There is no single fix for the $1.6 billion budget shortfall Gov. Bobby Jindal and state lawmakers face in the coming legislative session. They will have a virtual Chinese menu of revenue raising and budget cutting options from which to choose. It’s a long list that includes various tax and fee hikes, eliminating or reducing corporate tax credits, trimming the size of state contracts, creating tax credits for those who contribute directly to state colleges and increasing college tuition.
None of these ideas, alone, will prevent the looming catastrophe. But lawmakers must come up with something. They face some painful choices. If they don’t find a way to close the budget shortfall, universities will be gutted. Health care will sustain $800 million in cuts, which includes forfeited federal funds because of the missing state match. Other essential government services will vanish.
The situation is so critical that legislators may have to choose between risking re-election and allowing the state’s vital institutions to collapse on their watch. Raising taxes is never a pleasant task, much less a few months before they face the voters, but they must do it.
Here’s where they should look first: Raise the state’s cigarette tax.
At only 36 cents per pack, Louisiana has the nation’s third-lowest cigarette tax. New York has the highest, at $4.35. When local taxes are added, Chicago is the most expensive place to buy cigarettes. It will cost you $6.16 per pack there. In New York City, $5.85. Neighboring Texas imposes a $1.41 tax. In Mississippi, it’s 68 cents.
The benefits of raising cigarette taxes are considerable. It would not only generate significant new revenue; higher prices would also persuade many people to quit smoking or significantly curtail their deadly habit. It would help make Louisiana a healthier place and reduce the burden of smoking-related diseases on our public health system.