Call it a last-ditch effort for a cigarette tax increase in Kentucky.
Christian Care Communities CEO Keith Knapp has a two-step plan to save the state Medicaid budget. First, he wants to raise the state excise tax on cigarettes. Then, he says we should apply the windfall from that tax exclusively to Medicaid in order to gain matching funds from the federal government and wipe out the program’s deficit.
From The Louisville Courier Journal (click to expand):
You’ve heard the song “There was an old lady who swallowed a fly,” right? This is similar. If you believe that all the people who come into Kentucky to buy cigarettes at our lower prices now will keep doing so when taxes make ours more expensive, then you are probably willing to ignore the rationale for the tax increase began with a desire to get people to stop smoking in the first place. You have to be up for some more believing and ignoring to make this work, though, because once the first step runs into the real world and the $200 million in new revenue doesn’t pan out, you still have a growing Medicaid budget to fix. And not enough money to fix it.
That’s a lot to swallow.
There’s just not enough magic in the Magic Cigarette Tax Increase to make all this bad logic go down. Cutting spending is a surer way than torturing numbers to get out of current — and future — budget problems.