SPRINGFIELD - Tax and fee increases already approved by Illinois lawmakers may thwart a push to raise the tax on cigarettes.
State Rep. Karen Yarbrough, who is sponsoring the legislation in the House, said there is not enough support yet to approve the tax increase. But she added legislators may change their mind by Sunday, the last scheduled day of the spring legislative session.
"I need some more votes, but lots of things can happen," said the Chicago Democrat. "There is a whole plethora of taxes as it is, and this is just another one."
A $1 boost to the price of cigarettes could raise $350 million for lawmakers who are desperately searching for answers to fill nearly a $12 billion budget hole. The measure earlier won approval in the Senate, but has stalled in the House.
Opponents of the hike point to the law of unintended consequences.
According to a study conducted by the Mackinac Center for Public Policy in Michigan, one out of every three packs of cigarettes smoked in Illinois would be contraband if the increase goes into effect.
"The empirical evidence and practical experience tells us that you will have increased smuggling just as sure as the sun will rise tomorrow," said Michael LaFaive, center director.
The $1 tax hike, which would begin with a 50 cent increase in September and 50 cents more a year later, would make Illinois the highest taxed among bordering states at $1.98 a pack.
"The fact is that people are filling up vans and they're driving them across the border to other states," said state Sen. Mike Jacobs, D-East Moline.
In Illinois, it is against the law to redistribute cigarettes that do not have an Illinois tax stamp. It is legal, however, to purchase cigarettes across the border.
The Illinois Department of Revenue, which monitors illicit cigarette sales, is set to hire seven additional agents to help enforce potential smuggling increases.
"If we were to see certain wholesalers purchasing significant fewer cigarettes we would know there is something going on and we would bring people in and investigate," said Susan Hofer, agency spokeswoman.
State Sen. Dave Luechtefeld, R-Okawville, said he already sees people crossing the Mississippi River and heading to Missouri convenience stores.
"There is a bridge across the Mississippi River at Chester, Illinois," Luechtefeld said. "They've estimated that over half of the traffic that goes across that bridge goes over to buy gas and cigarettes."
The possibility of bringing more revenue to the state is usually more convincing to lawmakers, LaFaive says.
"My sense is that legislators are more addicted to tobacco revenue than smokers are to nicotine," LaFaive said. "They don't care about the evidence as long as the evidence shows a net revenue gain."
The legislation is Senate Bill 44.
Posted in News on Friday, May 29, 2009 12:00 am Updated: 11:40 am.
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