CHICAGO -- Faced with a $298-million budget deficit, Chicago Mayor Rahm Emanuel has pledged not to raise taxes on homes, gasoline or retail purchases. However, he has not ruled out a cigarette tax hike for the city, according to a report from Medill News Service.
Chicago already has the second-highest cigarette taxes in the country, second only to New York City. As of June, the average total cost of a pack of cigarettes in Illinois was $10.25, cheaper than only New York’s $12.50 per pack.
Cook County Board president Toni Preckwinkle proposed a plan Tuesday to raise the Cook County tax on smokes to $3 from $2. Faced with a large budget shortfall, Emanuel has not ruled out a similar increase for Chicago’s tax, according to the report.
“If we do consider the cigarette tax, it has to invest in children’s health,” Emanuel said.
But a tax hike won’t necessarily mean more money for the city because many smokers have the option of driving across state lines to buy cheaper cigarettes. A pack in Wisconsin is about $7.98, which ranks it 11th in the nation. Indiana is 39th on the list at $5.56 a pack.
The Cook County Board acknowledges Chicago’s smokers may take their business elsewhere if the tax hike is approved. “As taxes go up, consumption goes down, especially for cigarettes,” said Cook County spokesman Owen Kilmer. “So we are actually expecting a revenue loss.”
In Chicago, the combined tax on a pack of cigarettes is currently $5.67, including a federal tax of $1.01, Illinois tax of $1.98, Cook County tax of $2 and the city of Chicago tax of 68 cents.