This November, Missourians will vote on whether to approve a cigarette tax hike.
The initiative, Proposition B, would put an extra 73 cents for a pack on cigarettes, increasing the total amount of the tax to 90 cents per pack. Missouri currently has the lowest tobacco tax in the country at 17 cents a pack.
Income tax free tobacco used to roll their own stores will be 25%t and 15% for other tobacco products.
If approved, Prop B would bring in about $ 283 million to $ 423 million a year according with the assessment of the state auditor. The funds will be divided between K-12 education, higher education and tobacco prevention and education programs.
Ron Leone, executive director of the Missouri Oil Marketers and Convenience Store Association, said Prop‘s 760% increase is destructive.
“It will hurt Missouri consumers, it will force small businesses to close, it will cause people to lose their jobs, and it will generate less tax revenue to local and state coffers, which are already at the limit because of the great recession,” Leon said.
Leone said that if the tax had been more reasonable amount allowing retailers to maintain their competitive advantage of the tax on the higher taxed countries abroad, he would support the proposal.
In 2002 and 2006, voters had the option of raising taxes on cigarettes, but both ballot measures failed.
20% of the proceeds from the tax would go to tobacco abstinence programs, 50% for K-12 education, and 30% to higher education.
Currently, the formula funding of schools is estimated to be $ 460 million under-funded, need formula will fund in full, the money will be distributed to schools based on the registration. This is different from how the money is usually distributed to school districts. The state uses the Foundation Formula to see how much each district receives is based mainly on attendance and local taxes, and at least 25% of the money in each school district must be used with respect to the direct costs of the class.
At the request of the Department of Higher Education: will be responsible for the distribution of funds for public colleges and universities, each institution receiving this funding should take it to a new or existing limited funds, these funds can only be used for education of future teachers, teachers of issues, improving the object, classroom instructional technology, and campus security at least 25% of the money allocated to be used for programs and initiatives related to education, training and development of future educators. This includes doctors, dentists, nurses and other health workers.
Otto Fajen, legislative director of the Missouri National Education Association, said his organization supported Prop B.
“It’s going to move the ball forward, so from the perspective of improving educational opportunities across the state, it is progress,” Fajen said.
Fajen said it is not a massive increase, when you think about how many students are in a state, but any help is important. He does not know why the performance initiative to funding for schools is different than the foundation formula.
Earlier this year, Governor Jay Nixon refused to take sides on the issue.
“I do not expect to be active in any way with this campaign, and we will wait for the verdict of Missourians this fall,” Nixon said on September 4.
Along with the presence of low taxes on tobacco in the country, Missourians have the 48th highest percentage of adult smokers to 2010 study by the Center for Disease Control and Prevention. In Missouri, 25 percent of adult smokers and 11.8 percent of people aged 12 to 17 are smokers.
Supporters of Prop B, as Rep. Chris Kelly, D-Columbia, for example, an increase in the tax on tobacco in Missouri and provide an important means of education.
“For the potential of teenage smokers, there is a strong correlation between the price and start smoking. And so, we know that the tax will generate revenue that we need, and we also hope that it will prevent teenage smoking,” said Kelly.
Opponents say that higher taxes will lead to loss of income. They are worried people will travel from Missouri to neighboring states with lower tobacco taxes, to buy cigarettes. If Prop B passes, half of the eight states of Missouri border will have higher taxes on tobacco.
“That argument has no intellectual basis, because the state, which has lower taxes, which are close to us just a tiny, little, bit lower,” Kelly said.
Sen. Jim Lembke, R-St. Louis, also spoke against the proposal. He says that there must be reform on issues such as tax benefits, before we tackle a tobacco taxes.
“We are making decisions in this state and those decisions are going the way of corporate welfare rather than the promises that we keep to fund our public schools,” Lembke said