Voters should repeal the beverage tax adopted by the Legislature in the final hours of the last session to support the Dirigo Health program.

If for no other reason, the tax should be repealed to send legislators a message about the manner in which it was adopted – without giving the public an opportunity to be heard on the proposal. After failing to win enough support in the Legislature for increasing the cigarette tax, lawmakers quickly hashed out alternative taxes on glasses of wine and beer and cans of soda.

Depending on whom you ask, the tax is expected to raise between $16.7 million and $40.7 million to support the Dirigo Health program. It has been struggling to sustain itself through its original method of funding – the Savings Offset Payment, which was designed to pay for the program with savings created through Dirigo reforms.

The Savings Offset Payment, however, has proved unpopular because it can be passed on to health insurance consumers in the form of higher premiums and it is unreliable as a base of support for Dirigo Health. The state has had to borrow $20 million from the general fund to support the program, and Gov. John Baldacci closed enrollment in the plan last year to keep program from running out of money, until a new funding source could be found.

The state has had to abandon its original funding source, with the program covering only a fraction of the population it was originally intended to cover. Created in 2003, Dirigo was supposed to insure 160,000 Mainers, yet today it insures only 18,000 Mainers.

The insurance it provides for those 18,000 Mainers is important to each of them, but the state has so far refused to face head-on Dirigo’s shortcomings and re-examine the premises under which it was created. The beverage tax not only allows the state to continue doing that, it also does so at the expense of some of the state’s small businesses, which Dirigo was supposed to be supporting.

If the beverage tax is repealed, the Savings Offset Payment will continue supporting those who have Dirigo health insurance now, and if it’s allowed to stand, it’s also clear the governor and Legislature have no intention of making changes to a program that needs significant reforms.

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Brendan Moran, editor

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