CHICAGO (MCT) — Mayor Rahm Emanuel has agreed to reduce the size of his proposed cigarette tax increase, but Chicago is still poised to have the highest per-pack tax in the nation.
At a City Council Finance Committee meeting Monday, a day before the full council vote on the mayor's 2014 spending plan, aldermen recommended reducing the proposed tax hike to 50 cents a pack from 75 cents.
Even still, the increase would bring Chicago's combined federal, state and local per-pack tax to $7.17 -- the highest in the nation and 31 cents ahead of New York City's total tax tab of $6.86.
Since Emanuel first proposed the increase Oct. 23 as part of his proposed $7 billion budget, aldermen have questioned the potential effects. Many said it would hurt gas stations and convenience stores on the borders of the city, where customers can cross into the suburbs or Indiana to buy cheaper smokes, and give a boost to black-market cigarette sales.
The reduction to 50 cents a pack would provide "a nice balance" between the mayor's efforts to curtail smoking and the concern of aldermen about retail sales and the black market, Budget Director Alexandra Holt told aldermen.
Emanuel, Dr. Bechara Choucair, commissioner of the Chicago Department of Public Health, and medical groups have championed the higher tax, saying it would prod thousands of people to quit smoking and prevent thousands of youngsters from ever starting.
Holt also noted about $1 million of the new money coming in from the tax will still be used to expand free vision care and Medicaid enrollment for low-income Chicago Public Schools students.
Ald. Jason Ervin, 28th, one of the most vocal opponents of the proposed 75-cent boost, said the city also has agreed to set up a reward program, under which tipsters who report illegal cigarette sales can get $100 for each tip leading to a conviction.
The city already had planned to step up its efforts to find and punish sellers of black-market smokes, whether they are packs sold in stores without tax stamps or "loosies" sold one at a time on the street.
At 75 cents, the tax was expected to bring in about $10 million. At 50 cents, it would bring in $7 million, according to budget documents. The difference would be made up by increasing the fine for parking in front of a fire hydrant to $150 from $100 and tapping the operating funds of the city's two airports to pay for more aviation-related costs at City Hall.
Retailers may not be thrilled, but they expressed some satisfaction with the compromise.
"We appreciate Mayor Emanuel and members of the City Council hearing the concerns of retailers and local communities," said Tanya Triche of the Chicago Retail Merchants Association. "While we would have preferred no increase in the cigarette tax, this compromise will make less of an adverse impact on local businesses."
Emanuel has largely framed the cigarette-tax debate as one over health, and last weekend he announced proposals to place the same regulations on the sale and use of electronic cigarettes as the old-fashioned variety.
State law will ban the sale of e-cigarettes to anyone under 18 on Jan. 1. The mayor's proposal would ban smoking of e-cigarettes anywhere the smoking of regular cigarettes is prohibited. And it would require merchants that stock e-cigarettes to keep them behind the counter.
He also proposed banning the sale of menthol and flavored cigarettes within 500 feet of a school. They now cannot be sold within 100 feet of a school.
• Tribune reporter John Byrne contributed.
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