More Taxing News for Tobacco

SPRINGFIELD, Ill. -- Illinois lawmakers sent a tax package to Gov. George Ryan yesterday that includes a cigarette tax increase of 40 cents a pack.

Ryan, who supports the cigarette tax hike, could sign the bill into law by the end of the week, according to the Chicago Sun-Times.

The cigarette increase would bring the total tax to 98 cents a pack, one of the highest in the nation. The tax increase is opposed by retailers and tobacco companies, who fear it would drive some smokers across the border to states with cheaper cigarettes or to alternative outlets, such as Native American smoke shops or the Internet.

Illinois lawmakers also approved a tax hike on the state's gaming business and authorized the borrowing of up to $750 million against future proceeds from the state's tobacco lawsuit settlement. The moves are all part of a plan to fill a $750-million gap in the state's $53 billion budget.