CFL News
November 10, 2011

Aldermen: Tax cigars, chewing tobacco to reduce budget cuts

A group of aldermen are proposing closing loopholes in the cigarette tax to help avoid painful cuts to 911 dispatch, mental health centers and libraries in Chicago's proposed 2012 budget

Source: Chicago Sun-Times

By Fran Spielman

Cigar and pipe smokers and those who like to chew their tobacco would have to pay Chicago’s cigarette tax, under a crackdown proposed Wednesday to stave off budget cuts impacting libraries, mental health centers and 911 dispatch.

Aldermen Leslie Hairston (5th) and Matt O’Shea (19th) want to follow the Cook County Board’s lead and close a legal loophole that has allowed all tobacco products other than cigarettes to escape the city’s sin tax.

O’Shea made no bones about it. He’s searching for a way to restore more than the $3.3 million in library cuts Mayor Rahm Emanuel has agreed to replenish.

Emanuel is also standing pat on his plan to close six of the city’s 12 mental health centers and cut police and fire dispatch in a way that could send response times and employee burnout rates through the roof.

“Although a significant amount of the library cuts have been restored, my community is still asking. ... We don’t want to see any reduction in hours. We don’t want to see any reduction in service,” O’Shea said after introducing the ordinance at Wednesday’s City Council meeting.

“The mental health cuts are devastating to my community. The Beverly-Morgan Park facility, which services 354 residents of my community, is scheduled to close.”

He said residents are also “very concerned” about cuts to the Office of Emergency Management and Communications.

“There’s [already] a lag in wait times on the phone. And as this economy continues to stay south, crime is gonna continue to spike, and crime comes to my community. That’s what my residents are concerned about,” O’Shea said.

O’Shea acknowledged that he got the idea from County Board President Toni Preckwinkle, who wants to tax cigars and loose tobacco to generate $12 million for her 2012 budget.

“I’m looking for sources of revenue. … Cigarettes are the only forms of tobacco taxed in Chicago. Let’s take a look at pipe tobacco, chewing tobacco” and cigars, he said.

Chicago’s cigarette tax is currently levied at a rate of 68 cents per pack of 20, or 3.4 cents per cigarette.

The ordinance introduced Wednesday would replace that cigarette-only tax with an 18 percent tax across the board on all tobacco products.

O’Shea said he has no idea how much money the broader tax would generate. But whatever it is, he wants to use the revenue to reduce the library, mental health and 911 center cuts.

A final vote on the 2012 budget is scheduled for next Wednesday.

Finance Committee Chairman Edward M. Burke (14th) agreed that, if cigarette smokers are paying through the nose, it’s only fair that the city “close the loophole.”

“The idea has floated around here in the past. This is not a new idea. It just has never been implemented,” Burke said, cautioning O’Shea not to count on the revenue in 2012.

Also on Wednesday, Burke and O’Shea joined Aldermen Will Burns (4th) and Harry Osterman (48th) in proposing a ban on the sale of all types of synthetic marijuana sold in Chicago.

Their ordinance targets products tailor-made to “circumvent” a state law that took effect on Jan. 1.

“It’s been brought to our attention that, in some stores around the city, there’s a new product being sold that apparently has the same effect as marijuana, but is not illegal,” Burke said.

“People shouldn’t be operating vehicles and shouldn’t be using this to get high and then conduct themselves on the public way. It ought to be banned.”

Violators would face fines ranging from $500 to $1,000 for each offense. They could also have their business licenses revoked.