecute smokers, they awaken more of our non-smoking or on-the-fence residents and businesses to the obscene way smokers are being abused and financially mugged. I already had a phone call from one of the papers that has treated our pro choice position fairly in the past. I hope they continue to remain unbiased this time. Reporters have been calling me, but their editors must be over-ruling our positions.
Below is the most balanced account of what happened today (more accurately described as yet another Kangaroo Court scheme) in the IL Assembly that I could find. Our IL decision makers have already made up their minds, are going just through the motions and ramrodding this bill through…..
Yes, it’s back to the Senate again, now….I’m sure that won’t be a problem for our legislators. They should be able to pass this latest scheme into law by the week-end, at the rate they’ve been going. Voters have no say any more in this state. I couldn’t even make myself read a few of the other biased news accounts about this tax in the Trib, etc.
This new proposed additional excise tax is total insanity! Smoking is becoming an excellent platform for us to direct our collective wills to retain personal choice. If any more of our current elected officials could read, maybe they’d remember that smoking rates actually went up in Germany, after WWII, when Hitler had also generally banned smoking. Welcome to another era of Al Capone and smoke easies! Maybe Chicago can earn back some national respect again that way.
I for one, will never buy retail cigarettes in Illinois! Time to start practicing with my cigarette stuffing machine again too……just in case the Feds are dumb enough to raise this entire country’s excise tax too. These taxes seem to me to be the acts of desperate men, who realize their era is coming to an end. It’s nothing but runaway greed.
I think/feel/believe that our entire country (especially our government) is living in debt and, federally maintaining a stable stock market economy since the Crash of ’29 isn’t going to be able to stabilize our national, state and local economies much longer…..
“When is enough, enough for cigarette smoking?” said Bill Fleischli, executive vice president of the Illinois Association of Convenience Stores.
Garnet Dawn
The Smoker’s Club, Inc. – Midwest Regional Director
The United Pro Choice Smokers Rights Newsletter – http://www.smokersclubinc.com
Illinois Smokers Rights – http://www.illinoissmokersrights.com/
mailto:garnetdawn@comcast.net – Respect Freedom of Choice!
Thomas Jefferson wrote in 1777, “To compel a man to furnish contributions of money for the propagation of opinions he disbelieves, is sinful and tyrannical.”
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Cigarette taxes may take another jump
The Smoker’s Club, Inc. – Midwest Regional Director
The United Pro Choice Smokers Rights Newsletter – http://www.smokersclubinc.com
Illinois Smokers Rights – http://www.illinoissmokersrights.com/
mailto:garnetdawn@comcast.net – Respect Freedom of Choice!
Thomas Jefferson wrote in 1777, “To compel a man to furnish contributions of money for the propagation of opinions he disbelieves, is sinful and tyrannical.”
———————-
Cigarette taxes may take another jump
By John Patterson, Daily Herald State Government Editor
July 25, 2007
July 25, 2007
SPRINGFIELD – Cigarette taxes would increase another 75 cents per pack under a plan an Illinois Senate committee approved today in an effort to finance billions worth of state construction.
On the strength of Democratic votes, the cigarette tax was approved and sent to the full Senate, where a vote could occur later today.
If approved, the added tax could propel the cost of a pack of cigarettes to more than $6 in the collar counties, past $7 in the Cook County suburbs where there are higher taxes, and beyond $8 in Chicago, where the total tax burden on a single pack would be $4.80.
Supporters said the nearly $328 million the new tax would bring in would finance nearly $4 billion in school, road and other construction statewide. Plus, the higher costs would discourage tens of thousands of adults and youth from smoking, especially when combined with a pending statewide smoking ban in restaurants and bars.
“You don’t have to smoke if you don’t want to,” said state Sen. Terry Link, a Waukegan Democrat. “But if you’re going to smoke, pay the piper.”
Republicans said they didn’t trust Gov. Rod Blagojevich’s administration to fairly divvy up where those billions would be spent. And business groups questioned the ever-increasing litany of sin taxes.
“When is enough, enough for cigarette smoking?” said Bill Fleischli, executive vice president of the Illinois Association of Convenience Stores.
Cigarette tax hike for health care plan?
