St. Louis Post-Dispatch reporter, Tim O’Neil, wrote the following piece after the narrow defeat of the latest statewide effort to increase Missouri’s lowest-in-the-nation cigarette tax. The current 17 cents per pack tax goes back to a deal struck between former House Speaker Bob Griffin and former Tobacco Institute lobbyist John Britton, as described in an earlier blog.
I received some critical comments about this latest failure from other tobacco control supporters and am grateful for permission to publish the following, which contains some perceptive insights:
“The 2012 Prop B campaign was like 2006 all over again. The TV ads were too little, too late, and there was a gross under-utilization of the volunteers. There were yard signs available, but did you see any on anyone’s lawn? I didn’t see one of them (same as in ’06). Did information go home to parents via the students? I don’t know. I heard Ron Leone on Charlie Brennan’s show on KMOX and I’m sure he hit a home run with that audience. The only one from our side who disputed him was someone from K.C. Today, Ron Leone was back on Brennan’s show and Charlie told him in no uncertain terms that he was sorry Prop B went down, because he really wanted it to pass. Leone blamed our side and said that he offered to negotiate a “reasonable tax,” but no one would even take his call. He made it sound like our side was just too greedy.
So, our side has lost several million dollars (again) and who knows when there will be another opportunity to raise the tobacco excise tax. Until the nonprofits learn to communicate and use the resources they have available, we will continue to suffer these defeats.”
The Post-Dispatch article is reproduced below, followed by the two OpEds:
Missouri keeps tobacco tax as the lowest in the nation
By Tim O’Neil toneil@post-dispatch.com314-340-8132
November 07, 2012 – 10:30PM ET
Proposition – B – Approve Tobacco Tax – Ballot Issue
No 1,357,437 51%
Yes 1,314,856 49%
Missouri voters produced another razor-thin division on raising tobacco taxes, but strongly endorsed a Republican referendum on Obamacare and refused to change judicial appointments.
With complete but unofficial statewide results, the tobacco-tax issue, called Proposition B, was defeated narrowly. It was the third attempt in 11 years to increase state taxes on cigarettes and other tobacco products.
Missouri’s cigarette tax of 17 cents per pack is the nation’s lowest. The proposition would boost the rate to 90 cents per pack, still below the national average of $1.49.
“I’m a smoker and I think we’re already paying more than our share,” said Karen Watson, 58, of Lake Saint Louis.
Ron Leone of the Missouri Petroleum Marketers and Convenience Store Association, the opposition group, credited a narrow victory “to our ability to communicate with voters through our convenience-store education program.” The American Cancer Society had promoted the tax increase.
Similar efforts to raise it failed by narrow margins — 49 percent in favor in 2002 and 48 percent in 2006.
Campaigns for and against Proposition B replayed the previous efforts. The Cancer Society says raising the tax will encourage smokers to quit and generate money for education and health programs.
Opposition came from the Missouri Petroleum Marketers and Convenience Store Association.
Its vigorous advertising campaign avoided mentioning cigarettes, stressing instead that the tax would create a slush fund for Jefferson City politicians.
The vote showed Missouri’s traditional urban-country split. St. Louis and St. Louis County strongly supported it, as did Kansas City and Boone County, home to the University of Missouri-Columbia. Rural counties thrashed it.
The following two OpEds, con and pro the ballot initiative, were published in the St. Louis Post-Dispatch on October 16, 2012:
Ron Leone
By Ronald J. Leone
Proposition B’s outrageous and unfair 760 percent tax increase, the largest tax increase in Missouri’s history, is not about education or health care. It’s about greedy special interest groups, responsible tax policies, the proper size and scope of government and politicians wasting even more of your tax dollars.
Misleading statistics. Tobacco and health care statistics are irrelevant to the Prop B debate since not one single dime of Prop B is required to be spent on actually treating tobacco-related diseases. Not one single dime. Shouldn’t a “sin tax” be used to cure the “sin”?
Education money will be diverted — again. The state’s budget is a shell game, and there is no “lock box” guarantee that Prop B will actually increase education funding. Remember the broken education funding promises that came with the Lottery and casinos? Don’t be fooled again.
Everyone will pay the $67 million-plus tab. Prop B increases government spending by hundreds of millions of dollars per year, could be used to expand welfare and fund “Obamacare,” and a leading economist predicts a decrease in tobacco sales alone will decrease state and local sales and other tax revenues by at least $67 million per year. The middle class will pay this tab forever — just like always.
Slush fund for greedy political insiders. Prop B sets up a panel of nine unelected and unaccountable bureaucrats who control hundreds of millions of tax dollars. Prop B even allows these insiders to pay their friends and pocket this tax money.
Low taxes are a good thing. Low taxes on gasoline, alcohol and tobacco encourage cross-border sales from our higher-taxed border states, including Illinois, which drives economic development, creates jobs and generates much-needed local and state tax revenue. Increasing any tax when unemployment is high, housing prices are low and no one can afford to retire is a terrible idea.
