State cigarette tax falling short of estimates

Associated Press

SPRINGFIELD — Illinois’ $1-per-pack cigarette tax increase isn’t bringing in as much money as lawmakers had originally hoped, according to state figures.

The year-old tax that took effect last June raised the state levy on a pack of cigarettes from 98 cents to $1.98. At the time, officials said the money would bring in desperately needed revenue as well as discourage people from smoking.

But The (Springfield) State Journal-Register reported Thursday that the tax is expected to bring in $212 million in extra money for the current fiscal year. That’s about 39 percent short of the $350 million projection, according to the Commission on Government Forecasting and Accountability.

There’s typically a decline in cigarette sales after a tax increase, as some people stock up before the rate hike, while others use it as a chance to stop smoking.

“This tax was discussed and talked about quite some time before it actually went into effect, so individuals went out and purchased in bulk a bunch of cigarettes, so more of those packs were sold under the lowered tax rate,” said Jim Muschinske, the commission’s revenue manager.

Total cigarette tax revenue for the year is expected to reach almost $788 million, up 37 percent from the previous year. The money from the cigarette tax is used for the state’s general fund, Medicaid program and School Infrastructure Fund.

Because of the way the money is allocated, the lower-than-expected revenue means the state’s school construction fund will get about half of the $60 million that was initially projected this year. A long-term care provider fund won’t receive any money from the tax.