Chicago Mayor Mulls Cigarette Tax Hike

Emanuel to recommend 75-cent-per-pack increase

Published in CSP Daily News

CHICAGO -- Chicago Mayor Rahm Emanuel plans to propose increasing the city cigarette tax by 75 cents to help plug a budget gap and provide more free vision care for low-income Chicago Public Schools students, according to a Chicago Tribune report.

The increase would leave Chicago with the nation’s highest total cigarette tax. The administration expects to collect an additional $10 million, with $8 million going toward the budget shortfall and $2 million to expand a program that provides free eye exams and glasses to students who fail vision screenings, a City Hall source told the newspaper.

The cigarette tax hike money represents only a fraction of the city’s estimated $339 million budget hole for next year. Even as City Hall was preparing to print budget documents on Sunday in advance of the mayor’s Wednesday budget address, there still was uncertainty over whether Emanuel will propose an increase in the city’s amusement tax on movies, plays, musical performances and sporting events.

Emanuel has ruled out politically toxic property and sales tax increases, so he will have to rely on other less-lucrative ways to raise revenue in addition to cutting costs. Further privatization of city services has been ruled out, the City Hall source said.

If aldermen approve the cigarette tax increase, it will come on top of $1 smoke tax increases by the state and Cook County that went into effect during the past 16 months. The city hike would increase the per-pack total tax in Chicago to $7.42, putting it ahead of New York City’s nation-topping tobacco tax, which now is 19 cents higher.

Spending an additional $2 million on the Chicago Public Schools vision program would allow it to serve 45,000 students instead of 30,000.

Keywords: 
cigarettes, taxes