Billions wasted. Since 2000, Missouri has spent $3.4 billion in tobacco settlement payments and taxes. Why trust politicians with even more tax dollars?
Opposed by Right to Life, Farm Bureau and others. Prop B is opposed by Missouri Right to Life, Missouri Farm Bureau, Missouri Family Network, Gov. Jay Nixon, Republican gubernatorial candidate Dave Spence and many others.
High tax rates. Using the tax rates in Columbia as an example, a consumer pays a 46 percent tax rate on a $3 pack of cigarettes ($1.39), 37 percent on a $4 pack ($1.47) and 31 percent on a $5 pack ($1.54). Taxes include 17 cents state tobacco tax, $1.01 federal tobacco tax and local and state sales taxes.
Only an out-of-touch politician or special interest group would dare argue that these tax rates are too low and should be massively increased.
Bad public policy. A statewide problem requires a statewide, broad-based solution. All Missourians benefit from core government services such as public education and thus all Missourians should pay a fair share and have “skin-in-the-game.”
Attempting to fund education by the majority taxing a minority population such as smokers is bad public policy that lacks serious leadership, reeks of political desperation and in truth, given the ever-decreasing funding source, does not generate nearly enough revenue to adequately fund education.
It would be like taxing railroad companies to pay for prisons or taxing hospitals to pay for roads and bridges. It just doesn’t make any sense.
Are you next? If you let the tax-and-spend fanatics put an outrageous 760 percent tax increase on smokers, then don’t be surprised when they tax something you do care about — guns, big sodas, gasoline, fast food or alcohol. At least now you can’t say you weren’t warned.
This is your kitchen table moment. You know when you’re home watching the news or reading the newspaper and you think, “Government is bigger and more out-of-control than ever” and “Politicians are only concerned about getting elected and not about solving problems”?
Well, this is your chance to do something about it.
All Missourians, smokers and nonsmokers alike, can agree that while education deserves to be adequately funded and tobacco deserves to be fairly taxed, Prop B’s outrageous and unfair 760 percent tax increase is simply too big and too dangerous.
Enough is enough. Please vote no on Prop B.
Ronald J. Leone is the executive director of the Missouri Petroleum Marketers and Convenience Store Association located in Jefferson City.
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Amy Blouin
By Amy Blouin
When it comes to making sure our state has the resources needed to prepare people for good jobs and preserve a strong middle class, Missouri is relying on a system that’s built to fail.
That has to change if we’re going to see real economic recovery and sustained growth in our communities. A good place to start is for Missouri voters to approve Proposition B on the Nov. 6 ballot. Prop B calls for increasing the tax on a pack of cigarettes to 90 cents from the current 17, and increased taxes on other tobacco products. Today, Missouri has the lowest tobacco tax in the country; under Prop B it still would be well below the national average of $1.46.
Prop B will generate $283 million annually in new revenue for Missouri schools and to fund smoking prevention and quit-assistance programs. Safeguards in Prop B, including an annual audit, ensure that the money goes exactly where it is supposed to go.
Generating new revenue sources is critical for Missouri. Today’s global economy requires a highly skilled and educated workforce, but over the past decade, state support for education has diminished. The “foundation formula” that allocates state education support to K-12 schools is $336 million below what the law requires, resulting in 8 of 10 school districts cutting classroom teachers. That’s not good for learning.
And in higher education, the decline in state support has caused the average tuition at Missouri’s public four-year institutions to nearly double over the past decade, to $7,033 a year from $3,597. Missouri now ranks 44th in the nation for the amount of state funding provided to higher education.
This is bad news for Missouri’s ability to provide workers with the skills they need and to attract businesses. As the Missouri Chamber of Commerce and Industry has said, “Economic development, more than anything, depends on a talented workforce. And developing that workforce begins in our classrooms.”
The worst recession in our lifetime devastated state revenues; on top of that, Missouri’s tax system is outdated. Without sufficient revenue, we have had multiyear cuts to essential services such as education. Missouri’s state general revenue spending, as a percent of the economy, is lower than it was in 1981. There are over a million more people living in Missouri today than 31 years ago; clearly we are failing to keep up with the need.
And at the current pace it will take way too long to catch up. State revenue when adjusted for inflation isn’t on course to reach its pre-recession level of purchasing power until 2029. In other words, a child born today will be finishing high school before Missouri is able to support education at the level state law requires.
Fortunately, by passing Prop B, Missouri will take a big step toward supporting education at the level we need. Half of the new cigarette tax revenue will go to K-12 schools to help prevent cutting classroom teachers and increasing class size; 30 percent will go to Missouri’s colleges and universities to help stem the rising cost of tuition and reduce student loan debt.
Missouri’s economic future is worth the investment.
Amy Blouin is executive director of the Missouri Budget Project, a nonprofit, objective, public policy analysis organization that provides independent research on complex state policy issues and how they impact all Missourians.
Missouri Group Against Smoking Pollution 