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Emanuel pushes back against aldermanic opposition to cigarette tax hike

Local GovernmentRahm EmanuelCarrie AustinChicago MayorTelevision IndustryBrendan ReillyRoberto Maldonado

As he tries to win approval for a higher cigarette tax, Mayor Rahm Emanuel announced Thursday that he is stepping up city efforts to crack down on black-market smoke sales.

With some aldermen balking at Mayor Rahm Emanuel's 75-cents-a-pack cigarette tax increase, the mayor pushed back at one of their main complaints by announcing Thursday that he'll hire two more inspectors next year to go after black-market smoke sales.

The city now has four employees to find and fine business that sell packs of cigarettes without tax stamps and would have six next year, said Rosemary Krimbel, commissioner of the Department of Business Affairs and Consumer Protection.

The crackdown effort also involves working even more closely with the Police Department, whose officers have the sole authority to issue citations outside stores for the sale of single cigarettes known on the street as loosies.

"When our people are in a store and they find unstamped cigarettes, we can share that data with police, so they can check that area for loosies, because more likely than not, if the store is selling unstamped, loosies are somewhere in the neighborhood too," she added.

Krimbel responded to aldermen who reiterated concerns about the effects of the mayor's proposed cigarette tax increase during 2014 budget hearings. Emanuel's increase would put the overall tax on a pack of cigarettes in Chicago at $7.42, the highest in the nation.

Many aldermen believe that would lead to more black-market sales and send smokers across city borders to find cheaper smokes in the suburbs or Indiana. The stepped-up enforcement announcement came just two days after the city's top health official said the tax hike would reduce and prevent smoking.

Ald. Roberto Maldonado, 26th, said it's going to be more tempting than ever to sell unstamped and loose cigarettes. The latter, aldermen say, creates illegal street activity.

"It has become so lucrative, and that's why it's so pervasive," Maldonado said. "I've been informed that now loose cigarettes are being sold for $1. That's a lot of dough, and it's very tempting for any one of these unscrupulous operators to do it."

Krimbel maintained there has been no recent correlation between cigarette tax increases and increased black-market sales.

"If people are going to sell unstamped cigarettes, they are going to sell unstamped cigarettes," Krimbel said. "They don't really care what the tax is because they're not paying it."

Although many aldermen have expressed reservations about increasing the cigarette tax, Budget Committee Chairman Carrie Austin, 34th, said she believes there are enough votes to pass it. Nevertheless, she, too, has reservations and said she would rather see another way to raise the $10 million the tax increase is expected to generate.

With some level of increased enforcement in partnership with Cook County authorities already underway, 1,280 citations have been issued since April 2012. The fines for selling unstamped cigarettes are $1,000 for the first 40 packs and $40 for each pack above that number.

Police, meanwhile, have arrested 781 people for selling loosies and issued 490 citations so far this year at $1,000 a pop.

Krimbel also dismissed concerns expressed by some aldermen, including Budget Committee Vice Chairman Brendan Reilly, 42nd, about a cut in the break given to cable TV companies on the amusement tax. The change would increase cable taxes by 2 percentage points.

hdardick@tribune.com

Twitter @ReporterHal

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