Tobacco tax stirs impact debate

Supporters say that it does not create an ‘unfunded mandate.’
Tuesday, October 31, 2006 | 12:00 a.m. CST; updated 9:11 p.m. CST, Tuesday, January 24, 2012


With a week left until the general election, the sides for and against the proposed tobacco tax increase are still in heated debate about what an amendment to the state constitution to achieve that goal would mean.


Supporters of Amendment 3 say amending the constitution is necessary to ensure the money will go toward the intended smoking-cessation programs. But opponents ar-


gue the tax won’t generate enough money to pay for these programs.


If Amendment 3 passes, the state’s tax on a pack of cigarettes would increase by 80 cents, to 97 cents from 17 cents. The tax on other tobacco products, such as cigarette papers, smokeless tobacco and cigars would jump to 30 percent from 10 percent.


Nearly 17 percent of the new revenue would be used to finance anti-smoking programs, and the other 82 percent would go toward providing health care services for people with incomes that are twice as low as the federal poverty level. Some of this money would also help pay physicians, clinics, ambulance services and emergency departments that treat Medicaid patients and uninsured Missourians.


On Oct. 11, the state Supreme Court ruled that, if the amendment passes, the only money that will be required to go to these programs will be the estimated $351 million to $499 million generated by the tax.


But Ron Leone, executive director of the Missouri Petroleum and Convenience Store Association, said he still thinks the ballot language creates an unfunded mandate by guaranteeing that everyone whose income is two times below than the federal poverty level will have access to health care.


“There is no way in heck that a judge when this is litigated is going to say, ‘OK, you only have to fund up to a certain point,’” Leone said. “It’s just like our fundamental right to a free public education. It doesn’t matter how much money is there, everybody is entitled to a free and well-funded public education. When you put it in inside the constitution, you cannot discriminate by virtue of running out of money.”


Cindy Erickson, executive director of the Committee for a Healthy Future, the group that proposed the increase, said the money would helping people who previously lacked access to health care but that it’s not guaranteeing they will be fully funded.


“It’s not about fixing problems,” Erickson said. “We’ve got a major Medicaid problem that needs to be addressed, and Amendment 3 isn’t about addressing that problem. Anybody that meets that criteria will be helped because they’re uninsured right now. It’s helping improve their access to services that they currently don’t have. Much of it is important from the prevention side of it, versus them using the ER as their doctor.”


Since 2000, more than 42 states have significantly increased their tobacco taxes to generate revenue, according to the Washington-based Federation of Tax Administrators.


Missouri hasn’t increased its tax since 1993, when voters passed an initiative to increase the rate on a pack of cigarettes to its current 17-cent level from 13 cents.


In 2002, Missouri was one of more than a dozen states to propose such an initiative, but voters narrowly defeated it. At the time, the state’stobacco tax ranked 41st in the nation. Now, the state’s tax ranks second to lastbehind South Carolina.


Erickson said she attributes the earlier rejection of a proposed increase in 2002 to the fact that voters didn’t trust politicians to properly handle the money. This is why the 80-cent increase would be built into the state’s constitution, she said.


“Voters want accountability on how the funds will be spent,” Erickson said. “They don’t trust politicians to do what they’re intended to, and we’ve seen that in other examples with the lottery money and education. We went the route of a constitutional amendment because that will provide the best protection possible to these funds.”


But Leone said Missouri politicians should be able to adjust the funding if necessary.


“If you put it into the constitution and you have an emergency situation where things need to be modified, it can’t happen quickly,” Leone said. “Do you really not want our elected officials to have the power of the purse? These are the people that have a public duty to spend money wisely and run our state in a fiscally responsible way.”


Erickson said the state’s improper handling of the money it has received from the tobacco settlement is enough proof that politicians can’t be trusted. According to a report released in March by State Auditor Claire McCaskill, the state had received payments of more than $965 million through June 2005.


In that report McCaskill said that Missouri has not adequately spent its tobacco settlement money, noting that about 69 percent of the windfall was transferred to the state’s general fund and used to cover state budget shortfalls. Only $1.8 million was spent on tobacco-related programs, she said.


Frank Chaloupka, a tobacco control policy researcher at the University of Illinois at Chicago, said most other states that have increased their tobacco taxes have done so through statutes, not constitutional amendments. But he said it makes sense for Missouri to try the amendment because it’s one of only two states that has ever voted down a proposed tobacco-tax initiative.


“Every other state has passed such initiatives overwhelmingly,” Chaloupka said.


Opponents argue that not enough of the money will go to smoking-cessation programs and that too much will fall into the pockets of the hospitals and doctors.


“More than four out of the five dollars of Amendment 3 isn’t for smoking programs, and if that isn’t the biggest red flag,” Leone said. “The primary motivation is greed.”


But Erickson said the money was distributed this way based on estimates provided by the Centers for Disease Control and Prevention for what it takes to fund a successful anti-tobacco program.


“The CDC gave us a recommended range on what we should be spending, so we decided to go smack dab in middle of the range they gave us,” Erickson said.

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