$1-per-pack tax hike may hurt cigarette sales
Libertyville, 6/13/12 Mike Patel, owner of Tobacco Outlet in Libertyville, works at the store June 13. Patel talked about how the upcoming tax increase on tobacco starting June 24 will affect his business. | Curtis Lehmkuhl~Sun-Times Media
Updated: July 22, 2012 6:09AM
Mike Patel informs a woman customer at his tobacco shop in Libertyville about the state’s $1-per-pack hike in the cigarette tax that takes affect on June 24.
“Maybe I should get another cartoon before it goes up,” the woman responds with a chuckle.
For tobacco store owners and cigarette users, the new state cigarette hike is a tough pill to swallow.
“The state has increased cigarettes by $1 a pack. That’s $10 per cartoon,” said Patel, owner of the Tobacco Outlet on Peterson Road in Libertyville, adding that taxes for cigars and other tobacco products are also increasing.
“People want to smoke,” he said. “They have the habit but they don’t have a lot of money and now the state is going to raise the tax. It will hurt our business.”
The Illinois legislature recently approved the $1-per-pack hike in the cigarette tax to raise funds to support the state’s ailing Medicaid system for health care for the poor.
Despite critics, the cigarette tax hike is getting praise from local public health officials who believe it may help curb smoking in the state.
Kris Andersen, coordinator of the Lake County Health Department’s Tobacco Free Lake County Program, said research suggests that young people are less likely to start smoking and adults are more likely to consider quitting smoking when cigarette taxes are raised.
‘Why tax smokers?’
“Consequently, since tobacco is the No. 1 leading cause of preventable death and disease, this will have an overall positive effect on the residents of Illinois,” Andersen said.
“Sometimes you need an incentive to make health choices in life,” she said. “If the cost of the pack of a cigarette is enough to make people consider quitting, that’s a very good thing.”
But local tobacco shops believe the tax hike will hurt businesses in Illinois and smokers will instead purchase cigarettes in other nearby states like Indiana, where sales taxes are lower.
Bhavik Patel, owner of Mundelein Tobacco, which sells cigarettes, cigars and other tobacco products, believes his store could see as much as a 30 to 40 percent reduction in its sales because of the state’s cigarette tax hike.
Patel said many of his customers who smoke believe the tax hike is unfair.
“Every time the state needs money they tax cigarettes,” he said. “That’s why they’re getting mad. Why just tax smokers?”
Andersen said she does not believe Illinois’ cigarette taxes are out of line with many other states. Before the cigarette tax hike, she said Illinois ranked 32 in terms of cigarette taxes. The tax hike would increase the state’s total cigarette tax from 98 cents to $1.98 per pack, which is still below many other states, including neighboring Wisconsin.
“Health officials are sympathetic to the economics but we don’t think it’s a significant hardship,” she said.