A number of anti-smoking and health groups, including the national Campaign for Tobacco-Free Kids and several Minnesota state organizations, yesterday issued a press release and launched a series of advertisements urging the state legislature to solve the state's budget woes by instituting a 75 cent per pack increase in the state's cigarette tax.
According to the press release: "Several of the state's leading health advocacy organizations today launched a statewide advertising campaign to emphasize the health benefits of the 75-cent tobacco price increase. The radio and newspaper ads highlight the impact that higher tobacco prices have on preventing kids from smoking and helping more people quit smoking. The advertisements are sponsored by Blue Cross and Blue Shield of Minnesota, the American Cancer Society, American Lung Association of Minnesota, American Heart Association, Minnesota Medical Association, AARP, Campaign for Tobacco-Free Kids and the Minnesota Smoke Free Coalition."
The Minnesota legislature is currently considering how to handle a significant budget crisis. Last July, the legislature enacted a 75 cent per pack "health impact fee" on cigarettes, which was intended to "recover for the state health costs related to or caused by tobacco use." The "fee" was not considered to be a "tax" because the Governor had pledged not to raise any taxes. In order to make the measure politically palatable given his pledge, the measure was framed as an impact fee designed simply to recover health care expenditures caused by smoking.
However, in December, a Ramsey County judge struck down the health impact fee as being a violation of the state's settlement of its litigation against the tobacco companies, which "barred the state from seeking additional money from the firms to pay for health care costs related to smoking."
Although the state has appealed this decision to the state Supreme Court, the legislature is right now considering whether to simply enact the 75 cent per pack "fee" as a plain old cigarette tax instead, which would easily pass legal muster, as the tobacco settlement does not dictate how the state can set its taxes. The advertisements by the health groups are apparently timed to coincide with the legislature's consideration of this possible cigarette tax increase.
Without the cigarette tax, the state is poised to lose $185 million in annual revenue, necessary to balance its budget and provide necessary state services and programs. The "health impact fee" was enacted by the legislature specifically to balance the budget and avoid a government shutdown.
Ironically, the Governor, who was the chief impetus behind the "health impact fee," now opposes the cigarette tax proposal.
The Rest of the Story
It is quite clear that the purpose of the cigarette health impact fee or tax or whatever you want to call it is not to reduce cigarette smoking and improve the public's health. The expressed purpose of the tax is to balance the state's budget and avert what would otherwise be a budget crisis.
The fee/tax is about one thing - money. It is about finding a way to reap in $185 million in additional revenues so that the state does not have to take any politically less popular measures to finance its budget (such as raising taxes on the wealthiest of citizens and corporations, rather than the poorest residents).
The rest of the story is that the very same legislature which is now asking smokers to pay for the necessary state services that no politician wants to cut or to ask the wealthy to finance two years ago decimated the state's services for those very smokers, destroying a program dedicated to preventing youth smoking and encouraging smokers to quit.
But instead of suggesting that the cigarette tax be increased to restore these services which would directly benefit smokers and improve the public's health, the anti-smoking and health groups simply want to raise the cigarette tax, regardless of whether the money is used to provide any services, treatment, or other programs for those who will shoulder the burden of this regressive tax.
Rather than trying to restore the tobacco prevention and cessation services, the health groups are essentially acting as accomplices in the decimation of what had been an effective tobacco control and public health program by accepting its demise and not calling for the massive proposed cigarette tax increase to be used, at least in part, to restore the program and services.
And this opportunity will not arise again any time soon. You don't have too many opportunities to raise taxes these days, so if you are going to do it, you ought to be pretty darn careful about how you choose to allocate the revenues. If you aren't spending the money, at least in part, to benefit those who are shouldering the burden of the payments, then the tax is truly regressive and discriminatory.
As Dr. Richard Wagner stated in his report critical of the use of tobacco taxes to fund state budget shortfalls: "Tobacco taxation is a severe form of tax discrimination whose victims reside primarily among the working classes and not professional people. It is tax discrimination against people of modest means for the benefit of the well-to-do."
I think this discriminatory effect can be mitigated by allocating the revenues from the tax to benefit those who are paying the tax (such as providing for cessation services, tobacco prevention programs, smoking education, medical treatment for smoking-related diseases, and increased research on treatments for the diseases which we are so dismal in treating). However, this is not what the health groups are calling for. Instead, they seem content to have the money used simply to balance the budget, and to allow the decimated state tobacco control program to remain in shambles.
It is not as simple as the health groups are making the issue out to be. In the press release, the Blue Cross spokesperson stated: "It's good health policy to have higher cigarette prices. It prevents kids from starting to smoke and it encourages adults to quit."
I view that as a very narrow perspective on the complex policy issues involved. First of all, it ignores the purpose of the increased cigarette tax. Second, it ignores the possibly regressive and discriminatory nature of the tax. But perhaps most importantly, it ignores the potentially destructive public health consequences of making the state dependent upon cigarette consumption to fund vital state programs and services.
This policy would make the state dependent on cigarette consumption for the most vital resources of the state: those necessary to balance the budget. It would completely take away any legislative incentive to promote any kind of vigorous smoking cessation or smoking prevention program. You might as well kiss the restoration of the tobacco control program goodbye for the near future. And more importantly, there will be no further incentive for the legislature to do anything that would seriously affect tobacco consumption. Doing so would threaten the state's budget and therefore, with this proposal, becomes politically untenable instantaneously.
In other words, what the anti-smoking and health groups are pushing for is a proposal that would stymie any effective tobacco control policymaking in the state. I don't see that as good public health policy.
I see this basically as a way to balance the budget in the most politically palatable way possible: do it on the backs of smokers, a group which tends to be less economically advantaged and easier to take advantage of. Don't ask the wealthiest citizens and corporations to balance the budget - after all, they represent a much stronger voting bloc and such an action could harm the re-election chances of politicians, and possibly even donations to the non-profit health groups. But putting the burden on the smokers is the easy solution and it won't hurt the politicians or the health groups politically or financially.
The rest of the story is that the health policy which anti-smoking and health groups in Minnesota are lobbying for is little more than a discriminatory, regressive tax on the poorest state citizens designed to balance the budget on their backs rather than have the courage to ask the wealthiest citizens and corporations, who could easily afford $185 million per year, to do so. It makes the state dependent on cigarette consumption for its financial stability, takes away any incentive to pass effective tobacco control policies that might significantly reduce cigarette consumption and threaten the state budget, destroys the chances of restoring the state's effective tobacco control program, and squanders an opportunity to provide services for smokers and research and treatment for the diseases that are affecting them.
This is hardly what I would call a "win, win, win" situation, as the Campaign for Tobacco-Free Kids has called it. At least not if you have a little broader view of public health policy than simply wanting to raise cigarette taxes as the be-all and end-all of your strategy to improve the public's health and instead have some desire to build a lasting public health and tobacco control infrastructure that can and will remain effective, fair, and unencumbered by irreconcilable adverse political constraints.