Barbara Roberts on the Healthy Kids Plan
Barbara Roberts, Oregon's former governor, published an op-ed in the Oregonian yesterday.
Oregon is the only state in the nation in the last 10 years to lower its cigarette tax. It's now time for Oregon to raise that tax.Gov. Ted Kulongoski has proposed to do just that and to spend the money on important tobacco prevention and education efforts and vital services for our children. Now that the governor has taken the lead, our legislators should make it a priority during this session to pass legislation that will help create a healthier Oregon.
Some critics argue that relying on the tobacco tax creates an unstable funding source that, if successful, would cause smoking rates to drop, and thus funding to drop.
Governor Roberts points out, though, that state costs would drop as well - if smoking rates dropped:
Tobacco use is still the No. 1 preventable cause of death in Oregon. Nearly 40 percent of the patients on the Oregon Health Plan are smokers, costing taxpayers approximately $260 million in 2002 alone and creating huge health problems and thousands of deaths. When the price of tobacco goes up, it encourages adults to smoke less, reducing the rate of tobacco-related illness and saving money for the Oregon Health Plan. It also makes tobacco less affordable for children.
Of course, part of the tax-tobacco-and-fund-health-care plan is to restore the will of Oregon voters:
That's exactly why voters in 1996 approved Measure 44, which increased the tobacco tax and launched prevention efforts in Oregon, which have been on a roller-coaster ride ever since. ... Kulongoski's proposed budget expands funding to the prevention and education program to $34 million per biennium. These services would be paid for by restoring voter-approved Measure 44 funds and by raising Oregon's cigarette tax by 84.5 cents a pack, as well as increasing taxes on other tobacco products.
Read the rest. Discuss.
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Feb. 09, 2007
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connect with blueoregon
Feb 9, '07
Where are the facts that justify her reasoning? Unless its kids that are smoking, I don't see how all of this is connected. Okay, so raising the cigarette tax may cause people to smoke less, thus it will reduce secondhand smoke which will in turn help children with respiratory problems. However, kids being kids, what about all of the other childhood issues out there? Are we now going to tax fast food for causing childhood obesity? I don't believe that this is the answer to funding health care if that's what everbody wants. The "sin" taxes are only a drop in the bucket and should not be used as a crutch. Just another proposal from the lady who brought you the Deparment of Administrative Services-The largest waste of time and money the state has.
9:47 a.m.
Feb 9, '07
The facts are that each pack of cigarettes smoked by Oregonians costs $2.90 in public health care costs, uncovered by insurance. Thus we are losing a dollar or more per pack.
It's connected because the money needed to cover that $2.90 would come from the same pool as money needed to cover uninsured children. It's not a crutch; it's simple cost recovery.
Feb 9, '07
Just another proposal from the lady who brought you the Deparment of Administrative Services-The largest waste of time and money the state has.
Where are the facts that justify [your] reasoning?
Feb 9, '07
Joe, I've mentioned this here before, but your 2.90 figure is misleading. The true cost of society of a pack of cigarettes is closer to $0.45. While you may be correct that there is a $2.90 cost to the healthplan per pack of cigarettes sold, smokers tend to die sooner than non-somkers, and therefore we save on social security and pension plans, etc. This is a rather morbid way of looking at things, but when your trying to justify public policy on these sorts of grounds, you it must be taken into account.
Also, I know this has been said to the point of it being almost cliche, but what about obese Oregonians on the healthplan? Is their condition not equally preventable? (The answer is a resounding yes). What about alcoholics (or people who just drink more than they should)? Furthermore, how many smokers are also obese, drink too much, or have other conditions that could exascerbate a disease brought on as a result of smoking. That is to say, how can we really seperate out these costs? We can't.
A little self-promotion here, I wrote a report on the problems with Oregon's cigarette taxes back in 2005 (published last summer), and if you're interested, I invite you to read it.
http://www.cascadepolicy.org/pdf/fiscal/20060822_tobacco_revenues_prove_addictive.pdf
Here's the point. A smoker no more obligation to a sick child than you or I. If the state is going to create a Healthy Kids Plan, it should at the very least be funded equitably.
Feb 9, '07
Sorry, the link didn't show up right. Here is a shorter one that takes you to the same page.
http://www.cascadepolicy.org/?p=222
Feb 9, '07
Bruce,
Can we realistically look forward to a bill sponsored by Cascade promoting combined taxes on alcohol, junkfood and cigarettes together?
Will you do the hard political work to make it pass?
How successful do you think you'll be taking on 3 entrenched commercial interests at the same time?
If the prospects are limited, then consequences of not supporting a tax on cigarettes are worse than supporting the tax. It's not totally fair to low income folks who smoke, but this could be corrected by income support, earned income taxes etc ...
12:35 p.m.
Feb 9, '07
Bruce said: "Joe, I've mentioned this here before, but your 2.90 figure is misleading. The true cost of society of a pack of cigarettes is closer to $0.45. While you may be correct that there is a $2.90 cost to the healthplan per pack of cigarettes sold, smokers tend to die sooner than non-somkers, and therefore we save on social security and pension plans, etc. This is a rather morbid way of looking at things, but when your trying to justify public policy on these sorts of grounds, you it must be taken into account."
