Midwestern States to Illinois: Please Pass Quinn‘s Damaging Tax Hike!

Dear Legislator:

Your neighbors in Indiana, Iowa, Kentucky, Missouri, and Wisconsin heartily encourage you to pass Governor Quinn’s latest destructive tax hike proposal and stay firmly on a path towards fiscal catastrophe. Though Illinoisans have suffered greatly, nearby states have benefited tremendously from the state's inability to restrain wasteful spending and prevent higher tax burdens as residents and businesses have fled over the borders. Prompt passage of a $1 per pack increase in the cigarette tax, more than doubling the current rate, would only accelerate that trend. However, the National Taxpayers Union (NTU) and our 14,000 members in Illinois remind you that it is never too late to change course to reject tax hikes and reform your budget!

The General Assembly need not look far to understand the positive influence Illinois’ crushing tax burden can have on the economies of nearby states. Last year, after Illinois passed a multi-billion dollar personal and corporate income tax hike, neighboring states reaped the rewards of an influx of former Illinois residents. Modern Drop Forge, an automotive parts manufacturer, left Blue Island, Illinois for Merrillville, Indiana, taking with it 240 jobs and $7 million in investment. Railroad operator CN made the short move from Chicago to Gary, Indiana. After Illinois’ foolish attempt at an “affiliate nexus” Internet sales tax scheme, FatWallet.com packed up its operation and moved to the friendlier confines of Beloit, Wisconsin.

All told, according to the Illinois Policy Institute, the Land of Lincoln lost 89,000 jobs between January 2011 and July 2011, much of it to neighboring states. In fact, according to the American Legislative Exchange Council’s Rich States, Poor States, between 2001 and 2010 over 620,000 Illinoisans left the state to live, work, and pay taxes elsewhere. Without your destructive work none of this would have been possible, so your Midwestern neighbors thank you.

Gas station and convenience store owners on the other side of Illinois’ long borders will be particularly pleased to see this punitive tax hike pass, as tobacco products account for $1 of every $3 of their revenue. When Cook County doubled its cigarette tax in 2006, one station in Riverside saw cigarette sales plummet from 110,000 packs per month, to just 17,000, as many of its consumers went elsewhere to make their purchases. A 102 percent increase in Illinois’ cigarette tax combined with the nation’s 4th-highest gas tax could yield a sales bonanza for businesses in nearby jurisdictions.

In these uncertain economic times, Illinois remains the best neighbor a state could wish for. Your continued efforts to extract every last penny from your constituents in order to avoid honest reform of unsustainable spending schemes has been key to your neighbors’ recovery from the recession.

Instead of continuing this fruitless trend and driving out even more Illinois citizens who will help pay for Wisconsin schools, Missouri roads, and Indiana infrastructure, perhaps it is time to change course and avoid a punitive tobacco tax increase right on the heels of last year’s massive income tax hike. Your neighbors have benefited enough from your fiscal mismanagement. Say no to Governor Quinn’s latest destructive policy proposal.    


Brent Mead
State Government Affairs Manager