Limit proposed increase in tobacco tax

An editorial from The Intelligencer/Wheeling News-Register 

WHEELING, W.Va. — Gov. Earl Ray Tomblin proposed increasing tobacco taxes in West Virginia, taking them up by 45 cents per pack of cigarettes. Tomblin said the money would prevent drastic cuts in insurance benefits for active and retired public employees.

State senators have approved a $1 per pack increase – also to forestall those benefit cuts.

What gives? Does the Public Employees Insurance Agency need more than twice the tax increase recommended by the governor?

No. Not now, at least. That is why members of the House of Delegates should balk at the Senate proposal.

A tax increase at the level Tomblin suggested would raise about $78 million a year. Of that amount, the governor had proposed handing the PEIA about $60 million. That would have been enough to make benefit cuts much less severe, he said. The remaining $18 million would have gone toward balancing the state budget – in which a $466 million shortfall is projected for the fiscal year that begins July 1.

But state senators have approved a bill that, with the $1 a pack increase, would result in about $115 million per year in new revenue. All of it would go to the PEIA. Proponents of the measure say that would give the agency plenty of support beyond the upcoming fiscal year.

It certainly would. That, in turn, would give PEIA officials no incentive to find ways to get insurance costs under control – something many legislators have been demanding.

Taxpayers already do a lot for the PEIA. The agency already receives $422 million a year in subsidies through the state budget. The Senate plan would take that well beyond half a billion dollars a year.

Some level of tobacco tax increase probably is inevitable. This is an election year. Few lawmakers want to risk the wrath of PEIA clients by not doing something to prevent major cuts in benefits.

But enough ought to be enough. The increase proposed by Tomblin is enough.

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