Monthly Archives: November 2016

2016-11-28: A look back at Amendment 3

Amendment 3, which aimed to raise Missouri’s lowest-in-the nation cigarette tax by 60 cents a pack over four years, went down to defeat, 59.2% to 40.8% (or 1,609,953 votes to 1,107,716) on November 8th, 2016. At least 75% of the money raised was to have been dedicated to early childhood education programs, said to be currently underfunded, with some also going to early childhood health and smoking prevention programs. It would have closed a tax loophole which presently allows smaller tobacco companies not part of the Master Settlement Agreement to sell more competitively in the state.

The primary organizers of Amendment 3, Raise Your Hands for Kids, received $12.1 million of its nearly $13 million in contributions from Reynolds American tobacco. This was partly responsible for generating opposition from many tobacco control and smoke-free air advocacy groups, among others.

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Ron Leone

The amendment was also opposed by the Missouri Petroleum Marketers and Convenience Store Association, led by Executive Director Ron Leone. It wanted to protect the tax loophole currently enjoyed by smaller tobacco brands to maintain profits, and spearheaded a competing proposal, Proposition A.

This was for a more modest cigarette tax increase in increments totaling only 23 cents a pack by 2021 with revenue being deposited in the state’s Transportation Infrastructure Fund.

According to Ballotpedia, two tobacco companies benefiting from the current tobacco tax exemptions, Cheyenne International and XCaliber International donated a combined $4.8 million to the PAC supporting Proposition A and opposing Amendment 3.

On November 8th, Proposition A was defeated 55.3% to 44.7% (1,494,886 votes to 1,210,199).

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Dr. Anthony Pearson

There were strong arguments in favor of Amendment 3, such as those featured in an in-depth blog called The Skeptical Cardiologist by Anthony C. Pearson, M.D., of St. Luke’s Hospital in St. Louis.

Reviewing them makes me wonder if the defeat of Amendment 3 wasn’t a significant lost opportunity. At the same time, I believe the funding should have been specifically dedicated to reducing smoking prevalence in the state by proven successful advertising campaigns and helping smokers quit. Also the entire proposed cigarette tax increase – preferably a dollar rather than 60 cents – needed to go into effect at once, and not be spread over four years in 15 cent increments.

2016-11-03 StLotA: “Election 2016: Pros and cons of Missouri’s Proposition A, the 23 cent proposed tobacco tax”

I just listened to today’s St. Louis on the Air, devoted to discussing the two tobacco tax increase proposals on the November 8th ballot. I thought that Stacy Reliford of the American Cancer Society gave a fine performance against smooth-tongued Ron Leone, Executive Director of the Missouri Petroleum Marketers and Convenience Store Association, despite his being well armed with facts.

But he did better in the second half of the broadcast when debating Jane Dueker, an attorney representing Constitutional Amendment 3 (sponsored by Raise Your Hands For Kids, or RYH4K), a group advocating for early childhood education.

So far, I can only find a link to the first half of the broadcast at tinyurl.com/zcz7n49 and I’ve reproduced that below. You can listen to the full broadcast by going to the above link and scrolling down.

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Ron Leone

Note: Ron Leone has changed quite a bit since the black and white photo I have of him on file (at left), which I used in my blog of November 1st. But he still has considerably more hair than me, and he doesn’t look so evil now!)

“On Tuesday, Nov. 1, St. Louis on the Air hosted a moderated conversation in the Community Room at St. Louis Public Radio about Amendments 3, 4 and 6 as well as Proposition A. This was an effort to inform voters on statewide ballot issues they would see on Nov. 8.

The third part of the conversation centered on Proposition A, which would increase taxes on cigarettes and other tobacco products a total of 23 cents per pack by 2021. The proceeds of the tax would go to fund transportation infrastructure.

This measure is one of two tobacco tax-related measures on Missouri’s ballot. The other is Constitutional Amendment 3.

During this part of the conversation, we heard from one proponent and one opponent of Proposition A. Ron Leone, executive director of the Missouri Petroleum Marketers & Convenience Store Association, represented the “pro” side of the argument. Stacy Reliford, the Missouri Government Relations Director for the American Cancer Society Cancer Action Network, represented the “con” side of the argument.

