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Illinois Cigarette Tax Hike Underway: Packs Now Cost $1 More Citywide

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CHICAGOCIGARETTETAXHIKE
Joanne Hinkel holds a cigarette during the grand opening of the new Marshall McGearty Tobacco Lounge 19 January, 2006 owned by the R.J. Reynolds Tobacco Company in a Chicago, IL neighborhood. It is intended to be the first upscale, luxury lounge dedicated to the smoking of cigarettes. R.J. Reynolds has circumvented a new smoking band by classifying the bar as tobacco retailer. AFP PHOTO/Jeff HAYNES | Getty Images

It's about to hurt even more to light up a cigarette in Illinois: in addition to the health risks associated with smoking, the habit will be more damaging to Chicagoans' wallets after the newest tax hike went into effect Sunday.

The Illinois Senate voted 31-27 in May in favor of raising the state tax on cigarettes by $1, from 98 cents to $1.98 per pack.

Illinois Gov. Pat Quinn signed the measure into law earlier this month, a tax hike expected to generate some $350 million for the cash-strapped state.

The measure was proposed by Gov. Quinn to help offset the state's $2.7 billion pension budget shortfall in addition to massive cuts to the state's Medicaid program, and mirrored a similar effort led by Illinois Senate President John Cullerton the year before that would have funded capital investment projects but failed to gain traction.

When Quinn first proposed the hike, critics complained that the lower prices for cigarettes in border states could drive business out of Illinois and hurt small retailers.

The Chicago Tribune reports that law enforcement and the Bureau of Alcohol, Tobacco, Firearms and Explosives may be ramping up their enforcement against cigarette smugglers and other attempts at evading the higher per-pack tax.

Chicago now has the second-highest cigarette prices in the nation, with $4.66 in taxes tacked on to each pack, trailing behind New York's massive $5.85 per-pack taxes, thanks mostly to Cook County's additional $2 per-pack tax, according to data from TobaccoFreeKids.com. Cigarette taxes elsewhere in the state rank Illinois at 16th in the nation for the most tacked-on taxes.

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