1/24/2007
$1.25/pack - NO, NO, NO, and NO
Here we go again. Another source of revenue to spend on more state programs. And all feel-good (yes, and some really good) programs to boot. Dang it.
Today Governor Doyle will formally propose an increase of $1.25 in the cigarette tax, bringing it to $2.02 per pack.
So far I'm hearing all sorts of ways these new tax $'s are going to be spent.
Governor Doyle's hand-picked Healthy Wisconsin Council, recommending "only" a $1/pack increase, has suggested this windfall of tax money (projected to be about $235M the first year, dropping below $200M in succeeding years) be spent to:
- Create a Healthy Wisconsin Authority to provide subsidized reinsurance to reduce the cost of health care insurance.for small businesses.
- Expand Medicaid to cover childless uninsured adults under 200% of the federal poverty level
And the anti-smoking crowd is salivating because higher cigarette costs will reduce teen smoking by 16.7%. Important, yes.
But here's the problem. Once you start raising money, it's 100% fungible - it can (and does) go anywhere any Governor wants to spend it. Case in point - the Transportation Fund, which was raided for school spending via the Frankenstein Veto (more about that another day).
Do you remember the list we featured back in December that showed the dollars transferred to the General Fund in the last budget - from funds dedicated to other purposes?
Transportation $338,449,000
Environmental 4,200,000
Recycling 19,143,000
Utility Public Benefit 18,185,000
Petroleum Inspection 10,861,000
Technology Services 7,927,000
Facilities Op's & Maint. 5,904,000
Badger State Industries 1,316,000
$405,984,000
State Representative Kitty Rhoades (R-Hudson) objected to a $1/pack tax grab in a December, 2006 lunch presentation at which she was joined by fellow Joint Finance Committee Co-Chair Senator Russ Decker (D-Schofield). Ms. Rhodes said something to the effect that she would need to see an absolute iron-clad, leak-proof, solid steel wall around any huge tax increase, that would prevent its leaking to additional spending somewhere, someday, somehow. (And she certainly didn't see that iron-clad barrier in the last budget.)
On the other hand, Senator Decker said "I think it's just good budgeting to transfer excess funds to the General Fund." Not a good sign.
How do we compare? At the current tax/pack rate of $.77, Wisconsin is 30th highest among the states and the District of Columbia. The median rate is $.84. At $2.02/pack, Wisconsin's tax would be the 4th highest, topped only by Rhode Island ($2.46), New Jersey ($2.40), and the state of Washington ($2.03). The list below shows that surrounding states, where folks could easily travel to buy their supply of smokes, tax cigarettes at much lower rates. (See chart of tax rates.)
Wisconsin 2.020
Minnesota 1.485
Iowa 0.360
Illinois 0.980
An oxymoronic feel-good tax. Dang it.
COMMENTS
Travel to Illinois and Iowa to buy cigarettes will happen. Some of us older folks rememeber people traveling out of state to buy margarine.
Dale (Wed Jan 24 07:40:54 2007)
You bet some of us remember "oleo runs."
And you bet I'll do it again -- or just move, and that's saying something for this lifelong Wisconsinite. But I'm just sick of the hypocrisy here on so many issues, including this one. The secondhand effects of alcoholism on all of us are far more costly in this seriously alcoholic state -- drunk drivers, crime, health care costs, etc. And we don't even have major breweries here anymore to offset the costs with their property taxes. But our posturing politicians, claiming to care about our health, won't even consider raising liquor taxes for the first time in eons, during the time that they already have raised cigarette taxes seven times and propose to do so again. I will be watching, I will take names, I will remember each and every one of them when they want my money and my vote -- and I will now seriously consider moving from my home state, at last. It's making me sick, and not from smoke.
Anon (Wed Jan 24 13:47:15 2007)
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