Want an in-depth, objective analysis of what the amendment would do? Read this story from St. Louis Public Radio’s Jo Mannies: “Rival tobacco tax proposals focus all their energies on Missouri’s Amendment 3.

Below, please find major “pro” and “con” arguments summarized.

PRO: Ron Leone wants people to vote “Yes” on Proposition A. Here are his main points:

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Ron Leone is a proponent of Proposition A
Photo credit Kelly Moffitt, St. Louis Public Radio

The Missouri Petroleum Marketers & Convenience Store Association was tired of having to fight “outrageous and unfair” tobacco taxes every 2-4 years and hopes this incrementally increasing tax will reduce the need to fight such measures and protect the MPCA.

  • By 2021, the tax will have increased 135%, which is considered “fair and reasonable” because it will keep Missouri at a competitive tax advantage over our eight border states.
  • The tax will generate $100 million, which will go toward fixing Missouri’s roads and bridges. It does not solve lack of funding for MODOT, but would help.
  • There appears to be no other transportation funding fix coming down the pike.
  • People come to Missouri to buy cigarettes and other tobacco products, which generates sales tax, tobacco tax and motor fuels tax. This tax will ensure the state’s prices stay competitive so that people from other border states will still come here and spend money.
  • The proposition has a “rollback” clause that if anyone tries to pass another tobacco tax by initiative petition, this tax will revert to zero. The MPCA did not want to pass this proposition to protect itself one year and have it undone the next.
  • If both Proposition A and Amendment 3 pass, it is unclear what will happen: either the higher tax cancels the other tax out or the taxes will be cumulative. The courts will decide.

Essentially, Ron Leone wants people to vote “Yes” on Proposition A because he thinks smaller, incremental tax increases on tobacco will keep Missouri competitive and bring spenders here from other states while also garnering money to invest in transportation infrastructure.

CON: Stacy Reliford urges a “No” vote on Proposition A. Here are her main points:

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Stacy Reliford is an opponent of Proposition A
Photo credit Kelly Moffitt, St. Louis Public Radio

  • The amount of the proposed tax increase is not designed to reduce smoking. Only bigger, more substantial tax increases of $1 or more impact consumer behavior.
  • The proposition was written by those in the tobacco industry, and those who profit from selling cigarettes and consumers’ health was not in mind.
  • This will only move Missouri to being 49th instead of 51st in cheapest cigarettes in the country and that is holding all other tobacco prices constant.
  • It does not make sense to sell cigarettes to boost the state’s economy, when cigarette use in our state costs $644 million in Medicaid alone.
  • Per the proposition’s “rollback clause,” any other tobacco tax only has to make it on the ballot to be repealed — it doesn’t even have to pass. That could cut the transportation funding right away.
  • Not knowing the complete and total outcome of what this vote means — if the tax would or would not be compounded with Amendment 3 should they both pass — is dangerous for voters to approve.
  • This proposition is really about discouraging the state from ever raising taxes on tobacco enough to dissuade consumers from buying and using them.

Essentially, Stacy Reliford wants people to vote “no” on Proposition A because the tax will not effectively dissuade consumers from purchasing and using tobacco, which has proven harmful for people’s health and costly for the state.

Want to read more pro/cons about Missouri ballot measures? Read these perspectives about Constitutional Amendment 6 and  Constitutional Amendment 4.”

2016-10-31 P-D LTE: “Amendment 3 is not what it appears to be”

St. Louis Post-Dispatch Letters to the editor, Oct 31, 2016 (12 comments)

Amendment 3 is not what it appears to be

I thought surely I was having a bad dream when I read the Post-Dispatch’s support (Oct. 24) for Constitutional Amendment 3 — the Trojan horse masquerading as a worthy source of funding for early childhood health and education programs.

Ever since 2006 when the Missouri Stem Cell Amendment was passed, I have had a good dream — a bright and hopeful dream — of research that could result in cures for diseases such as type 1 diabetes, Parkinson’s and others. But the many strings attached to this amendment could set back earlier victories that opened the way for critical medical research. The fact that it is bankrolled by R.J. Reynolds Tobacco Co. should be a clue that this is not what it appears to be.

If the Post-Dispatch is so certain that its judgment trumps that of organizations such as Washington University, the American Cancer Society, the American Heart Association and many others of equal pedigree on record opposing the amendment, could it not at least make mention that others have thoughtful and legitimate reasons to take exception — and why?

