Published: July 02, 2008 12:13 am            

Barbour wrong on cigarette tax, but Legislature still ‘addicted’

Let's preface this column with one clear-as-glass observation: Gov. Haley Barbour's die-in-the-ditch opposition to a cigarette tax increase as part of an overall Medicaid funding solution is one that is irrational both from public policy and political standpoints.

Barbour's unwavering protection of Big Tobacco from fair taxation in Mississippi throughout his tenure as governor - and the decision of Lt. Gov. Phil Bryant and other Republicans in the Legislature to stand dutifully by and let him do it - will likely cost the GOP at the ballot box in the future.

But that said, House Democrats hung their hats on two pegs in the ongoing Medicaid fight and neither of them are currently viable options to fund Medicaid in either the short or long term. What the House has proposed is to continue to wallow in the irresponsible practice of funding Medicaid with non-recurring or "one-time" funds.

Barbour used his constitutional authority to narrowly craft the special legislative session "call" so as to exclude increasing the state's cigarette tax from being a tool in the legislative tool box for cobbling together a Medicaid funding solution. House Democrats know that and saw it for what it was - a stacking of the political deck.

But even in the days when Democrats controlled the House, the state Senate and the Governor's Mansion - which is the vast majority of the last century - Democrats never seriously proposed making increased cigarette taxes part of a permanent funding solution for the state's Medicaid program. That gambit only became popular with House Democrats after a former Republican tobacco lobbyist was elected governor in 2003.

In the current Medicaid funding flap, the House originally wanted to raid the state's "rainy day fund" to make up the Medicaid deficit and revisit the problem during the 2009 regular session when Barbour didn't control the funding mechanisms available to the lawmakers.

Barbour proposes adoption of a Medicaid "bed tax" that would provide a permanent funding stream. Despite howls from House Democrats, Barbour's plan is the only stable funding source currently on the table. The House plan for using the "rainy day fund" to bail out Medicaid didn't make sense for several reasons.

One, there's the uncertainty of the current economy and the near certainty that soaring energy costs will create reduced state revenue and necessitate more spending than anticipated when state budgets were made months ago.

Two, it only postpones a growing problem. How? Consider these facts:

• A look at House Bill 1601 from the 2008 regular session shows that of the $380.8 million in General Fund appropriations for Medicaid in Fiscal Year 2009 that began July 1, some $97.8 million was "one-time money" that will come from the state Budget Contingency Fund. That funding is in addition to the current $90 million shortfall.

•An additional $60 million in "one-time money" was appropriated for Medicaid this year as well.

If lawmakers don't find a recurring source of funding during the special session and put it off until the 2009 regular session, lawmakers will face coming up with as much as $247 million for Medicaid in January for FY 2010 plus at least the $90 million deficit from FY 2009.

As it stands, the best-case scenario would be that lawmakers adopt Barbour's plan to implement the bed tax and then only have to find another "one-time money" source for another $157 million for Medicaid for FY 2010.

The criticism Barbour is receiving for protecting the tobacco industry from higher taxes is justified criticism of his own making. But until the Legislature can kick their "one-time money" addiction for Medicaid funding, Barbour still holds the fiscal high ground on this issue - even while continuing to shield Big Tobacco.



Contact Sid Salter at (601) 961-7084 or e-mail ssalter@clarionledger.com. Visit his blog at http://www.clarionledger.com.

        

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