Friday, February 12, 2010

Biting the hand that funds the budget

Barbara Hollingsworth points out that Democratic efforts to insert bans on candy and soda for school lunches is going to cause problems for some liberal locales. With Michelle Obama's crusade against childhood obesity, there is a real push for such a ban. However, as Hollingsworth writes, liberals such as Gavin Newsom of San Francisco and David Paterson of New York want to enact taxes on candy and soda. Their budgets depend on anticipated revenues from those taxes.
To help deal with a $15 billion state budget deficit, Paterson has reintroduced his $1.28 per gallon soda tax proposal - which will increase the cost of a non-diet soda by 15 percent. Newsom is planning to bypass San Francisco voters by imposing a still undisclosed fee on retailers who sell individual cans of sugary beverages so he doesn't have to get the new tax approved in a referendum.
If everyone listens to Mrs. Obama, New York and San Francisco will have to find some other revenue. It rather reminds me of how the Democrats extended the SCHIP program for health insurance for poor children but funded it through an additional tobacco tax. However, if the tobacco tax works as such taxes have worked in the past people will decrease smoking in response to the price hikes. Then how will they fund the program? We might all agree that it is worthwhile goal to have fewer children eating candy and drinking soda or fewer people smoking, but achieving those desirable goals will also mean that there will be less virtuous money available for these politicians to spend on other goals.