Stronger Cigarette Tax = Healthier Louisiana

Louisiana has the 3rd lowest cigarette tax in the nation. But while smoking is cheap, the costs are high.  According to a new report from the Louisiana Budget Project, smoking in Louisiana costs taxpayers nearly $700 million annually. That comes to $403 for every household in the state – money that is not nearly recouped through the current tax. And that is likely a conservative estimate.

Raising the cigarette tax by $1.25-per-pack would raise $230 million that could be used to stave off state budget cuts. More importantly, it would help encourage 46,000 adults to quit smoking and keep 36,700 teenagers from taking up the habit. That would lead to $1.57 billion in long-term health care savings, including more than $500 million for Medicaid.

Nationally, the average cigarette tax is $1.54 a pack. While some policymakers may be tempted to pass a much smaller tax to simply raise revenue, this would be a lost opportunity to improve public health. A $1.25-per-pack increase is the way to both create health care savings and save thousands of lives in the long-run in addition to helping the state budget now.

Tax drama goes on

The tension between Gov. Bobby Jindal’s insistence on hewing to a Washington lobbyist’s cramped view of what constitutes a tax increase and the desire for legislators back home to find pragmatic solutions to Louisiana’s $1.6 billion deficit is spilling into the national media. As Tyler Bridges reports in the Washington Post:

Jindal’s solution: eliminating $526 million in tax rebates, most notably for the state’s business inventory tax. Norquist’s group blessed the decision, concluding that ending tax rebates would not amount to a tax increase…But that distinction has prompted ridicule from state lawmakers and political commentators on both the right and the left, who accuse Jindal of selling out the state’s tax policy to Norquist.

As is well known back home, the repeal of the Stelly Plan in 2007 and 2008 coupled with years of a cuts-only approach to deficits, has lead to the deepest cuts to higher education of any state in the nation. Stephanie Grace, writing in the Advocate, suggests that the governor’s lack of a detailed plan to balance the budget gives legislators the chance to craft their own solution: “…many lawmakers I know have long bristled at the suggestion that they’re overly deferential to the administration. They’re about to get a chance to prove otherwise.”

Medicaid expansion improving diabetes care

Citizens of states that expanded health coverage last year were more likely to have diabetes diagnosed earlier, when preventive treatment can really make a difference, than people in states like Louisiana that have rejected expanding health insurance. Bruce Alpert with Nola.com reports:

“The seminal study demonstrates that the Affordable Care Act promotes earlier diagnosis of one of the most prevalent and treatable chronic health conditions in the United States,” said the study’s co-investigator Vivian Fonseca, a professor of medicine at Tulane University School of Medicine. “But these benefits were not shared equally across states. This study demonstrates the need for additional debate on the merits of health care reform to promote equal access to health services.” According to the report, undetected and untreated diabetes typically worsens causing heart disease, blindness, kidney failure or death.

Where to cut?

The second part of the Louisiana Survey, conducted by LSU’s Public Policy Research Lab, was released Tuesday. As the Advocate’s Mark Ballard reports, the survey results may put legislators in a bit of bind as they try to piece together a budget this year:

Roughly eight of every 10 Louisiana residents would cut government spending – but not to education or healthcare or highways – to fix the $1.6 billion shortage in revenues. Eighty-five percent of those surveyed also would accept some tax increases, of which more than half would want that mix to favor mostly cuts. But the respondents voiced little support for raising most specific taxes. The tax increases with the most support are for tobacco, alcohol and gambling…But when was asked by LSU pollsters, the public wanted more spending – not less – in areas such as elementary and secondary education, higher education, transportation, and health care…

Number of the Day

$696 million – The annual cost of smoking in Louisiana borne by taxpayers, which comes to $403 for every household in the state (Source: LBP)