While I would never dispute the need for funding for early childhood education, it seems clear that this is not the way to do it.

I urge voters to consider other editorial voices of the state’s major newspapers who see the proposition for the sham that it is.

Marianna Riley • Webster Groves

2016 ballot tobacco tax proposals: Vote No on both

There’s a heated debate going on regarding two dueling proposals on the November 8th ballot, Constitutional Amendment 3 and Proposition A, both aimed at raising Missouri’s present lowest-in-the-nation cigarette tax. I’m personally voting “NO” on both, as explained below, but I also list pro and con reasons provided by others.

First, it’s worth comparing our state’s tax with that of surrounding states and also provide some historical perspective:

Missouri's cigarette tax versus that in 8 adjoining states

Missouri’s 17 cents per pack cigarette tax versus that in the 8 adjoining states. Average of 8 = $1.05. New York, at $4.35, is highest nationally. 
Ref: tobaccofreekids.org

The current Missouri state tax is 17 cents a pack, agreed to in a deal in 1993 between former House Speaker, Bob Griffin (who was later indicted and jailed on bribery and other charges), and the late John Britton, the formidable lobbyist for the now-defunct Tobacco Institute. The agreement was to raise the tobacco tax by 4 cents for school nurses in exchange for not raising it further. (ref: 2010/11/24 P-D OpEd:”Cigarette Taxes – Missouri can’t afford to be last” .)

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Ron Leone

Several attempts to raise it significantly, in part as a way to deter smoking and cut smoking rates in Missouri, have met resolute and successful opposition. A leading opponent is Ron Leone, Executive Director of the Missouri Petroleum Marketers and Convenience Store Association (MPCA) (www.mpca.org/) since tobacco sales are important to his members. (See, for example, this 2012 blog “Missouri keeps tobacco tax as the lowest in the nation.”)

Below are detailed descriptions of the two tobacco-related measures with commentary added:

Constitutional Amendment 3 (Raise Your Hands For Kids, aka RYH4K):  
Cigarette tax primarily funding early childhood education (at least 75% mandated), childhood health programs (10%-15%), and smoking cessation and prevention programs (5%-10%).  The additional 60 cent cigarette tax, reached after 4 years in 15 cents/year increments for a total of 77 cents, would put MO at 39th place in the current state list, ahead of neighboring NB, KY, and TN.
In addition, an equity assessment fee of 67 cents per pack is being assessed on any “Non-participating manufacturer” in the Master Settlement Agreement (MSA), inflation adjusted up each year. (This applies to the smaller tobacco companies (see below) which were not included in the MSA with states Attorney Generals, which requires substantial annual payments to the states). 
I personally believe that any increase in cigarette taxes, which should be done as a single tax hike for maximum impact and not phased in, should be targeted towards the following goals:
1. Deterring would-be smokers from ever starting by aggressive anti-tobacco advertising
2. Large enough to persuade at least some smokers to quit, and perhaps
3. Offer subsidized or free quit smoking programs.
This will ensure that over time, provided the newly-funded programs are designed to be successful, the number of Missouri smokers and tax revenue raised from cigarettes will both fall in unison.
The largest financial supporter of this amendment is R.J. Reynolds, which I surmise had a hand in writing it, such as phasing in the tax increase over four years, and especially for adding the “equity assessment fee” of 67 cents per pack on smaller tobacco companies, on top of the 60 cent increase, in hopes of putting them out of business.  Normally, tobacco companies fight tooth and nail against proposals to raise tobacco taxes, but R.J. Reynolds has to date reportedly spent over $12 million supporting this initiative.
I’m not enthusiastic about using such taxes to fund unrelated programs, however worthwhile, because then you have a new source of funding (smokers) which this new program ideally will want to maintain.
In addition, Amendment 3 prohibits any money from being spent on issues relating to abortion, stem cells, and tobacco related research, as defined below:

