House approves $1 cigarette tax hike

Now proposal goes to Senate for approval

  • The Illinois House voted to raise cigarette taxes by $1 a pack to help pay for health care for the poor.

    The Illinois House voted to raise cigarette taxes by $1 a pack to help pay for health care for the poor.

 
and Marni Pyke
rvoyles@dailyherald.com
mpyke@dailyherald.com
 
Updated 5/25/2012 8:29 PM

SPRINGFIELD -- The Illinois House approved a proposal Friday to raise the price of cigarettes by $1 a pack in an effort to grab money from smokers to pay for the state's rising costs for health care for the poor.

The proposal, approved 60-52, is part of a package meant to fill a $2.7 billion Medicaid funding shortfall. The proposal also includes sweeping tax changes for hospitals that aim to lure millions of dollars from the federal government and specify how hospitals should qualify for property and sales tax breaks.

                                                                                                                                                                                                                       
 

"It's a win for hospitals, it's a win for health care for the poor, and it is a win for the health of the people of Illinois," said Rep. Barbara Flynn Currie, a Chicago Democrat and sponsor of the plan.

Suburban smokers and retailers aren't likely to feel the same way.

"It would be very bad if they raised the tax," said Suresh Patel, owner of Smoke for Less in Buffalo Grove. "Business would go down, and customers won't be happy."

The tax plan now moves to the Senate, where it could be debated as early as Monday.

It would also increase taxes on most other tobacco products, such as cigars.

The hospital tax provisions were a key to get some lawmakers' support who would have otherwise opposed any tax increase. State Rep. Chris Nybo, an Elmhurst Republican, opposed the cigarette tax increase, but voted for the proposal because of the tax breaks for hospitals.

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"We were all called down here to make tough decisions, and this is one of them," Nybo said.

Gov. Pat Quinn praised lawmakers for Friday's decision, saying he hopes higher costs will lead people to quit smoking, perhaps saving the state health care costs in the future.

"Today's action will improve the health of our people and lower the burden of smoking-related conditions on our Medicaid system, while helping to fill the $2.7 billion Medicaid shortfall and stabilize the system for those that need it," he said in a statement.

Illinois' current tax rate -- 98 cents on every pack -- is the 32nd highest in the country. Only Missouri and Kentucky have lower rates among the Illinois border states.

With a $1 increase, Illinois would have the 16th highest cigarette tax rate in the nation, second only to Wisconsin among border states.

Suburban lawmakers expressed concerns a tax increase would push suburbanites across the border to get their cigarettes -- and potentially deprive the state of millions in revenue.

                                                                                                                                                                                                                       
 

But Wisconsin's tax is already $2.52, so they'd have to go to Indiana where taxes are about 99 cents per pack to get cheaper smokes.

"You can tell constituents who didn't want you to vote yes on this that Wisconsin cigarette taxes will be significantly higher even if ... this passes," Currie said.

The move comes just one day after lawmakers approved $1.6 billion in cuts to what it pays for health care for the poor. Lawmakers still need to approve a budget before the Thursday deadline.

The plan heads to the Senate, where similar cigarette tax hike proposals have been approved in the past.

"Every time they want to balance the budget, they pick on cigarettes," said Zakir Seedat, who owns the Tobacco and Candy Outlet in Naperville.

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