Senate passes $1 cigarette tax hike
Updated: October 24, 2012 10:06PM
Smokers are on the verge of having to dig deeper to support their habit after the Illinois Senate voted Tuesday to increase the state cigarette tax by $1 a pack.
The measure, which passed the Senate 31-27, now moves to Gov. Pat Quinn, who intends to sign the legislation as part of a health-care package designed to reduce state spending on Medicaid.
“I want to thank the members of the General Assembly who rose to the occasion to save our Medicaid system from the brink of collapse,” Quinn said in a prepared statement released after the vote.
“Last week, members of both parties passed legislation to create the necessary savings to save Medicaid. Today the Senate joined the House to prevent children from smoking and allow the state to access vital federal funding to save our Medicaid system,” the governor said.
Echoing Quinn, Senate President John Cullerton (D-Chicago) said during floor debate that the tax hike, separate of its necessity to stabilize the Medicaid program, will be a life saver.
“I’d vote for it if it didn’t bring in a penny because of the idea that we’ll have 77,600 kids who won’t start smoking just because you push a green button or 59,000 adults who’ll quit,” Cullerton said, referring to the colored voting switch lawmakers use to vote “yes.”
Quinn’s imminent signature on the measure means that total taxes on a pack of cigarettes sold in Chicago will total $5.67 and $4.99 in suburban Cook County.
The cigarette tax component is part of the equation Quinn is using to come up with $2.7 billion for Medicaid through a mix of service cuts and the tax hike.
Tuesday’s Senate vote, which followed House passage of the legislation on Friday, came on the strength of an entirely Democratic roll call.
Republicans condemned the tax hike bill, sponsored by Sen. Jeff Schoenberg (D-Evanston), because of worries it will drive Illinois smokers across the border to buy lower-tax cigarettes on most sides of the state.
The price difference would be most pronounced along the Missouri border, where cigarettes would be $1.81 less per pack than Illinois. Indiana cigarettes would be taxed at a rate that is 98.5 cents per pack lower than Illinois.
But even with an Illinois tax hike, Wisconsin taxes cigarettes at a higher rate: $2.52 per pack.
GOP critics also said the emergence of the tax-hike legislation underscores how the Quinn administration and ruling Democrats at the Statehouse fell short to truly cut Medicaid, as the governor proposed, by $2.7 billion.
“The promise was to come up with $2.7 billion in reductions in the cost of Medicaid. Perhaps this bill would’ve been put forward even if we’d have met that challenge. But the reality is we didn’t meet the challenge,” said Sen. Kyle McCarter (R-Lebanon), who voted against the plan.
“We stopped short at $1.36 billion. We then went to a provider cut for $240 million,” McCarter continued, referring to rate reductions imposed against hospitals, nursing homes and other Medicaid providers. “We’re $1.1 billion short, and we choose to fill it with another tax increase.”