Wednesday, March 16, 2011
 
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Cullerton eyes cigarette tax hike, GOP backs away

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[March 16, 2011]  SPRINGFIELD -- Democrats in the Illinois Senate may be on their own as they try again to raise the state's cigarette tax.

Senate President John Cullerton, D-Chicago, said on Tuesday that he hopes to pass a $1-per-pack tax increase by the end of the week. Cullerton is framing the tax hike as a way to both offset money Illinois has not yet received for statewide construction projects and a path to help people quit smoking.

The original plan to pay for billions in new roads, schools and bridges is tied up in a legal challenge now before the Illinois Supreme Court. New taxes on beer and liquor, as well as newly legalized video poker, were supposed to pay for all of the work. But video poker has been slow to roll out, and one of Chicago's largest liquor distributors is challenging the liquor tax.

Cullerton said his cigarette tax would provide $300 million in money that the state needs now.

"This is not for the budget of the state of Illinois, it's for the capital bill," Cullerton said. "This money (will) make sure that we can continue to keep people working on the infrastructure projects that have been ongoing this year."

Drawing that line between construction and the state budget may help Cullerton shepherd the tax through the Statehouse. The Senate president expects a vote in the upper chamber, perhaps as soon as Wednesday afternoon. He's hoping for cooperation from Republicans and eventually from the Illinois House.

"We've been working on the capital bill together," said Cullerton. "I don't have an agreement, but I have hope that we have enough votes in the House."

Cullerton's hopes may be dashed. Senate Republican budget expert Matt Murphy, R-Palatine, said he'd be surprised if any GOP lawmakers sign on to another Democratic plan to raise taxes again this year.

The Senate president "wants to raise (the cigarette tax) by a dollar a pack, which is going to kill our border towns in particular," Murphy said.

The plan headed for a vote would phase in the $1-per-pack tax in two 50-cent increments. The earliest smokers could see the new tax would be July. Illinois' current tax is 98 cents per pack, which is in line with other states.

Lawmakers in border communities say it's one of the few taxes that are not higher than in neighboring states.

State Rep. Jil Tracy, R-Quincy, said Missouri has lower taxes on cigarettes and lots of other things that consumers buy each week.

"They already have less expensive gas over there because of our sales tax on gasoline," she said. "Alcohol likewise is taxed cheaper over there."

Tracy said another tax increase in Illinois would be a competitive advantage for Missouri.

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Democrats along the border may also have a tough time voting for Cullerton's plan.

State Rep Pat Verschoore, D-Milan, said the Iowa side of the Quad Cities draws a lot of folks across the river.

"We already have people going over to Davenport to buy cheaper gas," Verschoore said. "And if they put the cigarette tax, that'll make our cigarettes more expensive than they are at Iowa. So they'll pick up their cigarettes also. So I think it'll harm our businesses, and I would probably vote 'no' on that."

To the north, Wisconsin has been trying to poach Illinois businesses. State Rep Dave Winters, R-Rockford, said no doubt they'll go after Illinois smokers next.

"If you raise cigarette taxes substantially in Illinois, you'll see quite a change in consumer behavior. The hard-core cigarette smokers will not only go to pick up smokes in Beloit, Wis., but they'd also typically get their groceries, and they may fill up their gas tank when they're there."

Culleton has pushed for a cigarette tax increase in the past and has suggested the same increase of $1 per pack a number of times. The Illinois House has been reluctant to follow suit. Cullerton said Gov. Pat Quinn is on board with the plan, but he isn't saying if the governor's support will bring any votes to the table.

[Illinois Statehouse News; By BENJAMIN YOUNT]

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