Tobacco tax hike remains disingenuously political

No doubt she gave it her best shot, which was pretty good in that she got a party-line vote to go in her favor, but despite that all of the conceptual and political flaws behind HB 889 by Rep. Karen Peterson still reveals it to be more about trying to score political points than any serious, workable measure addressing the state’s fiscal structure or health care issues.

The bill would take tax increases levied on tobacco and dedicate them to a number of purposes dealing with the health care area – a tax increase Gov. Bobby Jindal said he would veto and one which looks shaky to get the two-thirds vote each in chamber (or to override his veto) in any event. It is a scaled-down version of even higher taxes proposed in her HB 75 which was defeated in the House Ways and Means Committee, and reworked to avoid certain criticisms.

One was in the amount on cigarettes which was argued to cause business around the states’ border to flee to those surrounding states with lower taxes, thus largely negating the impact. Thus, the new cigarette tax was cut in half to 50 cents a pack to make the new total 86 cents a pack. Also, the money was not specifically dedicated to health care expenditures, so in the bill four different kinds of entities – providers, clinics, researchers, and treatment entities – were specified to receive the funds with half going to general providers of health care services. This was to counter the argument that it is unwise policy to base a tax on an activity for which the tax actually tries to discourage, because it creates an unstable funding mechanism and to some degree is hypocritical and there for only revenue-generating reasons, because if government truly wants to discourage this it would restrict or ban the practice.

None of this changed Jindal’s mind which means pursuit of the bill is pointless given existing political dynamics. As a demonstration of his influence, the bill’s consideration was delayed almost a month which means any further delay will kill it given the approaching end of the session. And, if the content and debate of and vote concerning the bill in committee are indicators, continued public pursuit of it by Carter will be primarily for political reasons.

Note that elements of hypocrisy, although reduced from the other bill, still hung over the original bill. For one thing, the half of the dedications that went to activities that could be related to smoking prevention/cessation and diseases from it was ill-defined in direction, specified to certain agencies but not activities. However, state Rep. Mike Danahay called the bill on that (graciously accepted by Peterson), getting amendments that specified the money had to go to activities dealing with prevention, cessation, and/or research. While that helps make for a more honest bill, it still isn’t quite so on this measure. This is because cost-shifting still could occur. For example, money that would go for prevention can supplant funds formerly used for that purpose, which then could be shifted to other agency purposes and then the money that formerly funded these could be shifted outside of the agency for any purpose in state government. So Peterson or any other supporter of the bill is being dishonest if they assert the new monies raised by it “only” would go to health care-related items.

The other hypocritical aspect is the other 50 percent, which goes to “funding to the Department of Health and Hospitals for payments to providers in the state Medicaid program, specifically for increases in provider rates.” This has little to do with smoking unless one could argue that smoking-related ailments would cause an increase in the total amount paid to providers to be offset by the new revenue. But the bill does not do that, it addresses not serving more people more often, but rather increasing the per person, per event payment, so it does not expand coverage to address smoking’s consequences in any way. Further, the dirty secret concerning the effects associated with smoking is that it actually decreases the health care costs of government because studies show the costs of treating people with smoking ailments typically are lower because, frankly, they die faster than non-smokers whose longer lives rack up in the aggregate greater health costs to government. In respect to this half of the new revenue, there’s no moral justification at all: it simply proposes that state government raise revenue off the self-destructive behavior of some individuals.

To some degree understanding of these flaws was demonstrated in the committee vote. All Democrats present voted for it; all Republicans except two (who had been no-shows a month earlier, denying the committee a quorum and causing the delay) and independents voted against it except Chairman Hunter Greene who followed the tradition of chairman usually not voting. With eight of each party and both independents on the committee, and with two Democrats absent, the amended bill therefore passed 8-7. Opponents seemed to recognize that, no matter how many promises were made in the bill, it represented a tax increase that would allow monies to be spent on activities that had nothing to do with extra money going to ameliorating and dealing with the debilitating effects of smoking.

If in the entire House Republicans maintain the same degree of party loyalty as in committee, the bill cannot succeed given the supermajority requirement. Given a small victory, Peterson has the obligation to try to change enough minds to win the next step, but if that’s not forthcoming, greater public efforts on her part will demonstrate little more than trying to score political points, generally to make opponents look like they are “against” health care particularly for the indigent, and specifically if it can get that far to try to make Jindal look that way by forcing him to use a veto. The latter would serve the larger purpose of Democrats, of which Peterson is a party leader, to sully Jindal’s electoral future.

Despite claims the bill is about health care, it disingenuously is more about revenues and thereby lacks justification to become law. Therefore, its continued life suggests it is more than justified primarily as a political tool.