Oregon Voters Reject Cigarette Tax for Health Care Expansion

Published January 1, 2008

In early November, Oregon voters provided an unusual opportunity to find out what voters think about a legislative proposal being considered in Congress.

When asked about raising state cigarette taxes to add more children to publicly funded health coverage, Oregon voters rejected the plan by an 18-point margin, 59 percent to 41 percent.

Before the Oregon vote, Congress passed a bill that would increase federal cigarette taxes by 61 cents a pack to pay for an expansion of the State Children’s Health Insurance Program (SCHIP) to cover more children, including many in middle-income families. The bill was vetoed by President George W. Bush.

No Help

Oregon’s ballot results are an important signal.

Measure 50 would have increased Oregon’s cigarette tax by 85 cents a pack. The measure went to the voters for a referendum after Democratic state legislative leaders failed to get enough support to pass the measure outright. They didn’t have the three-fifths vote needed to pass revenue-raising bills in the legislature, but they did have the simple majority needed to ask voters to amend the constitution and add the cigarette tax. All they needed was a simple majority of the voters to say yes.

The measure failed in every county but one.

Bush has said he wants Congress to focus on devising an SCHIP bill that would concentrate on enrolling lower-income children who already are eligible for Medicaid and SCHIP, before expanding coverage to kids in higher-income families.

That is what Oregon’s fallback plan will be. Oregon state Rep. Gene Whisnant (R-Sunriver) said after the defeat of Measure 50, lawmakers should focus on finding ways to enroll the children who already qualify for aid but aren’t signed up.

The ballot initiative was the most expensive campaign in Oregon history, with strong support for the measure from the governor, the majority in the legislature, labor unions, hospitals, and citizens’ groups who said the tax increase would insure nearly 100,000 children and would discourage more Oregonians from smoking.

Media-Voter Disconnect

Supporters of Measure 50 blamed a huge advertising campaign financed by tobacco companies for its defeat. But the opponents’ message must have resonated.

Opponents zeroed in on four basic arguments against the tax, according to The Oregonian: They argued there was no way to account for how the money would be spent; it was inappropriate to stick a product tax in the constitution; it was unfair to smokers; and the program was fiscally unsustainable as costs eventually would outstrip revenue.

A November 8 New York Times editorial was predictably scathing: “Big tobacco defeats sick kids.” The Oregonian offered a similar indictment.

But it is always a mistake to tell voters they are stupid, which is what these editorials did.

The direction Congress is taking with its SCHIP legislation is fundamentally flawed. Voters need to have real options. Oregon voters, like those who faced similar referenda in California and Missouri before, said this wasn’t it.

Grace-Marie Turner ([email protected]) is president of the Galen Institute in Virginia.