Some Chicago aldermen, small business owners and retail lobbyists want Mayor Rahm Emanuel to reconsider his tobacco tax proposal, saying the plan would adversely affect local businesses and neighborhoods, including those already impacted by black-market sales of "loosie" cigarettes.
But a coalition of health organizations is firing back, calling on the city council to "reject the tobacco industry's rhetoric and to pass a strong tobacco control ordinance."
Debate rages on over Emanuel's proposal to increase the smoking age in Chicago from 18 to 21 and impose a $6 million tax on non-cigarette tobacco products, with the revenue going in part toward Chicago Public Schools orientation programs. The plan is aimed at preventing "young people from picking up smoking, while investing in their education," according to the administration.
The proposed ordinance encountered aldermanic opposition at the monthly city council meeting held on February 10. Some opposing aldermen used a procedural move to delay consideration of the proposal for one month. They did so even after the Emanuel administration made changes to the ordinance to appease aldermanic critics.
Alds. Leslie Hairston (5th), Susan Sadlowski Garza (10th), David Moore (17th), Jason Ervin (28th) and Nicholas Sposato (38th) joined business owners and representatives from the Illinois Retail Merchants Association during a Tuesday morning press conference at City Hall to speak out against the mayor's tobacco plan.
Garza said she's worried new tobacco taxes would make it even more difficult to attract and keep businesses in her ward, which borders Indiana.
"I am losing retailers by the thousands ... because they can't keep up with the taxes that are being imposed on them," Garza said. "The people that live in my ward can walk across the street and shop in another state, where the taxes are much lower. I have one gas station in my ward, because they can't even keep up with the taxes that are being imposed on them. I have vacant storefronts. We cannot keep imposing taxes on the small businesses that are trying to keep our wards vibrant."
At $7.17 per pack, the city already has the highest combined state and local tax on traditional cigarettes in the country. Taxes on e-cigarettes also increased as part of Emanuel's 2016 budget. Meanwhile, in Indiana, the state cigarette tax is less than $1 at .995 cents per pack, according to TobaccoFreeKids.org.
Existing city regulations, Ervin said, have "created a black market, an underground economy" for the sale of single, or "loosie," cigarettes -- a problem that could get worse if new tobacco taxes are imposed.
After hearing concerns from aldermen about "loosie" cigarettes, the administration tweaked the proposed ordinance earlier this month to include stiffer penalties for those caught selling cigarettes illegally. Specifically, maximum proposed fines for the illegal sale of cigarettes in a pack of less than 20 cigarettes went up from $2,500 to $5,000 for a first offense and from $5,000 to $10,000 for subsequent offenses. Those caught selling "loosies" could also face up to six months in prison under the proposal.
Ervin called the increased penalties "ludicrous."
"This is a problem that we created, and now we want to solve it by putting generally young, poor, African-American, Latino men in jail. That is not the answer," Ervin stressed.
The proposed ordinance seeks to impose taxes on cigars, rolling tobacco and smokeless tobacco. An ounce of rolling and chewing tobacco would go up $6.60 and $1.80, respectively. The respective tax per each mini and full-sized cigar would be 15 cents and 90 cents.
In addition to CPS orientation programs, the tobacco tax revenue would be used for youth smoking cessation and health education programs as well as enforcement of provisions related to the illegal sale of tobacco products.
"I understand the city needs to raise revenue to cover spending, but it seems like tobacco has been really unfairly hit with this as a way to gain revenue," said Jim Bayci, a 7-Eleven franchisee in Chicago's Loop.
If the proposal is approved, "businesses will lose revenue," Bayci said, adding that "when you multiply this effect across all retailers in the city, taxpayers will be holding the bag for millions of dollars worth of lost tax revenue."
The city could set minimum prices for cigarettes and tobacco products if the new taxes do not survive a possible legal challenge, according to the proposed ordinance. The price floor for cigarettes, for example, could be set at $11.50 per pack under the measure.
Tanya Triche, general counsel for the Illinois Retail Merchants Association, described tobacco price floors as "government regulated price-fixing," adding that the administration "should take it off the table, because it's bad policy for the city."
"This is not what the city council should be doing -- telling us how to price our products, whether it's tobacco or anything else. And, frankly, anyone that has worked with the city for any amount of time knows that they aren't gonna stop with tobacco," Triche said. "And so for us, we really see it as a veiled threat. If you don't sue us, then we won't hurt you with minimum floor pricing."
Asked whether IRMA plans to sue the city if the ordinance is approved, Triche said, "I think right now we're focused on making sure that bad policy doesn't get passed, and we'll figure out what's left after that."
A request for comment was left with the mayor's office.
Emanuel told reporters after this month's council meeting that "the votes were there" to pass the tobacco ordinance. He said opponents "can delay" the proposal, "but you can't defeat it."
Asked whether opposing aldermen have enough votes to thwart the ordinance, if it is considered at next month's council meeting, Ervin replied, "We're still in the process of working through that."
"If this does come up for a vote next month, we will see," Ervin added. "Right now, we are still working with our colleagues, and working to just, you know, pull this type of strategy back. Because it just has not been successful for all of Chicago."
The American Heart Association, American Cancer Society Cancer Action Network, American Lung Association of Illinois, Respiratory Health Association and Illinois Academy of Family Physicians issued a joint statement Tuesday to "reaffirm strong support" for the proposed tobacco ordinance.
We are disappointed that several Chicago aldermen choose to side with tobacco interests rather than the health interests of their own constituents. When a handful of aldermen blocked final passage of the proposed tobacco ordinance at the last City Council meeting, what they were really blocking was the fight against heart disease, stroke and cancer.
Tobacco interests are using their old scare tactics to convince some city council members that maintaining the flow of cheap and available tobacco to teenagers in their communities is good for business and therefore good for the ward. We urge the Chicago City Council to reject the tobacco industry's rhetoric and to pass a strong tobacco control ordinance. We hope they realize that the tobacco industry is fighting this ordinance every step of the way because they need to recruit young smokers to replace those who are dying from the use of their products.
We ask all aldermen to put the health of their residents ahead of the need to sell and profit from a product that causes illness, disease and death, and also costs our city millions in health-care costs. Reducing tobacco use and guiding tobacco users to services and programs to help them quit is truly serving your community.