Park Ridge, Niles tobacco sellers feeling burned by cigarette tax hike
Al Shah, owner of Around the World Cigars and Gifts in Park Ridge, is one local business owner unhappy about an increased state tax on cigarettes and cigars. | Jennifer Johnson~Sun-Times Media
Updated: July 29, 2012 4:39PM
An additional $1 tax on a pack of cigarettes that went into effect this week is — not surprisingly — generating concerns among local business owners that their livelihood could be going up in smoke.
“It definitely affects the business and it definitely affects the consumer,” said Al Shah, owner of Around the World Cigars and Gifts in Uptown Park Ridge.
The state tax hike, which will raise the price of some packs of cigarettes to nearly $10 — and others to more than $13 — has turned tobacco into a “luxury item,” Shah said.
“Where is the freedom of America?” he asked.
The tax increase, which went in effect June 25, was part of a package supported by Gov. Pat Quinn to fill a $2.7 billion deficit in the state’s health-care program for the poor, elderly and disabled. The $1 added tax sets the total state tax on cigarettes at $1.98 per pack.
“Raising the price of cigarettes is not only good fiscal policy, but good health policy,” Quinn said in a June 14 legislative message. “This legislation will help an estimated 60,000 people quit smoking, reduce Medicaid costs from smoking-related conditions and raise $700 million in revenue for Medicaid programs.”
In addition to cigarettes the tax on “little cigars” will increase from 18 percent to 36 percent of the product’s price.
The increase comes on the heels of a hike in the Cook County tax on cigars.
For Shah, who has been in business for 15 years in Park Ridge, the higher costs of tobacco products angers customers and takes business out of Cook County.
“Why can’t they go after the Internet?” he said of state legislators. “They can raise a lot of revenue (from Internet sales-tax) instead of going to the small businesses.”
Ken Marchetti, who visited Around the World’s cigar lounge last week, called the tax hikes “silly.”
“They need to reduce expenses and not add taxes to everything,” he said of state lawmakers. “At the end of the day, if they didn’t spend so much money they wouldn’t have to raise so much money.”
Joe Debaz, owner of the Marathon gas station at 525 W. Talcott Road, said the state’s last tax increase on cigarettes curbed sales and sent many customers to other counties where the total tax rate is lower.
“There’s nothing we can do,” he said. “That’s a lot of taxes on it.”
Danny Debaz, who also works at the station, said customers used to buy multiple packs of cigarettes at a time.
“Now they just get one,” he said.
In neighboring Niles, Howard Geiderman, owner of Old Chicago Tobacco and Liquor, expects the village’s tax revenue to be impacted if sales diminish.
“I expect it to be very negative for the sale of cigarettes,” Geiderman said. “It’ll be a tax at the expense of the village of Niles.”
Though high-priced luxury retail items — and some necessities — are often the target of thieves, Park Ridge Deputy Police Chief Lou Jogmen doesn’t believe rising cigarette costs will necessarily lead to more thefts and robberies in the city. The primary reason is that cigarettes are “fairly well guarded and protected” behind counters.
“That factor alone will probably preclude people from having immediate access,” he said.
— Tracy Gruen and Sun-Times Media contributed to this story.