The beverage tax came about in negotiations as the Legislature wound down earlier this year. Lawmakers were trying to address dissatisfaction with the funding mechanism for the state’s Dirigo Health insurance plan. The original idea behind Dirigo was to first find savings in the state’s health-care system. Some of those savings would then be captured in an assessment on insurance claims, and that money would be used to pay for a new insurance program for individuals and small businesses.
Dirigo hasn’t produced as much savings as hoped for, and it has been hard to document what savings there have been. Employers and others are therefore skeptical of the assessment on insurance claims, seeing it not as a recovery of savings, but as a tax.
To address these concerns, lawmakers looked for a new way to fund Dirigo. After considering a cigarette tax, they settled on the beverage tax and a more modest assessment on claims at a fixed rate.
This approach betrays one of the basic principles of Dirigo. The whole idea behind the program was to find savings within the system and use that money to help the uninsured. Pumping new money into the program simply adds to an already inflated health-care bill for the state.
It would be better if the state got rid of the beverage tax and returned to the old way of funding Dirigo. Lawmakers could then try to figure out how to generate more system savings or make the funding mechanism more transparent.
Given the narrow nature of this tax and its small size relative to the state budget, this is, as critics of the repeal effort have said, a small issue to be taking up in a referendum.
But, nevertheless, it is on the ballot, and given the flaws of the beverage-tax legislation, a “yes” vote is warranted.
The PPH endorsing Question 1? Wow.