Emanuel wants 75 cents a pack cigarette tax increase

Mayor Rahm Emanuel plans to propose increasing the city cigarette tax by 75 cents to help plug a budget gap and provide more free vision care for low-income Chicago Public Schools students, a City Hall source said Saturday.

The increase would leave Chicago with the nation’s highest total cigarette taxes. The administration expects to collect an additional $10 million, with $8 million going toward the budget shortfall and $2 million to expand a program that provides free eye exams and glasses to students who fail vision screenings, the source said.

The cigarette tax hike money represents only a fraction of the city’s estimated $339 million budget hole for next year. Even as City Hall was preparing to print budget documents on Sunday in advance of the mayor’s Wednesday budget address, there still was uncertainty over whether Emanuel will propose an increase in the city’s amusement tax on movies, plays, musical performances and sporting events.

Emanuel has ruled out politically toxic property and sales tax increases, so he will have to rely on other less-lucrative ways to raise revenue in addition to cutting costs. Further privatization of city services has been ruled out, the City Hall source said.

That approach will result in “a whole package” of options that aldermen will have to consider as they weigh in on the budget proposal, said Ald. Patrick O’Connor, 40th, the mayor’s City Council floor leader. “I don’t think that anybody is going to go through this and say I’m happy with everything here,” he said.

O’Connor predicted the new budget will be tougher for aldermen to swallow than last year’s spending plan — when there were no tax, fee or fine increases other than adding speed camera revenue — but less difficult than the mayor’s first budget, which increased a host of taxes, fees and fines while cutting and privatizing services.

If aldermen approve the cigarette tax increase, it will come on top of $1 smoke tax increases by the state and Cook County that went into effect during the past 16 months. The city hike would increase the per-pack total tax in Chicago to $7.42, putting it ahead of New York City’s nation-topping tobacco tax, which now is 19 cents higher.

Spending an additional $2 million on the CPS vision program would allow it to serve 45,000 students instead of 30,000.

In keeping with the theme of expanded youth programs, the mayor also plans to propose increased funding for after-school and summer jobs programs, allowing the city to continue increase funding for those programs despite federal cuts, the source said. Funding would come from revenue generated by the city’s speed cameras near schools and parks that are just starting to issue fines.

If approved, the total budget for after-school programs would be $12 million, a 15 percent increase since Emanuel took office in May 2011.

Meanwhile, some aldermen are expected to push for a commuter tax on suburban residents who work in the city, something the mayor has rejected partly because he worked to get rid of the city’s head tax on employees that businesses despised.

“For God sakes, we just got rid of the head tax,” O’Connor said. “If that's just a replacement for the head tax, I think that's counter-intuitive.”
Twitter @ReporterHal

Copyright © 2015, RedEye
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