Guess Who Supports And Who Opposes Tax Increases On Cigarettes In Missouri

Nov 3, 2016

For many Missouri health advocates, an increase in the state’s tobacco tax is long overdue.

At 17 cents per cigarette pack, it’s the lowest in the country by far – a fraction of the tax in many states. And it hasn’t changed since 1993.

Groups like the American Lung Association say Missouri’s low cigarette prices are a major reason the state has one of the highest smoking rates in the country. Twenty-two percent of Missouri adults smoke, according to the Centers for Disease Control and Prevention.

On Nov. 8, Missourians will decide whether to approve not one but two tobacco tax increases. Perversely, however, health groups are urging voters to leave the tax unchanged while tobacco companies are spending a fortune to get the increases passed.

The tax increase is being promoted as a way to expand early childhood education. In Missouri, just 19 percent of 4-year-olds attend a preschool or Head Start program.

To early childhood education advocate Linda Rallo of St. Louis, a small tax increase seemed like a no-brainer. But then she took the idea to lawmakers in Jefferson City.

“We had big, right-leaning people mocking us,” Rallo says. “It was rough.”

So Rallo and others decided to go directly to voters with a ballot measure. Their polling showed voters might be O.K. with an additional 60 cents a pack.

They figured their plan – a constitutional amendment known as Amendment 3 on the ballot – would generate around $300 million a year, mostly to fund early education and the rest going to smoking cessation programs and children’s health care.

Rallo says her group reached out to enlist the help of health organizations like the American Lung Association. But there was a problem: the groups said the tax increase was too small to make a difference in smoking rates.

“Raising prices of tobacco products, we know, is the most effective way to prevent people from starting to smoke, to help people not get addicted to tobacco products, and for those who are smoking, to help them quit,” says Doug Luke, director of the Center for Public Health Systems Science at Washington University in St. Louis, which has gone on record opposing Amendment 3.

Ashley Ray of the American Lung Association leads a free smoking cessation class at reStart, a homeless shelter in Kansas City.
Credit Alex Smith / Heartland Health Monitor

Amendment 3’s schedule of gradually introducing the tax over four years also would keep it from changing smoking habits, according to the American Lung Association.

Rallo says talks with health groups broke down.

“It was basically, ‘It’s my way or the highway.’ So we took the highway,” Rallo says. “And when you’re going down the highway, you might pick up an interesting companion.”

That “interesting companion” turns out to be tobacco giant R.J. Reynolds. The company offered to help, and a company spokesperson says its support of Amendment 3 – to the tune of more than $12 million – marks the first time Reynolds has supported a cigarette tax.

That pits Big Tobacco against smaller cigarette manufactures known as Little Tobacco. As part of a huge settlement Big Tobacco entered into with 46 states in 1998 over smoking-related health care costs, Big Tobacco has to pay Missouri a special fee that smaller companies don’t. Rallo says this allows Little Tobacco to undercut companies like Reynolds.

“You have such a low price on cigarettes – such a discount price that it’s very easy for low income people to buy cigarettes,” Rallo says.

Amendment 3 creates an extra 67-cent tax on these brands that Rallo says would stop them from being able to sell at bargain-basement prices.

Little Tobacco fired back with a different ballot measure. It would create a smaller tax – 23 cents a pack on all brands -- so the small companies’ cigarettes would remain cheaper than those of Big Tobacco.

Two smaller cigarette makers, Xcaliber International and Cheyenne International, have donated nearly $5 million in support of the smaller tax.

Some of the strongest opposition to Amendment 3, however, has come from groups like Missouri Cures, a medical research coalition. Missouri Cures executive director Dena Ladd says the group was pulled into the debate.

“We did not want to get involved!” Ladd says. “We had no choice.”

Ladd says the group was caught off guard by the small print of the amendment – language that doesn’t appear in the ballot summary – which prohibits any of the tax proceeds from being used for stem cell research.

Ladd says it’s troubling that such language might become part of the Missouri Constitution since it could be used as leverage in other legislation to cut or ban stem cell research.

“We feel it could chip away at what we put in the Constitution back in 2006 safeguarding stem cell research,” Ladd says.

Other groups have different concerns, namely about the amendment’s ban on using the tax proceeds for abortions or for tobacco research.

Rallo says those restrictions were added to enlist greater support for the amendment.

“How do you come up with a policy that everyone can live with, basically?” Rallo says.

Many education advocates aren’t happy with how the funds are to be used either. Rather than going to public schools, the money will be made available in the form of grants that could go to religious or private education groups.

Rallo says these groups run a lot of pre-K programs, and in many parts of the state they’re better positioned than public schools to expand.

With so many groups that would ordinarily support a cigarette tax increase opposing the amendment and so many groups that would ordinarily oppose an increase supporting the amendment, it’s no wonder people are shaking their heads.

“This becomes very confusing to the public,” says Luke, of Washington University. “They see multiple bills on the ballot. They hear that public health groups are arguing about this. And even the tobacco industry is fighting itself, which is very unusual.”

Groups like Tobacco Free Missouri, the Health Care Foundation of Greater Kansas City and Campaign for Tobacco-Free Kids have joined opponents of Amendment 3. They fear that a small tax increase right now might diminish the chance to pass a tax that would really make a difference.

“There is a sense here of, at some point we need to get something passed,” Luke says. “But that’s not how you do sound policy. And essentially, we don’t want to say, ‘Oh we’re tired of this, so let’s just accept this watered-down ineffective policy.’”

Apparently, voters agree. A recent poll by the St. Louis Post-Dispatch shows little support for either measure – the one supported by Big Tobacco or the one supported by Little Tobacco.

Alex Smith is a reporter for KCUR, a partner in the Heartland Health Monitor team. You can reach him on Twitter @AlexSmithKCUR