Thursday, May 8, 2008

Government's Growth is "Smokin'"

The South Carolina Senate passed this week a 50 cent per pack cigarette tax increase - expected to generate $159 million annually. Where will the money go? The majority of it will go for heath care for low income residents - 50% for Medicaid and 50% to a new voucher system for the state's lowest-income residents to get private health insurance. There are a few concerns for me here:

I personally have never had a philosophical problem with a cigarette tax increase. The problems I have had, though, have been: 1. What is the state was going to use the excess revenue for? and 2. Would we be creating programs that would need recurring revenues? - knowing that the new revenues from this tax would dramatically decrease over time due to, hopefully, less people smoking as well as cross-border or internet cigarette sales.

The Senate plan, as I understand it, grows government - well - it grows welfare, too. So the state is going to chase the 3 to 1 Medicaid match with 50% of the revenues (keep in mind that historical data shows that revenues from a cigarette tax decrease after the initial surge, leveling off somewhere significantly below the revenues realized in the first couple of years). When we grow the Medicaid rolls, what will we do in future years when the cigarette tax revenue declines? That would mean taking dollars from elsewhere to fund Medicaid or, heaven forbid, cut Medicaid spending - which we will never do........

Then, the Senate plan will grow welfare by creating a voucher system for the state's poorest to purchase health insurance........hmmmmm..........So there is nothing to help small businesses provide affordable health care insurance for those employees that are gainfully employed, trying to contribute to the success of a business and are paying taxes? Or how about the guy in the middle, who is struggling to have health insurance, will probably never be eligible for Medicaid and needs a helping had if we are going to increase taxes?

Yes I am a Conservative. No apologies here for that. I am not about growing government and not about growing welfare. I may not have a problem with the cigarette tax increase - but new revenues would have to be used sensibly to help the majority of the state citizens. Give me a sensible plan and I'll vote for it. Give me the Senate plan, and I will vote against it.