Being from the heavy Blue State in the Pacific Northwest, this article this morning surprised me. Democrats asked the voters to vote on the same SCHIP bill that was put before Congress. By funding the SCHIP program in Oregon, the cigarette tax would increase almost a dollar a pack. The voters didn’t approve and kicked the measure to the curb.
From the Opinion Journal:
Measure 50’s defeat is being blamed on $12 million in advertising by Big Tobacco. “What happened was, the tobacco industry bought the election,” Governor Kulongoski declared yesterday.
We’re surprised the Governor thinks voters in his left-leaning state are so easily gulled–especially in a contest between “healthy kids” and cigarettes. More persuasive is the notion that voters didn’t want to pass a state tax increase to finance a health-care expansion that Congress might soon pass, along with buckets of federal dollars. But most likely, voters understood that a tax increase on cigarettes is still a tax increase, and a highly regressive one at that. Only about 20% of Oregonians smoke, and most of those are lower income.
They may also have figured that to the extent tobacco taxes reduce smoking, they will soon not yield enough revenue to pay for ever-growing health costs. An analysis by William Conerly, a member of Governor Kulongoski’s own Council of Economic Advisors, found that a straight Schip expansion funded by a tobacco tax was unsustainable, with costs exceeding revenues by $115 million by 2017.
Counting “crowd out”–the migration to public from private insurance–Mr. Conerly predicted a $638 million deficit within the decade. Oregon tried a similar universal health experiment in the 1990s, only to see it raise havoc, and voters may not have been eager for a low-budget sequel.
I think the article sums it up best by stating:
There are political lessons here, in case anyone in Washington is paying attention. Voters are rightly concerned about health care and would like everyone to have insurance, but they realize that government programs are very expensive. Americans also don’t seem to want to pay for health-care reforms directly through higher taxes.
Well, No HillaryCare for Oregon…for now.
The picture above is of the Oregon State Capitol in Salem.