Why 56 cents? | Arkansas Blog

Friday, February 13, 2009

Why 56 cents?

Posted By on Fri, Feb 13, 2009 at 9:57 AM

I probably missed this elsewhere, but I got to thinking after passage of the tobacco tax yesterday about why 56 cents was chosen as the increase on the existing 59-cent-a-pack cigarette tax -- not 57, not 55. So I put the question to Matt DeCample, spokesman for Gov. Mike Beebe.

His response is on the jump. One brief comment from me first: It seems risible on its face to say the new money (which is going to general revenues, not specific earmarks) represents precisely the amount needed by each agency and no more This suggests an absolute precision and lack of elasticity in every single budget. Call me skeptical. Soon, we hope to provide reporting, just by way of example, of extraordinary waste in just one of the small agencies set to receive benefits.

I'm for the tax, the increase in general revenue and the leveraging of federal dollars for a triple benefit. But I'm also for straight talk.

On to the response ...

From Matt DeCample:

When we started looking at a comprehensive health-care package, we sat down and listed the programs we wanted to include.  They were prioritized by price and impact to get the biggest bang for the taxpayer dollar.  We figured out a precise cost based on DF&A projections so we could present that number as the proposed tax, and not a penny more.  That’s how we landed on 56 cents.  We also wanted to avoid the Christmas-tree approach of adding programs onto a bill throughout the process and inflating the cost leading up to the votes. 
Governor Beebe wanted a package that could directly and effectively benefit the most people throughout Arkansas without simply proposing a larger, more punitive increase in the tobacco tax, an idea that others advocated.  He recognized the impact on addicted smokers and the potential (now real) increase in the federal tax as well.  
Yes, this money will go into general revenue, as does nearly all tax money generated by the State.  Governor Beebe and legislative leaders are dedicated to ensuring that this new money is distributed to fund and support the specific programs laid out in our proposal.  This revenue will serve Arkansans who need it for better health care, often the poorest and most underserved of our citizens.  And everybody, regardless of income, will benefit from the statewide trauma system.

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