$1 Dollar Cigarette Tax Falling Short
By: Marty Kasper
Updated: March 15, 2013
ROCKFORD - When the dollar tax was implemented it more than doubled the previous tax on cigarettes, and is now being blamed for driving smokers outside the state to make a purchase, as well as hurting local shops that rely on cigarette sales to stay in business.
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"Sales have been down, so obviously profits have been down," said Abe Muhssen, manager at Tobacco Express.
Muhssen says over the past year he tax has limited the less fortunate.
"So, they're unable to buy like they use to," said Muhssen.
The latest figures from the state show the tax isn't working. Money from the tax goes into the Medicaid fund, but over the last year the state has only seen a 3.4% increase in revenue from the tax. Which amounts to about 12 million dollars in revenue, not the near 300 million dollars that was thought would be generated.
"Clearly, now a year later, we're realizing this is not working," said 34th District state senator Dave Syverson.
Syverson says he thinks people are leaving the state to buy cheaper packs, hurting the profits.
"When you are surrounded by states that have lower taxes," said Syverson. "For that big of a difference, we knew that there would be migrations."
Here locally, store managers believe people who smoke are traveling around the Stateline to find the cheapest price, no matter how much gas costs.
"Whether they save five or two cents, they're going to go for it," said Muhssen.
For Muhssen, at this point the fix is simple.
"It's not paying out," said Muhssen. "So, they should lower it back down, maybe people will buy more, they [the state] make more, I make more, everybody's happy."
Syverson says the state looses even more than just money
from cigarette purchases, because he says when people cross the border to buy
their smokes they also fill up their gas tank and buy lottery tickets, all at
cheaper prices than here in
