The measure was one part of a larger tax plan that would generate about $7 billion a year to help close Illinois' massive budget deficit. The cigarette portion was supposed to produce about $375 million.
The cigarette proposal got only 51 of the 60 votes needed to pass Tuesday, but it could be brought back for another vote later.
Adding a dollar would more than double the tax rate for cigarettes.
Many [image-nocss] lawmakers said that would hurt convenience stores and gas stations that sell cigarettes. They said the impact would be particularly harsh in border areas where neighboring states have lower taxes.A report released Monday said the state would gain $377 million in revenue by raising the cigarette tax $1 per pack, said The Bloomington Pantagraph.
In light of the report by economist Frank Chaloupka at the University of Illinois at Chicago, Senate President John Cullerton said in a statement that "a cigarette tax is one of the most important agenda items for the coming year" because it would generate new revenue. The Chicago Democrat also noted the higher tax would reduce Medicaid costs attributed to smoking-related health concerns and reduce people's desire to smoke.
Illinois last raised its cigarette tax to 98 cents per pack in 2002, and it had the 11th highest cigarette tax in the nation. The state now has the 32nd highest cigarette tax, Chaloupka said.
Federal and local taxes also add to the cost of a pack of smokes.
His report recommended raising taxes on all tobacco products--not just cigarettes--along with increasing the tax all at once instead of phasing it in smaller increments. The report also recommended taxing tobacco product inventory to prevent retailers from stockpiling it in anticipation of a tax increase.
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