KANSAS CITY, Mo. -- Missouris cigarette tax is the lowest in the nation, and that has some people doing a slow burn.
At 17 cents per pack, Missouris tax is nearly half as much as the next lowest and well below the $1.49 national average. In Kansas, the tax is 79 cents a pack.
All that could change on Nov. 6, however, when voters get another chance to decide whether to raise the tax to 90 cents per pack and make Missouris cigarette tax the 33rd highest in the country.
If it wins approval, Proposition B is projected to generate $283 million to $423 million a year in additional tobacco tax revenue, which would be directed to a fund aimed at K-12 schools, higher education and smoking cessation programs.
Raising the tobacco tax is one of the most effective ways to reduce smoking rates and prevent our youth from ever starting, said Misty Snodgrass, government relations director for the American Cancer Society. Its also a revenue win for our underfunded public schools and universities.
But opponents argue Proposition B would hurt sales tax revenue for state and local government and drive business to neighboring states.
This would put small businesses in Kansas City at a disadvantage, which is horrific public policy, said Ron Leone, who is running the oppositions campaign for the Missouri Petroleum Marketers & Convenience Store Association PAC.
Voters rejected tobacco tax hikes in 2002 and 2006. Both years, the nations biggest tobacco companies spent millions to oppose the increase. But this time around, those same companies have said they are sitting out the campaign.
Big Tobacco is standing down this year because they support Proposition B. They support it because it reduces their competition, Leone explained.
Thats because in addition to increasing taxes on tobacco products, Proposition B also would eliminate a pricing advantage that off-brand cigarette companies currently have in Missouri.
In 1998, Missouri was one of 46 states that entered into a legal agreement with cigarette makers forcing them to pay into a state fund to help cover the cost of smoking-related diseases. Companies that didnt sign the agreement still pay into the fund, but through a loophole in the law get their money back at the end of each year.
Missouri is the only state that hasnt closed the loophole.
This ballot initiative eliminates a loophole in the law that has created an uneven playing field for cigarette manufacturers and retailers in Missouri, said Bryan Hatchell, a spokesman for Reynolds American Inc., a major manufacturer of tobacco products. Primarily for this reason, Reynolds American Inc. has no plans to oppose the Missouri ballot initiative.
Leone said the passage of Proposition B would mean off-brand cigarettes could cost customers as much as 57 cents more per pack, in addition to the new increased tax.
In one fell swoop, Big Tobacco can reduce or eliminate their competition, Leone said.
Money for schools
Snodgrass said the decision to use the additional revenue generated by the proposed tax increase for public schools and higher education is a key difference from previous efforts and a big reason why supporters are so optimistic it will succeed this time.
We know that Missourians support their local public schools, she said.