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Stop the pay raise/cigarette tax shell game

It’s truly dangerous when government thinks it’s going to have “excess” revenues and wonders how it is going to spend them. This topic has emerged in light of estimates that the now $1 a pack cigarette tax increase is wending its way through the Louisiana House would generate much more money than Gov. Kathleen Blanco’s goal of giving public school employees and college faculty members raises would require.

Of course, counting chickens before they hatch is a long-standing tradition in Louisiana fiscal policy so these estimates may be very off (as well as a history of taking revenues from one thing and using them to fund another different, especially with tobacco). They certainly will be somewhat off (wasn’t the 1998 Tobacco Settlement supposed to solve educational under-funding?) because a tax increase of that magnitude will cause some people finally to quit smoking (at least people will feel better about hanging around most public buildings in Shreveport). Still, there could be some revenue generated above and beyond funding this salary increase.

Blanco has made noises that surplus funds would go to health care. In essence, this admits the hypocrisy of the whole exercise: if you are taxing an activity because it is supposedly bad partly to discourage the behavior, the revenues generated should go to addressing the problems created by the behavior. As the behavior declines because of the tax, the problem becomes smaller, but so do the revenues to handle the reduced problem. You don’t link the revenues to something totally unconnected to it because then the problem doesn’t get addressed and the revenue stream, with no relationship to the issue to which it is linked, is unreliable to fund the other issue.

The whole strategy has been to find something unpopular engaged in by only a minority of the population, and to suck money out of that group because it is the kind of tax increase the least resisted by the majority and it is tied into a popular but wholly unrelated area. If increased educational salaries were really a state priority, it would be taken care of already by cutting spending in presumably less-important areas (maybe even in health care through more efficient use of resources.) In short, it is nothing but a shell game.

Were there any real rationality to all of this Blanco would reverse her case – she would clamor for the tax increase as a way pump additional funds into state health care expenditures, and then fund raises only after health care needs are met. This tax’s proceeds could be made to flow into a dedicated fund whose revenues only went into health care. Then an amount of money now coming from the general fund into health care could be redirected to these raises.

This kind of arrangement would out logic into the process and take hypocrisy out of it. If Louisianans are going to get hit with a tax increase which, frankly, is unjustified until greater efficiency measures first are introduced into state government and policy, at least have one which serves a real need and encourages the state to adopt a saner set of priorities.

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