How much more will Nevada taxpayers be required to come up with if Harry overrides President Bush’s veto of the expansion of SCHIP?

The SCHIP expansion legislation also hikes tobacco taxes again. The Heritage Foundation predicts a minimum $6-million hit to Nevada’s tax revenue because the higher price of a pack of cigarettes will result in fewer packs being sold. Smokers may not quit, but they’ll buy more from Indian reservations (where taxes are not assessed) or the growing black market (Nevada added a couple of positions in the Attorney General’s office three years ago specifically to combat the rise in black market smokes).

But wait - there’s more.

SCHIP is a matching program, so in order to spend the federal dollars that would be doled out to Nevada, Nevada families must come up with additional taxes. It’s a bit confusing, but here is a study from the National Conference of State Legislators (which tends left, so might be prone to understating costs) that includes this chart from the Congressional Budget Office (which also tends left, lately) that concludes Nevada is likely to get another $12-million or so from the expansion.

There is a 65% match required, so Nevada taxpayers will have to come up with another $6-million or so in order to comply with the new federal law.

So - within the fuzzy math that always guides efforts to forecast future changes in the complex federal-state dance, it looks like Nevada taxpayers will have to come up with around $12-million per year if the veto is overridden, $6-million in additional costs and $6-million in lost revenue.

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