Oregon doesn't pay into Social Security; the employee and employers do. Pension dollars are not usable to pay for healthcare, so there's no savings to the health care "accounts" if they die earlier. Further, because they die sooner they also stop working sooner, and miss more days while they are working--more than balancing out any "savings" on retirement payouts. We get less productivity out of smokers. In any case, you could spend all day going through the various positive and negative financial permutations--but we're talking about smoking's impact on our health care dollars.
Obesity has nowhere near the direct health-effects causality that smoking does. For one thing, emerging evidence suggests that sedentarism is more closely linked than simple obesity. Furthermore, no one ever died of secondhand obesity (except people who were fallen on and crushed or suffocated, I guess). In addition, there is no one product or group of products that are directly attributable to obesity, save (it appears from recent research) sugared sodas.
To address some other points from your paper:
*tobacco taxes are not regressive, because they are not tied to income in any way. That the burden falls more heavily on lower income groups by nature of who smokes more often, is the choice of smokers, not government. The tax has nothing to do with income; if Joe Smoker won the lottery tomorrow, he'd pay exactly the same tax on a pack as he did the day before he won.
*I do agree that funding items beyond smoking education or health care programs with tobacco taxes is problematic. Of course, this particular proposal devotes 100% of the money to those areas.
*I think it's disingenuous to argue in one section that tax increases don't decrease smoking rates appreciably--and then argue in another that tax increases threaten to cut smoking to the point where revenue is threatened. Only one can be true at any given time.
That said, always nice to banter with a fellow William and Mary alum ('89, '90)!
Feb 9, '07
The proposed tobacco tax is regressive in that it is a fixed tax. Smokers are addicted, unable to reduce their dosage appreciably in response to financial strictures, and your fictional lottery-winning smoker would not likely increase consumption appreciably. The effective regression of the tax burden is the much larger portion of a low-income smoker's budget devoted to their habit.
Please let's not ignore the history of the aggressive marketing by the tobacco corporations for generations, the effect of which was not magically dispelled when they were belatedly forced to reveal their own research which had shown the health risks of their product. Wasn't it Ronald Ray-gun who touted the throat-soothing medicinal properties of his cigarettes? I'd venture to say that there are other myths he promoted that have not yet faded away either!
Feb 9, '07
I call Bullshit on all the tortured reasoning to tax smokers for kids. You'll do it because you CAN.
This is a tax that you can get passed, you can smack a despised minority and get away with it. But, please, knock off the self-serving crap, you know perfectly well that all this hooey applies to a lot of other things that you can't get it passed on.
Feb 9, '07
I'd still much rather see someone come out in favor of tax fairness rather than tax increases. There's a boatload of money out there if we would just clean up the tax code by eliminating exemptions, credits, etc. As an added bonus, we could certainly lower rates and still collect more revenue. And, tax fairness is much easier to market because most people's taxes would go down or stay the same.
Feb 11, '07
Joe, I see your point about how the Oregon Health Plan doesn't necessariy reap the benefits of a smoker's early death. I stand by my assertion that the cost to society of a pack of cigarettes is considerably less than $2.90, but understand that that doesn't help a state program if the gains are realized at federal and private levels.
As to obesity, I would venture the guess that obesity and sedentarism are highly correlated, and heart disease (which IS linked heavily to obesity/sedentarism)is still the #1 killer in America last I heard. While there may not be a single product group directly related to obesity, I don't think it's ok for the state to place a fiscal burden on one group of people just because their vice (or addiction or whathaveyou) is more easily taxed.
Tobacco taxes are regressive. It may not be intentional, but the fact of the matter is that when the state raises tobacco taxes, the burden falls most heavily on the poor. Just because a tax isn't directly tied to income doesn't mean it can't become regressive.
We agree that it isn't right for Oregon to use tobacco taxes to fund anything other than smoking cessation programs and healthcare. So instead of raising cigarette taxes, why don't we start by reallocating the money the state is already taking in that is not devoted to either of these programs (roughly 25% of tobacco taxes, or ~$54 million in 2005)? There's even more if you take the tobacco settlement paymetns into account.
To reply to your last comment, I think you may have misunderstood the point I was trying to make. I wasn't saying that the increases threatened to cut smoking, but rather that the state has a moral hazard on its hands. Oregon has financed bonds (I believe they were 40 year bonds, but if I'm mistaken I apologize)) with money from the settlement with Big Tobacco (which now makes yearly payments to the state). The problem is that these payments are tied to the revenues Big Tobacco recieves. If people quit smoking, these payments get smaller, and if smoking were to be abolished altogether, they would stop coming (or so is my understanding). That would put Oregon (a state that often has trouble making ends meet) in a tight fiscal spot. Where would the money come from to pay off that debt? The point is that I'm not so much concerned that revenues will be damaged by further tax increases, but that the state has an incentive (I would go so far as to say a strong incentive) NOT to try and get people to quit smoking. This may sound a little far fetched, but look at how much the state rakes in every year in tobacco taxes and settlement payments (a lot) and look at how much of it goes to smoking prevention (~1/7th of the CDC recommended minimum, almost nothing).
To continue that line of reasoning, what would happen to the children being helped by the Healthy Kids Initiative if smoking rates were to begin to decline (not necessarily because of the tax increase, but rather because over time people finally get the picture that smoking is really really bad for them)?
On a more personal note, its great to meet another W&M alum! (I guess I can't call myself an alum just yet, I still have to wait another 3 months) You would not believe how many Oregonians I meet back here. In my fraternity alone there are two of us, and two of my brothers are dating girls from Oregon.