DIRIGO’S CUPCAKES

Trading the controversial payment method for the state’s health plan, DirigoChoice, for funding through a snack tax creates a more reliable source of revenue only in the minds of those with short memories. The tax proposal would be the first step toward defunding this valuable program.

Offered by the governor’s Blue Ribbon Commission on Dirigo Health, the broad-based snack tax was accompanied by increased taxes on cigarettes, wine and liquor and soft drinks. These are to replace what is called the savings offset payment, a feature in Dirigo that seeks efficiencies in health care and insurance, then uses the savings from those efficiencies to cover more Maine people. Under the commission plan, only the offset from charity care, worth a few million dollars in a $60 million program, would be retained.

The alternative sources of revenue not only wouldn’t have the same influence on efficiency, they wouldn’t even meet the funding demand. The cigarette tax, for instance, is already gone because Gov. Baldacci has proposed raising it by $1 for other reasons, and he may not even get that much. The last time Maine had a snack tax, through the late 1990s, it brought in around $13 million a year. But greater than its revenue were the arguments to kill it.

That snack tax was begun in 1991, when the McKernan administration had a deep budget shortfall. It was supposed to be temporary, a patch until Maine got back on its fiscal feet but nevertheless lasted until 2000. From the mid-1990s on, however, the tax was the favorite target of anyone who disliked taxes generally and any lobbyist who liked grocery stores specifically.

Despite the fact that Maine was trying to pay for expanded Medicaid services at the time, lawmakers chose to remove a source of revenue and make less-healthy foods more affordable. They argued that the tax was too complex, that it inconsistently taxed blueberry muffins but not English muffins, that it penalized the poor, and out went the tax.

Nothing has changed since then. If Maine adds a snack tax to fund Dirigo, in a couple of years Dirigo will be short of funding and the cupcake lobby will be celebrating another win against Maine’s burdensome tax system.

For the sake of a worthy attempt to provide affordable health care, the source of funds for Dirigo resides in Maine’s $8 billion health care system. The commission properly seeks greater transparency of prices, but the Baldacci administration must go further. It must, first, believe the insurance industry, which says it is unable to find savings, then hire someone to independently look into health spending in Maine and identify actual opportunities for savings.

That process would be no less contentious than the savings offset payment or the snack-tax debate, but by its conclusion, Maine would have a more affordable health care system for everyone and less need to subsidize care.