07/17/2007
By Kevin McDermott, POST-DISPATCH SPRINGFIELD BUREAU
By Kevin McDermott, POST-DISPATCH SPRINGFIELD BUREAU
The idea • Increase would add $1 to existing tax, to almost $2 a pack, raising $400 million to $450 million.
The impact • The hike would make the Illinois tax among the highest in U.S. Smokers say it could lead them to quit.
SPRINGFIELD, Ill. — State leaders are quietly exploring the possibility of doubling Illinois’ cigarette tax to almost $2 a pack in an effort to fund Gov. Rod Blagojevich’s universal health care plan.
The idea, in its very early stages, is one of many competing proposals being discussed in private meetings in Springfield, as the state’s political leaders struggle to cobble together a new budget. Advertisement
The proposal would add $1 to the existing 98-cent cigarette tax, making it among the highest in the nation. That would contrast sharply with Missouri’s lowest-in-the-nation tax of 17 cents per pack.
“It would certainly send people over to Missouri to buy cigarettes,” predicted St. Louis smokers’ rights advocate Bill Hannegan.
Blagojevich and legislative leaders have been locked for weeks in a political battle over approval of a state budget for the fiscal year that started July 1. Among the sticking points is Blagojevich’s goal of a major new state-backed program that would provide near-universal health insurance coverage to Illinois residents — a plan that other leaders say the state can’t afford.
To pay for the plan, the administration is suggesting a 3 percent tax on businesses that don’t provide health insurance to their employees. But that and other business-tax proposals have hit stiff resistance in the Legislature, and the administration has continued looking around for other funding sources that might be more palatable to lawmakers.
The Blagojevich administration on Monday was coy about the cigarette tax increase, confirming it has been discussed but declining to say much more.
Blagojevich spokeswoman Rebecca Rausch said the tax hike is “among the various ideas that have been raised” in closed-door talks between the administration and lawmakers.
“I’m not saying it was our idea, and I don’t know that we’re ready to take a position on it,” she said.
But others close to the negotiations say the administration has specifically brought it up recently, including a mention from Blagojevich himself while talking with lawmakers in his office late last week.
“He said something to that effect while he was rattling off a few things” that could raise money, said state Rep. Gary Hannig, D-Litchfield, a key budget negotiator for the House Democratic majority.
Hannig and others say they’ve heard estimates that the tax increase could raise an additional $400 million to $450 million annually. The state’s current 98-cent tax raises almost $640 million a year.
But some say the governor’s support of a smoking ban runs counter to his proposal to fund health care through cigarette taxes.
“They’re destroying their own tax base,” said Illinois smokers’ rights advocate Garnet Dawn Scheuer. “Every time there’s a tax like this, it reduces sales for local retailers and drives people across the (state) borders” for cigarettes.
To anti-smoking advocates, one of the benefits of smoking bans is they could reduce the smoking rate.
Cynthia Jones of East St. Louis, asked about the tax increase as she smoked a cigarette outside the St. Clair County Courthouse on Monday, said it could lead her to quit.
But in border areas like the Metro East, smokers do have another option.
“When you raise these taxes, some people are going to go across state lines to buy their cigarettes,” said Hannig, who, like others interviewed Monday, appeared lukewarm toward the idea because of concerns that it wouldn’t bring in as much revenue as expected.
kmcdermott@post-dispatch.com | 217-782-4912
kmcdermott@post-dispatch.com | 217-782-4912
——————
—– Original Message —–
From: Jeff “work” Trigg
To: Kevin McDermott
Sent: Tuesday, July 17, 2007 6:26 PM
Subject: Re: Cigarette tax hike for health care plan?
—– Original Message —–
From: Jeff “work” Trigg
To: Kevin McDermott
Sent: Tuesday, July 17, 2007 6:26 PM
Subject: Re: Cigarette tax hike for health care plan?
