Illinois House Passes $1 Cigarette Tax Increase

Published in CSP Daily News

Other tobacco taxes would rise by similar levels

SPRINGFIELD, Ill. -- The Illinois House agreed Friday to double the tax on cigarettes and other tobacco products to help close a $2.7 billion budget hole in health care for the poor, said the Associated Press.

The measure passed 60 to 52, the bare minimum needed for approval, said the report. It now goes to the state Senate, which has backed similar increases in the past, the news agency said.

Supporters warned that without money from the tax increase, Illinois will be forced to make even deeper cuts to Medicaid services or take the money from other parts of the budget, such as education.

The legislation boosts the state tax on cigarettes by $1, to a total of $1.98 a pack. Other tobacco taxes would rise by similar levels. In addition to raising tobacco taxes, the measure imposes a new tax on hospitals that would be matched by the federal government. In all, the measure is supposed to generate $800 million a year.

The vote came one day after the General Assembly slashed roughly $1.6 billion in Medicaid services and payments. Those cuts mean nearly 200,000 senior citizens will lose prescription drug coverage, 35,000 adults will lose their health insurance and tens of thousands more will see specific services cut off or scaled back.

Together, the tax increase, spending cuts and $300 million in other budget maneuvers are supposed to ensure Medicaid breaks even in the coming fiscal year.