The House and Senate have now passed a cigarette tax increase to help fill a gaping Medicaid budget hole, and the governor has indicated he’ll sign it quickly. The dollar-per-pack increase will apply to cigarettes and a few other smoking devices, but not chewing tobacco or “moist snuff”.
It’s expected to bring in $350 million which the feds will match dollar for dollar. It also changes hospital assessments statewide, which will bring in 50 million matchable dollars. The state’s looking to give hospitals a break on their property taxes through a separate bill, with tax breaks coming to those who provide a certain amount of charity care to the poor.
Proponents of that bill, which also passed the Senate Thursday, say tax breaks will still be provided, but hospitals will “have to earn them” by proving they provide a certain level of care. Some see this as an appeasement due to hospitals’ increased costs from the assessment changes. S.B. 2141 passed the Senate with 31 votes in the affirmative – a simple majority, 30, is required to pass a bill.
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The $800 million, combined with the $1.6 billion in cuts lawmakers approved last week, bring the total Medicaid savings to $2.4 billion. The remaining balance will be filled through $150 million in unexpected general revenue. That money, as it’s being used to pay old Medicaid bills, will be matched by the feds – bringing the total to $300 million.
Gov. Pat Quinn late Tuesday applauded both chambers through a written statement. “We need to take decisive action to protect Illinois’ Medicaid system from collapse,” said Quinn. “The cigarette tax is not just good fiscal policy, but good health policy. Adding a dollar per pack will help 60,000 people quit smoking, prevent 60,000 deaths from smoking-related conditions and keep 80,000 kids from taking up smoking in the first place.”