Mr. Kevin McDermott,
Informative article, thank you, I enjoy your reporting on the shenangians in Illinois. Just an FYI for the future, one piece of info that could have been useful is that the state of Illinois’ revenue from cigarette taxes was $760 million in 2004, before Cook/Chicago jacked their tax rate up. In 2006, state revenues were down to $640. If anyone in this state believes raising the cigarette tax by $1 per pack will bring in an additional $400-$450 million, they are either lying or stupid. Maybe $200 million, maybe, if they are really, really lucky and surrounding states increase their taxes and the black market doesn’t expand fast enough. Cook/Chicago’s cigarette tax increase cost every single person in Illinois an additional $10 per year in taxes to make up for the $120 million in lost state revenue. It is a myth that non-smokers don’t pay cigarette taxes as proven by the state of Illinois revenue decline in cigarette taxes.
Then there is the proposal in DC to increase the federal cigarette tax from $.31 to $1. If that happens AND Illinois increases ours? Not only will the state of Illinois not meet the $450 million expectation, but all the taxing authorities in Illinois that collect cigarette tax will lose tax revenue also. The politicians will still want to spend the amount they are projecting or the amount they used to get, but that money won’t be there and they will go to the non-smokers to make up for it. The state already had to do that after 2004.
And some more trivia for you if you do another article on this topic. Chicago has the highest combined cigarette tax in the United States. (City, County, State, and Federal) And they want to add another $1 to it? Second highest cigarette tax in the US is Evanston, IL. Cicero, IL is 3rd. New York City is 4th, and occupying 5th place through ???? is every other city in Cook County.
Thanks,
Jeff Trigg
Executive Director – National Taxpayer United of Illinois
formerly of Peoria and Decatur and soon to be formerly of Chicago and the state of Illinois. This state is becoming more like Mississippi every day.
Proud smoker with Parkinson’s Disease, which nicotine is effective at slowing the progression of the disease as it stimulates the production of dopamine. They are taxing my medicine outrageously too high.
Informative article, thank you, I enjoy your reporting on the shenangians in Illinois. Just an FYI for the future, one piece of info that could have been useful is that the state of Illinois’ revenue from cigarette taxes was $760 million in 2004, before Cook/Chicago jacked their tax rate up. In 2006, state revenues were down to $640. If anyone in this state believes raising the cigarette tax by $1 per pack will bring in an additional $400-$450 million, they are either lying or stupid. Maybe $200 million, maybe, if they are really, really lucky and surrounding states increase their taxes and the black market doesn’t expand fast enough. Cook/Chicago’s cigarette tax increase cost every single person in Illinois an additional $10 per year in taxes to make up for the $120 million in lost state revenue. It is a myth that non-smokers don’t pay cigarette taxes as proven by the state of Illinois revenue decline in cigarette taxes.
Then there is the proposal in DC to increase the federal cigarette tax from $.31 to $1. If that happens AND Illinois increases ours? Not only will the state of Illinois not meet the $450 million expectation, but all the taxing authorities in Illinois that collect cigarette tax will lose tax revenue also. The politicians will still want to spend the amount they are projecting or the amount they used to get, but that money won’t be there and they will go to the non-smokers to make up for it. The state already had to do that after 2004.
And some more trivia for you if you do another article on this topic. Chicago has the highest combined cigarette tax in the United States. (City, County, State, and Federal) And they want to add another $1 to it? Second highest cigarette tax in the US is Evanston, IL. Cicero, IL is 3rd. New York City is 4th, and occupying 5th place through ???? is every other city in Cook County.
Thanks,
Jeff Trigg
Executive Director – National Taxpayer United of Illinois
formerly of Peoria and Decatur and soon to be formerly of Chicago and the state of Illinois. This state is becoming more like Mississippi every day.
Proud smoker with Parkinson’s Disease, which nicotine is effective at slowing the progression of the disease as it stimulates the production of dopamine. They are taxing my medicine outrageously too high.
Cook County Doubles Its Cigarette Tax
Author: John W. Skorburg
Published: The Heartland Institute 04/01/2006
The Cook County, Illinois tax on cigarettes has doubled to $2 a pack, giving the city of Chicago the highest cigarette tax in the nation. County, city, state, and federal taxes on cigarettes now total $4.05 a pack in Chicago.
The Cook County Board voted 10-7 on February 9 to double the county’s cigarette tax, effective March 1. The county projects the cigarette tax hike will generate $72 million annually in additional revenues for the county, but some politicians and local businesses warn of adverse economic consequences.
