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A Permanent Tax is Never A Substitute for Meaningful Budget Reforms

Yesterday, the state House of Representatives tried to pass a cigarette tax increase (HB3210).  Leadership left the vote open for several hours to try to gain support, but the measure eventually failed 40 to 59.

House leadership wants to use the cigarette tax, a completely unreliable and unsustainable revenue source, to pay for state Medicaid costs.  The health care authority wants to use the funds to pay for Obamacare’s Medicaid expansion. The House Democrat caucus, which voted against the cigarette tax, wants to cut a deal with the House Republican leadership to exchange their vote for the cigarette tax, for expanding Medicaid through Obamacare. The House will likely reconsider the cigarette tax sometime over the next few days.

While Oklahomans have a huge uphill battle over the next few days to fight these disastrous proposals, our voices are being heard at the Capitol. Just this week, for example, legislators attempted to insert a Medicaid expansion provision into the cigarette tax legislation. Thanks to the efforts of AFP activists and other free-market coalition partners, Senate leadership removed the provision from the bill.

AFP Oklahoma has encouraged our legislators to reject the proposals to raise taxes and to expand Medicaid that have been contrived in an effort to find some false and temporary relief from our state’s current financial difficulties. Instead, we will continue to urge lawmakers to embrace solutions that embody limited government and fiscal restraint.

Increasing taxes or expanding Medicaid through Obamacare will only exacerbate Oklahoma’s current fiscal problems and increase the risk of future financial difficulties. While the “revenue enhancements,” or rather tax increases, have been designed to solve a temporary problem, tax hikes will create a permanent burden on hard-working Oklahomans. If the budget hole is not erased through spending reductions and other fiscally responsible reforms, our state’s financial woes will continue on into future budgets, to be resolved by future Legislatures, and to be paid for by future taxpayers.

In addition, Obamacare’s Medicaid expansion will only further weaken our state’s financial standing. The Medicaid “rebalancing” plan will increase future state health care costs through expanded Medicaid eligibility and will create a new entitlement for able-bodied adultsTraditional Medicaid expansion, as advocated by some legislators, would be equally as devastating for Oklahoma.

Oklahomans overwhelmingly support free-enterprise and limited government.  Legislators should support these ideas in practice, by keeping taxes low, limiting government, and right-sizing the state budget.  These ideals, in the end will prove themselves to be the best, clear path forward for Oklahoma.