CHICAGO (CBS) – Despite some aldermen expressing concern about the impact on Chicago retail stores, Mayor Rahm Emanuel on Monday was sticking by his plan to increase cigarette taxes to help balance the city budget.
WBBM Newsradio Political Editor Craig Dellimore reports aldermen were holding their first hearing on the mayor’s budget plan on Monday at City Hall.
Even before budget hearings began, some aldermen said they were worried that a proposed 75-cent-per-pack increase in cigarette taxes would drive consumers to Indiana and the suburbs, where the taxes are lower, hurting the city’s retailers.
Some also have said a higher cigarette tax would spur more black market sales.
However, the mayor said revenue from the tax would pay for more healthcare for young people, and is the best way to raise money for that purpose.
“Fifteen-thousand more children will get eye exams; 15,000 more kids will get the coverage for their Medicaid – full preventive healthcare that they’ve not been enrolled in, they will now get enrolled in,” he said. “And I think that’s the right type of investment to do, and I think it’s the right step, because it also reduces health care costs for those associated with smoking.”
Already in Chicago, the total combined federal, state, county and local tax on cigarettes is $6.67 per pack; just behind New York, which has the highest combined cigarette tax rate at $6.86 per pack. If approved, Emanuel’s proposed cigarette tax hike would push the city’s tax rate to $7.42 per pack.
The mayor’s office has estimated the cigarette tax hike would produce $10 million in new revenue for next year’s budget.