Strong Opposition Arose
The county board’s five Republicans were joined by Democrats Forrest Claypool and Mike Quigley in voting against the proposal. The 10 yes votes were all cast by Democrats.
Claypool, who is challenging current Board President John Stroger (D) in the March 21 primary, said, “A tax [hike] like this, $1 a pack, is so radical and so sudden that it literally destroys store owners’ life savings and throws out of work the people they employ.”
“Businesses are dying the death of a thousand taxes,” said Republican County Commissioner Tony Peraica. He called the cigarette tax hike “a tax that’s going to kill businesses in this county.”
Quigley called the measure fiscally irresponsible.
“This is a budget that doesn’t lay a solid foundation for the county’s fiscal future,” Quigley said. “It does two things: It readjusts revenue estimates, and it relies on a single product [tobacco],” he said. “I guess this forever will be known as the smoke-and-mirrors budget.”
Stroger defended the budget and the tax hike. In a statement to commissioners while presenting his budget, Stroger said, “In order to continue to fulfill our mission, I am proposing a $1 increase on the cigarette tax to raise the $75 million necessary to fill the gap for 2006.”
Business Groups Slam Increase
Bill Fleischli, executive vice president of the Illinois Association of Convenience Stores, said businesses in Cook County have a lot to lose with the tax increase.
“Cigarettes are a legal product. It’s probably our number 1 seller, if you don’t have gas at your facility,” Fleischli said. “And the consumer is awfully powerful. He’s awfully intelligent. He will move for price. And every time you raise a tax like this, they will move, and it’s business you can never get back. I think you will see small convenience stores hurt so bad they will not survive this.”
“The tax increase in Cook County will result in even more sales being made outside of the county,” said David F. Vite, president of the Illinois Retail Merchants Association. “People don’t travel outside the county or state just to buy tobacco. Once there, they buy gas, groceries, beverages, and other goods. The loss of sales tax revenue is not just in loss of tobacco sales.”
Vite continued, “Cook County has created a shopping cart full of reasons to shop elsewhere. Additionally, it will fuel the growing illegal market. The result will be a deficit cycle for the county in these revenue line-items.”
Indiana Business May Boom
The vote to raise Cook County’s cigarette tax is just fine with Anjum Zia, owner of Cigarette Express in nearby Hammond, Indiana.
“I would say it could increase my sales by as much as 25 percent,” Zia said in a Tobacco.com news article posted on February 27.
Cigarette sellers in neighboring counties within Illinois also may benefit. In a February 10 article, Chicago Sun-Times reporter Abdon Pallasch pointed out that a pack of Marlboro Lights that would go from $6.59 to $7.59 at a Chicago Walgreens sells for $4.45 at a White Hen Pantry in nearby Elmhurst, across the county line in DuPage County.
Fiscal Discipline Wanted
“The Civic Federation opposed the FY2006 budget of $3.07 billion because it is a short-term fix, not a long-term solution to the ongoing fiscal problems of Cook County,” said Laurence Msall, president of the Civic Federation. “A $1 per pack cigarette tax hike may well plug this year’s deficit. But we are fairly certain that unless there is dramatic change, next year’s budget will require yet another tax increase or perhaps another new tax.”
Msall continued, “We do not oppose reasonable revenue enhancements. However, they should never be the first consideration and they always must be coupled with a solid plan to impose fiscal discipline in the long term. Citizens who are asked to pay for county services expect no less. Unfortunately, we are not convinced Cook County has done all it can to manage its operations more efficiently.”
John W. Skorburg (skorburg@heartland.org) is a visiting lecturer in economics at the University of Illinois at Chicago and associate editor of Budget & Tax News.
Stroger proposes $1 tax hike on cigarettes
December 20, 2005
BY GARY WISBY Staff Reporter
December 20, 2005
BY GARY WISBY Staff Reporter
Cook County Board President John Stroger sought to balance the county’s proposed $3.1 billion budget on Monday by dropping the hammer on smokers for the third time in two weeks — urging a doubling of the $1 county tax on a pack of cigarettes.
If approved by the County Board, Chicagoans would pay $4.05 in taxes per pack. Smokers in New York City cough up $3.39.
