COLUMBIA — Missouri voters will be asked Nov. 6 whether to approve an increase to the state's tobacco excise tax.
Ballot language: Shall Missouri law be amended to:
- create the Health and Education Trust Fund with proceeds of a tax of $0.0365 per cigarette and 25 percent of the manufacturer's invoice price for roll-your-own tobacco and 15 percent for other tobacco products;
- use Fund proceeds to reduce and prevent tobacco use and for elementary, secondary, college, and university public school funding;
- and increase the amount that certain tobacco product manufacturers must maintain in their escrow accounts, to pay judgments or settlements, before any funds in escrow can be refunded to the tobacco product manufacturer and create bonding requirements for these manufacturers?
Estimated additional revenue to state government is $283 million to $423 million annually with limited estimated implementation costs or savings. The revenue will fund only programs and services allowed by the proposal. The fiscal impact to local governmental entities is unknown. Escrow fund changes may result in an unknown increase in future state revenue.
What does this mean? Proposition B is the latest manifestation of a long-running attempt to increase the excise tax on tobacco products in Missouri.
The proposal would increase the tax on tobacco products such as cigarettes, cigars and smokeless products and channel the revenue into K-12 and higher education funding as well as tobacco cessation programs.
How much money would it generate? As the fiscal note attached to the ballot language states, the taxes would generate an additional $283 million to $423 million per year.
What would be the actual impact on the cost of tobacco products? If passed, Proposition B would:
- Increase the per-pack tax on name-brand cigarettes by 73 cents, to a total of 90 cents. That would be a 429 percent overall increase from the current tax of 17 cent per pack, which is the lowest in the nation.
- Push the per-pack tax on value-brand cigarettes up to $1.47, an increase of 760 percent.
- Increase the tax on smokeless tobacco products such as "chew" and "snuff" by 150 percent.
- Establish an additional per-cigarette tax of 3.65 cents on roll-your-own tobacco products.
Where would the money go? The proposal specifies that 50 percent of the revenue generated by the new tax would go toward funding K-12 public education, with an additional 30 percent going toward higher education. The remaining 20 percent would pay for tobacco cessation and prevention programs.
What do supporters and opponents say? Supporters of the bill say the tax increase would make up for recent state cuts to higher education funding, create an opportunity to curb tobacco use and provide sorely-needed funding for tobacco cessation and education programs.
Opponents of the bill say that the tax increase is excessive, that it would cause Missourians to cross state lines to buy tobacco in neighboring states and that there is no guarantee the new taxes would lead to a net gain in funding for education and cessation programs.