Section 54(b). 2. …. None of the funds collected, distributed,  or allocated from the Early Childhood Health and Education Trust Fund shall be expended, paid or granted to or on behalf of existing or proposed activities, programs, or initiatives that involve abortion services including performing, inducing, or assisting with abortions, as defined in law, or encouraging patients to have abortions, referring patients for abortions not necessary to save the life of the mother, or development of drugs, chemicals, or devices intended to be used to induce an abortion. None of the funds collected … shall be expended, paid or granted to or on behalf of any abortion clinic, abortion clinic operator, or outpatient healthcare facility that provides abortion services, unless such services are limited to medical emergencies. No funds …. shall be used for human cloning or research, clinical trials, or therapies or cures using human embryonic stem cells, as defined in Article III, section 38(d). No funds … shall be used for tobacco related research of any kind.
Many
groups oppose the Raise Your Hand for Kids amendment, including Tobacco Free Missouri. Dena Ladd, Executive Director of Missouri Cures, listed them in an October 23rd, 2016, St. Louis Post-Dispatch OpEd: Why medical research advocates are so concerned about Amendment 3.  

For balance, here’s a link to an October 20th, 2016, St. Louis Post-Dispatch OpEd in support of RYH4K by Richard Patton, director of Vision for Children at RiskMore important than the well-being of our children?
It should also be noted that the St. Louis Post-Dispatch editorial board is recommending a YES vote on both Amendment 3 and Proposition A, after flip-flopping twice on Amendment 3 earlier in the year (see Riverfront Times Sept. 27th story critical of the Post-Dispatch).

A person I respect and former Missouri House member, who now heads a local group with divided views among its members, wrote to me as follows:
 
“Members who have fought year after year for investment in early childhood education are supporting it – they are tired of waiting for our General Assembly to address our outdated, unfair, and inadequate revenue system. While the General Assembly continues to tax cut year after year – a billion dollars in cuts over the past 15 years approximately – essential programs languish, and only three percent of our children are in high quality early childhood education. We are structuring ourselves to fail in so many ways!

Members who oppose Amendment 3 generally think it’s a ploy by Big Tobacco to make more money and that the early childhood advocates are being played. Several have a hotbutton issue that turns them against 3 – the definition of abortion in the ballot measure language, fears of some slippery slope on stem cell research (an argument that I do not find persuasive), wishes for a larger tobacco tax from a “what works in comprehensive tobacco control” perspective, etc.).”

Proposition A: 

The Missouri Petroleum Marketers and Convenience Store Association (MPCA), a trade group representing many independent gas stations and convenience stores, is leading the opposition to Amendment 3 and is backing a competing – and substantially smaller – cigarette tax, phased in over four years, that will appear on the November ballot as Proposition A. Not surprisingly, it leaves in place the current exemption for any “Non-participating manufacturer” in the Master Settlement Agreement which are specifically targeted in the competing RYH4K ballot initiative.

The two major financial supporters of this proposal are reportedly North Carolina-based Cheyenne International and XCaliber International of Oklahoma. Cheyenne (Brands: Aura, Cheyenne, Decade) has sent $2.8 million to the fight, while XCaliber (Brands: Echo, Exeter, Edgefield) has contributed $2.9 million.

Under Proposition A, the additional tax on a 20 pack of cigarettes will increase over a period of four years as follows:

13-cents-per-pack on January 1st, 2017, i.e. 30 cents total state tax
An additional 5-cents-per-pack on January 1st, 2019, to 18-cents-per-pack for 35 cents total
An additional 5-cents-per-pack on January 1st, 2021, to 23-cents-per-pack for 40 cents total

These increases will not apply to inventory as of December 30th in any previous year.

In addition to leaving in place the current pricing windfall of the brands mentioned above, what renders Proposition A totally unacceptable is the following language it contains:
 
6. The additional taxes levied in subsections 1 and 2 of this section shall immediately, automatically and permanently be repealed and reduced to zero under any of the following events:
(1.) In the event any tax or fee increase on some or all cigarettes or other tobacco products is officially certified to be placed on any local or statewide ballot by the Secretary of State or any other election official at any time; or
(2.) In the event any provision of subsections of 1 through 9 of this section is ruled null and void, invalid, unlawful, severable or unconstitutional for any reason by any state or federal court of law. 
 
What this means is that if a political subdivision at any level even works to put an increase on the ballot, the state cigarette tax levied through this amendment is repealed.  This has been described as a poison pill.  There will never be an increase over this amount without this proposed increase being nullified.  
Unsurprisingly, Proposition A leaves in place the current exemption for a “Non-participating manufacturer” in the Master Settlement Agreement which is targeted in the competing RYH4K ballot initiative.