Cigarettes Tax

For all the Legislature has to deal with in balancing the budget amidst a historic revenue decline, the growing political test of wills over renewing 4 cents of the online cigarettes tax makes little real difference, to smokers or the state treasury, even when it expires more than a year from now.

Having passed both houses by two-thirds majorities, House Bill 591 is teed up for a veto, which Gov. Bobby Jindal has all but promised. In turn, that would set an extremely rare override vote, thus competing with the budget debate for attention during the closing days of this session.

For all the drama of a veto showdown, what's really at stake here? Whether or not the bill is vetoed or a veto is overridden, nothing happens until the 4-cent portion of the 36-cent-per-pack tax expires in July 2012. Designating that $12 million as federal Medicaid match, for a total of $40 million, is meaningless, since the state match would be swapped out with other state money. All that is at stake is $12 million in the 2012-13 budget.

The 4-cent price break is not going to affect anyone's bad habit, nor would extending the tax pose a burden to taxpayers, which is the hapless argument offered by the governor's staff.

Regardless of the money at stake, what really bothers legislators of both parties is the gall of Jindal to push for substantial college tuition increases while giving up revenue from a source that voters, according to surveys, want to tax more. It's enough to drive a college kid to smoke.

Capitol observers wonder why the governor has drawn a line in the sand on the wrong side of public opinion and two-thirds of the Legislature. He has his reasons, some more obvious than others.

Of course Jindal wants to maintain his tax virginity, considering his future national aspirations, and holding the line on the cheap cigarettes levy is a cheap way to do so. If the whole cigarettes tax were up for renewal, with the revenue loss this year, he might make the distinction, which he doesn't now, between a renewed tax and a new tax.

A more devious motivation could be that whipping up a veto controversy, with little to lose, serves his interest by distracting attention from much bigger issues to be resolved in the weeks ahead.

The fate of 4 cents of discount cigarettes tax is insignificant compared to his budget priority, to restore an $81 million funding cut by the House that would impede the transition to a privatized managed care system for 800,000 people on Medicaid. The new Coordinated Care Networks eventually are to be expanded to the entire Medicaid population, itself to be expanded to about 2 million people by 2014 under the federal health care law.

As planned by Jindal, the transition to the CCNs, administered by national insurance companies, would be the largest single privatization in state history and the greatest change in state health care policy since Louisiana entered the Medicaid program a half century ago.

Remarkably, the Jindal administration has put the pieces in place for the privatized health care model with minimal input from the Legislature. According to leading privatization critic Sen. Joe McPherson, D-Woodworth, a clause in last year's budget bill to require legislative approval of the CCN plan mysteriously was deleted during negotiations over a final version on the last day of the session.

This year, the House's $81 million cut to implementing the CCNs provoked a howl from Team Jindal -- even some leading fiscal hawks might not have realized how hard they had hit him where it hurts. The potential delay of the program inspired the Public Affairs Research Council to publish a commentary urging the state to revisit the CCN model, which PAR called a "dubious privatization venture" that might not provide better health care or cost savings.

Such talk is anathema to Jindal and his health advisers at this point. They want the CCN money back in the budget, the Legislature to go home and their privatized makeover of health care to proceed. No wonder they seem to be picking an end-of-session fight over a 4-penny tax on cheap cigarettes that won't expire until next year. Pay no attention to the man behind the curtain.