Reason Writers Around Town: Peter Suderman on Paying for Medicaid With Cigarette Taxes in The Daily



ver at The Daily, Reason Senior Editor Peter Suderman looks at Illinois Gov. Pat Quinn's proposal to fund part of the state's Medicaid program on cigarette taxes:

Illinois' Medicaid program faces a $2.7 billion shortage that its governor has promised to deal with. So how does Gov. Pat Quinn propose to close the fiscal gap for his biggest budget item and largest health program? By relying on the state's smokers to keep puffing — and paying — away. 

Quinn wants to shore up the fiscal health of Illinois' ailing Medicaid program by imposing a new per-pack tax on cigarettes, thus making the health coverage of millions of disabled and low-income individuals in the state directly dependent on keeping smoking rates up.

But if previous experiences with state smoking taxes are any indication, it won't work. In his February budget address, Quinn was blunt with state lawmakers. "Our rendezvous with reality has arrived," he said. He declared his intention to pass a $2.7 billion reform to the state's Medicaid system. Quinn's proposal, released in April, included a variety of cuts and payment reductions, as well a $1-per-pack cigarette tax that his office said would raise an estimated $337.5 million directly.

Sadly, the governor does not seem as eager to meet with fiscal reality as he claims: That revenue estimate from the smoking tax is almost certainly inflated.

Whole thing here

Much more from Reason on smoking taxes here