Obama’s plan to fund pre-K will run itself out of money
President Barack Obama, astutely aware that people like kids and don’t like smokers, wants to fund his universal preschool programs through increased tobacco taxes.
The only problem? People don’t smoke enough to keep the program running.
The president’s preferred policy — which he has touted in numerous speeches this year — would support existing early education in the 50 states as well as establishing news ones modeled after the federal Head Start program. The policy costs about $80 billion over the next 10 years, and would theoretically be paid for via a 98 percent increase on tobacco taxes.
But after the first ten years, tobacco taxes will no longer generate enough revenue to pay universal pre-K’s annual $8 billion price tag, experts estimate.
The issue is that U.S. smoking rates have steadily declined over the last 50 years–making tobacco taxes an unsustainable funding source for the president’s pet programs, according to Scott Drenkard, a research fellow at the Tax Foundation’s Center for State Tax Policy.
“Outside the ten year window, its predicted the revenue source will be much smaller than what the spending needs to be to keep this program running,” said Drenkard in an interview with The Daily Caller News Foundation. “In a general sense, this is a budget trick.”
So far, the Republican-controlled House of Representatives has balked at raising taxes to pay for universal pre-K programs, which have not generally been shown to yield academic and social gains for enrolled students in the long run. Instead, the administration has used discretionary funds in other federal programs–including Race to the Top and even Obamacare — to push early education. (RELATED: Obama skirts Congress, funds universal pre-K through Obamacare)
But even if the president did get his way, there wouldn’t be enough money to pay for the program in the none-too-distant future.
When that happens, the states would have to shoulder the burden, or cut the programs — and cutting programs is a hard sell once they are up and running, said Drenkard.
“It will have a constituency and you can’t think of a more sympathetic constituency in this case than pre-K students,” he said. “You are taking the position that cigarettes are bad and children are good.”
The projected shortfall for spending on pre-K programs speaks to the dangers of relying on sin taxes to generate revenue. Increasingly punitive taxes on cigarettes discourage their use, ultimately resulting in fewer people using them and paying the tax.
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