Find a better way to fund health insurance

Gov. Ted Kulongoski laid out a generally solid vision of Oregon's near-term future in his state-of-the-state address, but he continues to cling to the unpopular idea of funding health care for children with higher cigarette taxes.

The governor's address, overshadowed by the whirlwind visit of presidential contender Barack Obama, was heavy on themes that have marked the Kulongoski administration: increasing investments in education, transportation and health care, along with raising the corporate minimum tax to shore up the state's rainy-day fund. All worthwhile goals, although he will have his work cut out for him convincing lawmakers to accomplish them all. The state Republican chairman immediately criticized much of the speech as another example of how Democrats "take money from us."

The need for better education funding, especially higher education, is undeniable. And the state's transportation system needs attention.

The corporate minimum tax is badly outdated — it was set at $10 in the 1930s — and can be adjusted without placing an undue burden on business. There was movement on that issue in the 2007 session, with Republicans and some business leaders willing to discuss the details, but a hoped-for compromise collapsed. Those discussions should be resumed.

Where Kulongoski stumbled, in our view, was in hanging on to the idea that the best way to provide health insurance to more children is to raise the cigarette tax and only the cigarette tax.

That didn't work so well last year.

First, majority Democrats couldn't find enough Republican votes to pass the tax increase outright, or to refer it to voters as a statute — both of which require supermajorities. Instead, the Democrats pushed through a constitutional amendment referral, which requires only a simple majority.

Then the tobacco industry blanketed the state with a $12 million ad campaign using scare tactics and outright falsehoods to defeat the resulting ballot measure. The measure was trounced everywhere but Multnomah County. Kulongoski apparently hasn't learned from that experience.

If he pushes a similar plan in the 2009 session, the same battle will take place all over again, with similar results. If lawmakers succeed in referring the tax again, it will face the same withering opposition. If they actually pass the tax themselves, it will surely be challenged in a referendum campaign.

Insuring Oregon children is a worthwhile goal, one we have supported in the past and will continue to support. And making cigarette smoking more burdensome has its advantages, too.

But the voters have made it clear they don't like singling out one segment of the population for a tax increase. The governor and legislative leaders should sit down and figure out a way to spread the cost over a broader segment of the population, then make the case that insuring kids is in the state's best interest.

Taking another run at a cigarette tax increase is asking for trouble.

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