Louisiana is $1.6 billion in debt and spends $1.9 billion a year on smoking-related health care costs, yet the state is currently debating even small increases in the tobacco tax. That seems odd when legislators have repeatedly stated they want “revenue neutral” fixes to the debt; raising tobacco taxes is a proven win-win for states; and 70 percent of Louisiana residents favor a tobacco tax, including a majority of both Republicans and Democrats.
- Louisiana is $1.6 billion in debt.
- Louisiana spends $1.9 billion per year on smoking-related health care costs. That equals $1,211 in taxes per Louisiana household.
- “Revenue neutral” according to BusinessDictionary.com is defined as “a condition of fiscal policymaking in which any increase or decrease in tax revenues be achieved with a commensurate increase or decrease in tax revenues. For example, a proposal to decrease taxes for one economic group must include a mechanism to increase tax revenues from another source in order to offset the revenue decrease.”
- Louisiana provided $1.8 billion in tax giveaways in 2014 to six industry incentive programs, according to The Advocate, the state’s largest newspaper in an extensive investigative report. (Those included the film, enterprise zones, horizontal drilling, inventory tax rebates, quality jobs and solar energy industries.)
- No commensurate tax increases took place.
- To pay for the tax giveaways, Louisiana has already cut its higher education budget by more than half, according to The Advocate, which resulted in tuition hikes for parents and students.
- Unless action is taken, health care is projected to be cut by $800 million and higher education by $600 million (an approximate 82 percent cut) in the next year, according to nola.com. Due to legal constraints written into the Louisiana state constitution, health care and education budgets are easy to cut; budgets in most other areas are protected.
- A cigarette tax of $1.18 per pack to match the national average will raise $250 million for Louisiana. Louisiana currently has the third lowest cigarette tax in the nation.
- A cigarette tax of $1.18 per pack will save the state $7 million in lung cancer cases; $15.4 million in heart attacks and strokes and $7.4 million in Medicaid.
Although $250 million is still short of the $1.9 billion Louisiana spends on smoking-related health care costs, as well as the $1.8 billion it has spent on industry tax incentives, the math – and Louisiana residents – are making it clear that a tobacco tax is needed and wanted. Those in charge now have a way to help get the state out of debt, while improving the state’s overall health. It all adds up. To learn more, go to www.investcampaign.org.