Greater Baton Rouge Business Report: Sins of the parents

The governor's plan for raising education salaries depends on all of us doing our part by smoking, drinking and gambling more. After all, it's not just for the teachers, it's for the children.

After her first year in office, in which she cut business taxes and aggressively pursued economic development, Gov. Kathleen Blanco now faces the dreary economics of the public sector, from filling the health care budget gap to satisfying the impatient salary demands of her major political supporters, the schoolteachers.

With the heads of teacher organizations complaining of the lack of a plan, the administration suggested one last week. But nobody, including the teachers' leaders, was very excited about it--except opponents incited to fight it.

The idea: To better fund education, the ultimate civic virtue, our darker angels must carry the load through higher taxes on cigarettes, gambling and alcohol. Blanco foresees a menu of sin taxes generating up to $120 million, though she might have to settle for $70 million, which would raise the average teacher salary by $1,000. That would leave Louisiana teachers $3,000 below the average Southern salary, which continues to rise. And it does nothing for school support workers, though their powerful champion, Senate President Don Hines, will have something to say about that.

Teacher representatives were not impressed with the goal, which they termed "a start," and are unhappy with the source, which they consider unstable, given the inexorable decline in tobacco usage. Not that they will turn the money down.

Skittish about any tax increase, legislators reacted strongly to the word "menu," fearing they will be on one some day if they make multiple grabs at taxpayers' pockets. If they have to raise taxes, they would prefer to get as much as they can on one vote and be done with it.

That makes cigarettes the prime target. Raising the 36-cent-per-pack tax by 20 cents--a penny a stick--could raise over $70 million, or somewhat less depending on how much the higher price suppresses demand.

The administration's idea of raising all gambling taxes to the 32% level paid by video poker truck stops would meet fierce resistance from riverboats, taxed at 21.5%, and bars and restaurants with video poker, taxed at 26%. Those sin industries, especially Lake Charles and Shreveport riverboats, employ thousands of local workers and already face competition from untaxed Indian casinos. Bar and restaurant owners can exert great political pressure.

[ILLUSTRATION OMITTED]

Alcohol can be as sinful as tobacco and gambling, but even substantial tax increases on beer, liquor and wine won't produce much revenue. A tax vote is a tax vote, which all look equally bad in the fine print at the bottom of attack ads by future political opponents.

The Democratic governor's tax talk is music to Republicans who, after a year of being co-opted by the business-friendly Blanco, are looking for issues to challenge her on. She's lobbing them a softball.

Democrats in the Legislature, as much as they want a teacher pay raise, are confused by the governor's plan. Until two weeks ago, they were hearing that a cigarette tax might be used to help close the projected $300 million hole in the Medicaid budget, without which another $700 million in matching federal funds go away. The Medicaid crisis has been looming on the horizon for a year, but where's the administration's plan on that? They are working on it, we are told.

For many, supporting education with a regressive, unstable tax on an unhealthy product is a perversion, also known as the Louisiana Way. The consolation for taxed smokers is knowledge that each match they strike, though it may hasten their own dark future, lights the way for the next generation's brighter tomorrow. Or some such nonsense.

JOHN MAGINNIS is a Baton Rouge-based syndicated political columnist. Reach him at his Web site, www.lapolitics.com.