* From a June, 2013 report by the generally anti-tax Heartland Institute…
Cigarette tax revenue in Illinois is falling far short of the amount projected last year, state officials say.
In May of 2012, state legislators approved a $1-per-pack increase on the price of cigarettes, nearly doubling the state’s tax rate to $1.98 per pack, the 17th-highest state tax rate in the nation. However, the tax delivered only $212 million of the expected $350 million for the fiscal year ended June 30.
Governor Pat Quinn (D) said the cigarette tax increase would help sustain the state’s Medicaid program, as well as the School Infrastructure Fund, while also discouraging smoking. But The Heartland Institute, Illinois Policy Institute and other public policy groups predicted the state would fail to receive the projected increase in tax revenue. They noted the likelihood that consumers would try to avoid the tax by buying cigarettes out of state, where taxes are lower.
* Also from June, we have this from the Illinois Policy Institute…
Remember when the state of Illinois said its new $1 cigarette tax would bring in $350 million in additional revenue?
Unless this tax garners an additional $138 million in the next 10 days, these lofty projections are about to crash and burn.
The cigarette tax hike, which took effect a year ago this month, is only on track to bring in $212 million in revenue for the current fiscal year that ends June 30, according to a report from the Commission on Government Forecasting and Accountability, or COGFA.
* The AP explained the shortfall in June…
There’s typically a decline in cigarette sales after a tax increase, as some people stock up before the rate hike, while others use it as a chance to stop smoking.
“This tax was discussed and talked about quite some time before it actually went into effect, so individuals went out and purchased in bulk a bunch of cigarettes, so more of those packs were sold under the lowered tax rate,” said Jim Muschinske, the commission’s revenue manager.
Total cigarette tax revenue for the year is expected to reach almost $788 million, up 37 percent from the previous year. The money from the cigarette tax is used for the state’s general fund, Medicaid program and School Infrastructure Fund.
* Well, the July revenue report from the Commission on Government Forecasting and Accountability was released this morning. COGFA reports that cigarette tax revenue last month was up 150 percent over July of 2012. From the report…
While cigarette tax posted an $18 million increase, the gain was due to last July’s falloff related to the “stockpiling” effect of that year’s rate increase. This year, cigarette taxes to the general funds returned to statutory levels.