Tags: Economic- Crisis | Illinois | Cigarette | Tax | 1

Illinois Raises Cigarette Tax $1

By Sandy Fitzgerald   |   Wednesday, 30 May 2012 01:03 PM

Illinois smokers will soon be paying $1 more for each pack of cigarettes, after the Democratic-controlled state Senate approved a bill Tuesday raising the tax over Republican objections.

The tax hike on cigarettes passed the state House last week, according to the St. Louis Post-Dispatch, and Democratic Gov. Pat Quinn is expected to sign the bill when it reaches his desk in a few days as part of his plan to help stabilize the Medicaid system.

Once it takes effect, the tax on cigarettes will increase from 98 cents per pack to $1.98. Lawmakers say the increase will raise some $350 million a year and, when matched with federal funds, add another $700 million a year to the state Medicaid fund.

Opponents of the new tax, however, say the amount collected will actually be much lower because the hike in prices will drive smokers across state lines into Indiana, Iowa, Kentucky, and Missouri, where cigarette prices are lower.

“People will move for money,” William J. Fleischli, executive vice president of the Illinois Association of Convenience Stores told senators Tuesday.

Fleischli cited a study predicting a 20 percent drop in cigarette sales in Illinois, which he said would also end up costing jobs for convenience store employees in the state.




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