This is a tax increase we can live with
SouthtownStar editorial June 1, 2012 7:24PM
Updated: July 6, 2012 10:00AM
We’re certainly not supportive of tax increases, especially when it comes to the regressive property tax, because Illinois citizens have been overwhelmed in recent years with higher fees and taxes.
But occasionally there’s justification for a tax hike, such as a user tax that will help avoid greater cuts in services to the needy and can help deter unhealthy behavior. That’s the case with the cigarette tax hike approved by the Legislature this past week.
The $1-per-pack increase is part of the Medicaid reform package lawmakers also approved to resolve the state’s roughly $2.7 billion funding shortfall for the program that provides medical care for the poor. That package includes about $1.6 billion less in Medicaid spending and stricter enforcement measures designed to reduce ineligible recipients.
It also contains about $1.1 billion in extra revenue to avoid deeper Medicaid cutbacks — shifting $300 million from other state funds into health care and raising $350 million via the higher tobacco tax and $50 million from hospital fees. The latter two figures are doubled when matching federal funds are included.
So raising the cigarette tax (which also will apply to other tobacco products) only affects smokers and hopefully encourages more of them to quit, brings in twice the revenue and prevents deeper cuts in medical care to those who are among society’s most vulnerable.
Make no mistake, the huge drop in Medicaid spending will cause suffering among the poor, many of whom no longer will be able to obtain important medical care. But without the tax hike’s extra revenue, that suffering would be greater. Illinois’ level of Medicaid spending was unsustainable, sucking up money from other key government services and threatening the long-term viability of the program.
If the higher tax motivates some folks to give up smokes, all the better. Smoking-related illness is a significant factor in rising medical costs, including those covered by Medicaid.
So it’s a tax increase we can grit our teeth and live with. But it’d sure be nice if legislators could control spending to avoid any more fiscal crises.
