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Illinois moves to raise cigarette taxes



Springfield, Ill. – The full Illinois Senate could vote this week on whether to raise cigarette taxes to pay for construction projects after a committee approved the plan Wednesday.

The tax would be raised by $0.75, bringing the total state tax to $1.73 a pack.

The measure, which passed 6-3 Wednesday in the Revenue Committee, would generate about $328 million a year for the state. Supporters want to use the money to pay for new roads, schools and other construction projects.

The tax increase could come up for a vote by the full Senate this week.

Gov. Rod Blagojevich, an outspoken opponent of sales tax increases, said he supports the cigarette tax because it would discourage smoking and provide money for long-delayed construction projects.

Advocates estimate the price increase would encourage 48,000 adults to quit smoking and keep 98,000 minors from starting. The decline in smoking is factored into the $328 million revenue estimate from the tax, they added.

Opponents argued the tax would simply drive more people to buy cigarettes on the black market or in neighboring states with lower prices meaning a blow to Illinois stores.


Also Wednesday, a committe approved a cheaper version of the governor's health plan Wednesday, hoping to break the bitter impasse over a new state budget.

The slimmer health care plan represented a significant concession by Gov. Rod Blagojevich. It would cost about $1.2 billion a year instead of the roughly $3 billion price tag for his original version.

The lower cost would be achieved partly by restricting eligibility for some programs and cutting back the care offered to some poor people.

Blagojevich greeted the committee votes as "a promising development" in the budget deadlock that has dragged on for a record-breaking 56 days. But he acknowledged even his slimmed down health plan doesn't yet have enough support to pass in the Senate.

The Democratic governor hopes to round up the necessary votes for a Senate victory that would increase pressure for the House to consider his plan. Blagojevich stressed he would keep insisting on the health care plan even if it fails in the Senate.

"The only thing it changes is the timeline. It means we'll have to be here longer," Blagojevich said in an interview with The Associated Press.

"The bottom line here is, there's not going to be a budget resolution without a health care plan ... whether we have to stay here through August to get it done or through September."

Senate Democrats said they plan to vote over the next few days on pieces of a potential budget agreement.

Sen. Terry Link, a top lieutenant to Senate President Emil Jones, said it could provide "a tremendous starting point" for renewed negotiations. But key to their plan is a $2 billion gambling expansion that passed the Senate in May and already has been rejected by a House committee.

The governor's revised health plan passed 7-4 in the Public Health Committee and now goes to the Senate floor.

After months of resisting changes to the plan's key points, Blagojevich said he agreed to scale it back because lawmakers told him it was too complex, required too many politically risky votes and would divert money that should be spent on schools.

One change is to lower the income threshold for families qualifying for help paying insurance premiums. Now the maximum income would be three times the poverty level, rather than four times.

Another change is to cut back the size of a program for people below the poverty line but who don't have children and therefore can't join Medicaid.

Blagojevich said the revised plan still would offer some level of health care to all 1.4 million Illinoisans who lack insurance, if they want it.

Blagojevich and House Speaker Michael Madigan, D-Chicago, again traded gibes over the budget deadlock.

Madigan said health care has been one of the governor's "three failures to date" in the legislative session, listing proposals to privatize the lottery and create a major new business tax as the other two.

"The governor's style of leadership is designed to tear people apart, not to bring people together," said Madigan, who insists Blagojevich's ambitious proposals cannot pass and should be abandoned for a far smaller budget.

Blagojevich repeated his contention that Madigan, chairman of the Illinois Democratic Party, has formed an alliance with Republican leaders and is "hiding" behind them to block programs most Democrats support.


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