Ore.'s vote on SCHIP could resonate in D.C.


When Oregon residents weigh in next month on whether to raise the state's cigarette tax to pay for an expansion of children's health care, their votes will resonate 3,000 miles away on Capitol Hill.

Congress and the Bush administration have been wrangling over the same concept, writ large, in their showdown over federal spending on the State Children's Health Insurance Program.

"If Oregon votes in the affirmative for this, it will be a shot in the arm," said U.S. Rep. Earl Blumenauer, D-Portland. "It will be harder for some people to ignore what the public sentiment is. Maybe they can ignore the polls, but this would be a signal victory."

On the flip side, if the measure goes down in Oregon, which is widely viewed as a liberal-leaning state, it will be a serious setback for children's health advocates, and a notch in the belt of the tobacco companies.

"It's the symbolism," said Oregon Gov. Ted Kulongoski, a Democrat who is vigorously campaigning in support of the measure, donating $200,000 from his own political action committee. "If you can defeat it here in Oregon, you send a chilling message to the rest of the country."

Both sides in Oregon seem keenly aware of the high stakes of the debate, the only ballot measure of its kind in the country this year. Tobacco companies, led by Philip Morris and R.J. Reynolds, have poured in $10.6 million, making it the most expensive ballot measure campaign in the state's history by far.

That's about $3 for every one of Oregon's 3.7 million residents, and at least a dollar more per capita than the $60 million the tobacco industry spent to persuade California's 36 million residents to defeat a similar measure in 2006.

"The industry is going completely berserk in Oregon to stop this tax," said Stanton Glantz, director of the Center for Tobacco Control Research and Education at the University of California-San Francisco. "The stakes are higher, because the tobacco industry will use (a win) as part of their argument against S-CHIP."

Supporters of the proposal, known as Measure 50, can't match the tobacco industry dollar-for-dollar, although health insurance companies and hospitals have kicked in substantial donations.

But they've got the state's 100,000 uninsured children on their side, along with their families, who have starred in a series of TV ads and mailers, telling stories of debt and heartbreak.

"I worry about it every day," said Robin Abbott, a mother of two and part-time student whose husband works as a chef, but gets no health coverage from his job. "It would really destroy us. I just hope that nothing happens."

She recently took her 15-month-old son, Jackson, to a clinic run by the Yakima Valley Farm Workers union, for routine blood tests, to detect the presence of lead and iron. She has no idea of the cost of the testing, she said.

"I was afraid to ask," Abbott said. "They are going to send me the bill."

Under the Oregon proposal, the state tax on a pack of cigarettes would rise from 84 cents a pack to $2.02 per pack. That would be one of the highest in the nation, behind only Rhode Island and New Jersey.

The new tax would raise an estimated $153 million in its first year and a half, state budget officials have estimated, enough to eventually insure about 100,000 children who have no current coverage.

About half of those children are from families who make more than twice the federal poverty limit &

about $41,000, for a family of four &

but who don't get health care at work and can't independently afford the cost of private insurance.

Oregon families who make between $41,000 and $62,000 would be able to pay on a sliding scale for subsidized care.

That's the same concept that has piqued President Bush and some of his GOP allies in the S-CHIP debate. They argue that expanding federal matching dollars for state programs that fund children's health coverage will inspire middle-class families to abandon private insurers in droves.

In Oregon, though, the expectation is that the families who sign up their children will be the ones who've fallen through the cracks, said Dr. Bruce Goldberg, who heads the state Department of Human Services.

"These kids have already been crowded out of the private sector," Goldberg said. "That is why they are uninsured."

Campaigning against the Oregon proposal, tobacco companies have hit some of the same notes as they have in the national debate over the State Children's Health Insurance Program, questioning whether government can be trusted to manage the new funding.

"Shouldn't we make the existing system work ... before we raise taxes for a new program?" queries an actor playing an office worker, in one of the tobacco-financed ads that's in heavy rotation around the state.

David Sutton, a Richmond, Va., spokesman for Philip Morris, uses the same argument to combat both the federal and Oregon proposals to raise cigarette taxes.

"We continue to believe that funding any expanding programs with declining revenue sources doesn't make sense," Sutton said.

The tobacco industry has also focused on the merits, or lack thereof, of enshrining the tobacco tax in Oregon's constitution, and questioned whether the money would all go to provide health care for children.

Supporters have struck back on that last point, saying that it's virtually impossible for the state to spend all $153 million at once, given the time needed to publicize the new program and enroll families. the 2009-2011 financial cycle, 70 percent of the money generated from the tobacco tax is projected to go to children's health care, with the rest spent on anti-smoking efforts and other health initiatives.

The tobacco industry hasn't done much with the ethics of whether it's fair to make only 20 percent or so of the state's population shell out for a tax that will benefit the population at large. But among themselves, smokers have plenty to say on that topic.

"If they want to tax me 84 cents for some sort of an insurance program to benefit children, that's fine, as long as I know everyone else is paying 84 cents too," said Marilyn Sampsel, who was working her way through a pack of Benson Hedges at a Portland bar on a recent weekday. "When we start taxing dockworkers to build new bridges, that's when we can start taxing smokers to pay for everyone else's health problems."

There's been little public polling on the topic. But internal campaign polls have suggested that the vote could go either way.

Democrats in Congress reintroduced the S-CHIP bill this past Thursday, but fell seven votes short of the majority needed to override Bush's promised veto. Another vote is expected within weeks.

Sutton, of Philip Morris, was circumspect about the impact that the Oregon vote might have on the unfolding debate.

"No one really knows what the timing will be," Sutton said. "Congress could take action before Oregon has completed the Measure 50 process."

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