The proposed tax increase is the third recent slap at smokers. On Dec. 7, the City Council imposed a smoking ban on virtually all of indoor Chicago, exempting private homes, clubs and lodges, retail tobacco stores and 25 percent of hotel rooms. The ban takes effect Jan. 1, but taverns and restaurant bars have until July 1, 2008, to comply.
WHERE IT GOES
Cook County board president John Stroger wants to raise the county cigarette tax by $1, which would bring taxes on a single pack in Chicago to $4.05:
*68 cents for the city
*$1 for Cook County; Stroger would increase that to $2
*98 cents for the State of Illinois
*39 cents for the federal govt.
Cook County board president John Stroger wants to raise the county cigarette tax by $1, which would bring taxes on a single pack in Chicago to $4.05:
*68 cents for the city
*$1 for Cook County; Stroger would increase that to $2
*98 cents for the State of Illinois
*39 cents for the federal govt.
And last Wednesday, aldermen raised the city’s per-pack tax by 20 cents, to 68 cents. That’s on top of 98 cents for the state and 39 cents for the federal government.
17 cents not so long ago
The county tax was a mere 17 cents until last year, when it shot up another 83 cents. But it raised so much money — $130 million compared with $69 million expected — that Stroger decided to go for another increase.
A new $2 tax would raise an additional $50 million, he said. That would enable the county to avoid a property tax hike for the seventh year in a row.
Democratic Commissioner Mike Quigley, who later in the day exited his planned challenge to Stroger and threw his support behind Commissioner Forrest Claypool, said the cigarette tax gambit eventually must reach the point of diminishing returns. Stroger, he said, “better hope [residents] chain-smoke at home.”
Taxes don’t need to be raised at all if the board can find the will to “streamline and restructure” county government, Quigley maintained.
He noted that he introduced a county smoking ban, mirroring the city’s, two weeks ago and fully anticipates it will pass.
Claypool said he and other commissioners have urged Stroger to earmark new cigarette tax revenue for health care, but to no avail.
Cuts in the federal government’s Medicaid program were the biggest hurdle to clear in crafting a balanced budget, Stroger said. His talks by phone Friday with U.S. senators and congressmen from Illinois assured him $20 million more will be forthcoming from the feds, he said.
Waste at hospital, Stroger says
The board president pledged to lean on the county health bureau, which runs Stroger Hospital, to trim costs. He departed from his 40-minute budget proposal to describe a recent visit to the facility.
“It makes me angry to see all the trash out front and toilet paper hanging from the walls,” he said. “I asked who was in charge of the janitors, and a fella came down wearing a three-piece suit. Even the chief janitor shouldn’t be in a three-piece suit. We’re going to correct that.”
Under Stroger’s tenure, his finance team has managed to slash the property tax rate by 40 percent since he took office in 1994. That has saved taxpayers $1.8 billion, he said.
This year, Stroger said his team managed to overcome a deficit that loomed as high as $307 million in September. Reductions included eliminating jobs, cutting salaries and further trimming payments for overtime, travel, seminars, training and supplies.
The county hopes for further economies in ongoing negotiations with unions, largely by winning higher worker contributions for health care, Stroger said.
Public safety is the budget’s largest single component, totaling more than $1 billion. That would fund operations of the sheriff’s department, state’s attorney’s and public defender’s offices, chief judge, clerk of the court and juvenile detention center.
3.8 million prescriptions in ’05
The county health bureau demands another big chunk of the budget, $830 million to run the Stroger, Provident and Oak Forest hospitals, public health department and 28 clinics. The county filled 3.8 million prescriptions this year, far more than the 2.2 million filled in 2003, Stroger said.
Republican Commissioner Tony Peraica, who filed papers Monday to run against Stroger, said, “The poor people of Cook County are being used by President Stroger in a cynical way. If we continue four more years with the Stroger administration, Cook County is going to be bankrupt.”
The deadline for passing the budget is Feb. 28. Public hearings are set for Jan. 5 at the Markham Courthouse, Jan. 9 at the Skokie Courthouse and Jan. 12 at the Maywood Courthouse, all at 6:30 p.m., and for Jan. 6 at the County Courthouse, at 10 a.m.
The budget proposal and Stroger’s budget speech can be seen online at http://www.cookcountygov.com/.
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