Sunday, June 30, 2013

Told you so: Illinois smoking tax falls short of revenue projections

Sheesh, I warned Illinois' tax-raisers that this would happen. But they wouldn't listen to me--they never do.

When taxes go up on tobacco products, revenue forecasts always fall short. Some people quit smoking, but those that continue the habit drive across state lines to buy cigarettes or purchase them from smugglers.

And my fellow Illinoisans are adept at gaming any system. It's in our blood.

From Gatehouse News:
Illinois' one-dollar-per-pack cigarette tax increase that took effect a year ago this month is expected to fall $130 million short of initial estimates, meaning it won't raise quite as much as projected for school capital projects because of the way the funding formula is set up.

The increase, which hiked the state’s 98-cents-per-pack tax to $1.98 last June, is expected to bring in about $212 million in additional revenue for the current fiscal year, which ends June 30.

That’s well short of the $350 million in additional revenue originally projected, according to a monthly report released at the end of May by the Commission on Government Forecasting and Accountability.
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