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Tue October 23, 2012
Clearing The Smoke On Proposition B
Missouri currently has the lowest cigarette tax in the country. Now, a measure on this November’s ballot proposes changing that, raising it for the first time in two decades.
Does such an increase really stand a chance in the Show-Me state? Based on past experience, the answer is no, but supporters say they’ve learned their lessons. Not to mention, big tobacco appears to be staying out of this fight.
Shopping For Smokes At Red X
A pack of cigarettes in Missouri costs about $4, depending on the brand and the county.
One place that sells a lot of packs is Red X, a big general store in Riverside. Just ask Russell Hott, who’s worked behind the cigarette counter for three years.
“It’s a huge part of the business here. Cigarettes basically made this whole store what it is now,” says Hott.
Proposition B, an upcoming measure on Missouri’s November ballot, would raise the state’s cigarette tax from 17 cents a pack to an even 90 cents. It would also increase the tax on roll-your-own and other tobacco products.
The proposal doesn’t sit too well with several Red X shoppers.
“Taxes are killing us,” says Larry Gray.
“They’re already too high,” says Audie Ammons.
“It’s kind of outrageous,” says Sherri Jones, “Taxes on everything are going up.”
Opponents: Hurts Consumers, Sales Tax Revenues
Ron Leone, head of a trade group representing most convenience stores and gas stations in Missouri hopes to get customers like Gray, Ammons and Jones out to the polls in November. Leone’s been leading the main opposition to the ballot measure.
“It hurts small businesses, it hurts the consumer, it hurts all taxpayers because all of us will have to fill the hole of less sales tax that we’re generating as a result of this tax increase, and for me it just seems like a horrible idea and a bad thing to do for the state of Missouri,” says Leone.
Some off brand cigarette companies are also big backers of the effort. Leone says the proposed increase is too much and would make Missouri’s cigarette tax higher than four of its eight neighboring states.
Supporters: Missouri Has Low Tobacco Taxes, High Smoking Rates
Frank Chaloupka is an economist at the University of Illinois in Chicago who specializes in tobacco taxes. He says at 17 cents a pack, Missouri is far below the national average of a dollar forty nine.
“You know almost every other state has raised its tax, several have raised it multiple times, here in Illinois just raised it by a dollar a pack a few months ago. So it’s the kind of thing that’s been happening across the country. And Missouri is one of the few that hasn’t done that and has missed out on the benefits as a result,” says Chaloupka.
The last time Missouri raised its tax was in 1993. Two attempts to raise the tax since then failed in 2002 and 2006.
Misty Snodgrass, with the American Cancer Society’s state chapter, says an increase in Missouri is long overdue.
“We have the highest smoking rates in the country and the lowest tax, and I think that everybody knows we’re a breeding ground for cheap cigarettes, that are a deadly product and that the tobacco industry has become a windfall here in Missouri,” says Snodgrass.
Snodgrass has been leading the effort to raise the state’s tobacco tax. Other supporters include public school groups, the Greater Kansas City Chamber of Commerce, and health agencies like the Health Care Foundation of Greater Kansas city, which also funds health reporting on KCUR.
Proposition B Would Also Help Schools
Snodgrass says a higher tax would bring in needed revenue to the state and encourage people to quit – that would also reduce tobacco related diseases and associated health care costs. And she says state’s youngest residents would benefit most.
“We’re going to keep kids from smoking and provide much needed revenue to local public schools,” says Snodgrass.
If it passes, Proposition B would raise between $300 and $400 hundred million in revenue. The funds would mostly go to K through12 schools, and higher education, and then the rest to programs that help people quit smoking.
Snodgrass points out that previous tobacco measures that failed didn’t have an emphasis on schools.
Big Tobacco Doesn't Appear To Be Protesting
Brian Hatchell, is with RJ Reynolds’ the second largest tobacco company in the country – he says RJ Reynolds has long been active in opposing cigarette tax increases in Missouri and elsewhere, but the company isn’t putting up a fight this time.
“The Missouri ballot initiative is unique,” says Hatchell.
Hatchell says the latest ballot measure also eliminates a pricing advantage that off brand cigarette companies have long enjoyed in the state.
Currently, big tobacco companies must pay into an annual fund as part of a settlement made 15 years ago, to help cover the cost of smoking related diseases. But Missouri is the only place where off brand cigarette companies don’t have to set aside an equivalent amount.
“The Missouri ballot initiative eliminates a loophole in the law that’s created an uneven playing field for cig manufacturers and retailers in Missouri,” says Hatchell.
Big tobacco aside, supporters hope residents have had enough with Missouri’s cigarette tax being so low. A poll released in August by Public Policy Polling shows the ballot measure ahead, but with many still undecided. Opponents hope voters will realize the pitfalls of the potential a tax hike, like they did in previous elections.