Tax hike prompts rush for smokes
By Mike Nolan mnolan@southtownstar.com June 23, 2012 6:20PM
Southland cigarette retailers said they saw demand surge Saturday ahead of a $1-per-pack hike in the state's cigarette tax, which takes effect Sunday.
Updated: July 25, 2012 6:51AM
Smoke ‘em if you got ‘em.
On the eve of Illinois’ $1-per-pack hike in the state’s cigarette tax, Southland retailers were seeing a rush of customers looking to stock up and save, and some stores even had to impose limits on how much customers could buy.
Starting Sunday, the tax on a pack of smokes will jump from 98 cents to $1.98, with the increase being lauded by health advocates as ultimately helping to cut smoking rates in Illinois. Cigarette store owners said that while some might choose to kick the habit in the face of higher prices, most of their customers will simply drive a bit farther, to Indiana, to get their fix.
“Customers are going to drive to Indiana, where gas is cheaper, cigarettes are cheaper and even food is cheaper,” Mike Hazin, owner of Oak Lawn Tobacco Island, said Saturday. “They (Illinois lawmakers) are going to run all the revenue out of the state.”
With the increase, the total tax on a pack of smokes in Chicago would jump to $5.67, while it would be $4.99 in suburban Cook County.
Gov. Pat Quinn convinced legislators to approve the tax increase to raise revenue and avoid dire cuts in state Medicaid spending.
Indiana’s tax rate is 99.5 cents per pack, but that doesn’t include additional taxes tacked on by counties. Still, local cigarette retailers said that, depending on the brand, per-carton prices would be anywhere from $30 to almost $40 cheaper in Indiana compared with Cook County.
The owner of an Oak Lawn tobacco shop, who didn’t want to be identified or have his business named, said he’s expecting his sales to “drop significantly” once the increase takes effect.
“Our customers are saying they are going to Indiana” to buy their cigarettes, he said.
To help conserve inventory, Border Tobacco in Tinley Park had to put limits on what customers could buy, according to employee Mohamad Ghaddar.
His customers told him Saturday that other retailers were also placing restrictions on how many packs or cartons customers could buy of certain brands. Ghaddar said he was also “getting customer who I have never seen before” in the store.
Retailers that sell cigarettes had apparently been trying to stock up in advance of the tax hike, causing shortages of some popular brands.
“We’ve been having a hard time getting cigarettes,” Ghaddar said.
Mo Atieh, manager of Eddy’s Tobacco in Homer Glen, said the supply at his store was running low, and that many small retailers were having trouble getting smokes from distributors.
“There’s a big shortage,” he said. “You look at my shelves, every brand is hard to come by.”
The national group Campaign for Tobacco Free Kids estimates Illinois’ tax increase will keep 72,700 Illinois kids from picking up the smoking habit, and that 53,400 adults who currently smoke will quit because of the higher expense. The group estimates the tax will bring in $350 million in additional revenue for the state.
“Every research organization that’s looked at this ... has concluded that raising price is one of the most effective ways to reduce tobacco use, especially among young people,” Danny McGoldrick, vice president of research for the organization, said.
Contributing: The AP
