With cigarette smoking going down and smokeless tobacco gaining in popularity, an alderman proposed Thursday that Chicago impose a new tax to keep pace with that trend and chip away at a $30 billion pension crisis.
Ald. Proco Joe Moreno (1st) said the cash-strapped city could raise $30 million by slapping a 20 percent to 30 percent tax on the nicotine in a can, otherwise known as smokeless tobacco.
Chicago already levies a highest-in-the-nation tax of $7.17perpack on cigarettes, thanks to a 50-cents-a-pack increase included in Mayor Rahm Emanuel’s 2014 budget.
But there is no city tax on smokeless tobacco, which now comes in flavors such as cinnamon, apple and cherry — tailor-made to lure young people.
Moreno said that makes no sense at a time when Chicago needs every available dollar.
If state law prohibits municipalities from taxing smokeless tobacco, state law should be changed, Moreno said. If the Law Department concludes legislative approval is not required, the City Council should move immediately to correct the inequity, he said.
“It’s on the rise because it’s so much more difficult to smoke anywhere and it’s not cachet any more to smoke. Plus, it’s costly. It’s $12 or $13 [for a pack of cigarettes]. You can get this for $5,” Moreno said Thursday, pulling a can of smokeless tobacco out of his pocket for a quick show-and-tell.
“We always go to the cigarette and alcohol tax. We go back to it and back to it and back to it. And these [smokeless] products sit on the shelf, and we don’t even touch ‘em.”
Moreno was asked whether the smokeless tobacco tax was more about raising revenue than curbing nicotine use.
“It’s both. I know it’s cool to say, ‘It’s about the kids. It’s not about revenue.’ [But] it is about revenue. It’s also about acknowledging that this smokeless tobacco nicotine product is on the rise, whereas smoking is on the decline for a variety of reasons. Society is not accepting it any more. There are limited areas where you can smoke,” he said.
Moreno said the 20 percent to 30 percent tax was only a “low-end” starting point, and it could go to “50, 60 or 70″ percent.
“Every alderman has got to come up with a couple of ideas. And if we all come up with a $30 million idea,” that’s $1.5 billion, he said.
Last week, Emanuel moved his 2016 budget unveiling up a month and urged aldermen to come to him with their cost-cutting and revenue-raising ideas.
Proposals to chip away at the pension crisis have already started pouring in. They range from a city income tax, a gas tax and authorizing video poker in Chicago to a suburban-style garbage-collection fee and legalizing and taxing the recreational use of marijuana.
Last week, two mayoral allies also proposed a $3.3 million change that would repeal the so-called “grandfather clause” that has allowed more than 1,800 multi-unit residential buildings to continue to get free city garbage pick-ups that were phased out for most other multi-unit buildings in 2000.
The mayor has refused to comment on any of those ideas because he wants aldermen to have the “freedom” to come forward with their ideas. His only caveat is that, “They have to be things that we can implement and get done.”
Moreno’s proposed smokeless tobacco tax is an easy one for Emanuel to embrace.
Since taking office in 2011, the mayor has pursued a sweeping anti-smoking agenda that includes imposing the nation’s highest cigarette tax banning e-cigarettes wherever smoking is prohibited, moving them behind the counter of retail stores, snuffing out sales to minors and banning the sale of flavored tobacco products within 500 feet of schools.
As a result of all of those efforts and societal pressures, smoking among Chicago high schoolstudents and adults is declining.
Last year, Janet Williams, co-chair of the Illinois Coalition Against Tobacco, urged the mayor to slap a city tax on “other tobacco products,” including full-sized and mini-cigars, cigarillos, e-cigarettes and smokeless tobacco.
“That’s clearly the way the industry has been moving. They’re pushing for dual use. They want these products. We’re not just talking about that gummy tobacco stuff that you stick into your lip. They have other products to deliver nicotine, such as e-cigarettes, which the tobacco manufacturers are now taking over,” Williams said then.