To Be Announced...

The on-again debate is off-again for a little bit...

Iowa cigarette tax debate now on hold

Big news this morning that today would be the day we'd get a debate on raising the cigarette tax. But now it's temporarily delayed until tonight. Nevertheless...

The bill would raise the tax from the current 36 cents per pack to $1.36 this spring while also increasing the state tax on other tobacco products. The Democratic-authored measure would pump an estimated $127.6 million raised by the increase into a trust fund for health care programs.

Supporters argue the money will help cover the cost that smoking-related illnesses inflict in state health programs.

“All the money raised by this tax will go to health care,” said Sen. Matt McCoy, D-Des Moines, during opening remarks on the bill this morning.

Really? ALL of it? I find that hard to believe given past experience. I laugh every time I hear the words "trust fund" to describe these things. There's no more trust in a government Trust Fund than in your average street panhandler's sign "will work for food." (See below)

While I have no problem with raising the taxes to make people quit, I don't like how it is tied to health care related expenses. It's an impossibility to specifically target a tax increase for any particular cause. It first must go into the general fund...then dispensed from there. It's not like their marking bills with invisible dye or anything.

But even in the story from the QC Times, there's a contradiction.

"Supporters argue the money will HELP cover the cost..."
McCoy: "ALL the money...will go to health care"

Help cover is different than ACTUALLY covering the costs. And I don't buy the fact it will ALL go to health care. When Attorney General Tom Miller announced the original settlement with tobacco companies (links to original press release):

I believe that the funds provided in this agreement should go primarily for various health purposes, ranging from specific education efforts to prevent tobacco use and addiction, to providing smoking cessation programs and health care for uninsured children in our state.

According to the Public Interest Institute at Iowa Wesleyan (PDF) in Mount Pleasant,

Annually Iowa generates $143.5 million from tobacco settlement payments and tobacco taxes, yet is spending just 3.6 percent of that revenue on tobacco prevention. Funding for prevention has also decreased since 2001. In FY 2001 Iowa spent $9.4 million (6.2 percent of tobacco revenue) on tobacco prevention programs, and has committed just $5.1 million (3.6 percent of tobacco revenue) for FY 2005.

We still have shortfalls in state run health care programs...and according to that same report, the tobacco companies spend 30-times the amount marketing themselves than Iowa does on cessation programs.

Still...if the goal is to raise the tax high enough to get people to quit...fine. But if $1 dollar is going to get "X" number of people to quit...why not raise it $2 or $3 dollars to get everyone to quit. Why not ban it?

And when everyone quits...THEN what will we do to "help cover health care" costs?

Just like establishing the lottery was to fund education in the state back in the 80's...this is just another ruse to get you to sign on to more taxes. Because there's more spendin' they want to do...

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Labels: tobacco