October 19, 2006
Amendment 3 Could Make Smokers Pay More To Puff
It took a court order, but an initiative petition calling for increased taxes on tobacco products will be decided by Missouri voters on November 7th. Amendment 2 asks: “Shall the Missouri Constitution be amended to create a Healthy Future Trust Fund which will:
1. be used to reduce and prevent tobacco use, to increase funding for healthcare access and treatment for eligible low-income individuals and Medicaid recipients, and to cover administrative costs;
2. be funded by a tax of four cents per cigarette and twenty percent on other tobacco products; and
3. be kept separate from general revenue and annually audited?”
The ballot states that the proposed additional taxes will generate an estimated $351-$499 million annually for tobacco control programs, healthcare for low income Missourians, and payments for services provided to Missouri Medicaid beneficiaries and uninsured Missourians.
The issue has sparked debate between proponents of the proposed law change and those who challenge the impacts the new tax would have.
The Committee for a Healthy Future was created to generate support for Amendment 3. The group, made up of health care professionals, physicians, and health care organizations, is championing the law change as an effort to stop the spread of smoking while providing needed financial assistance for medical care for under-served Missourians. The American Lung Association, the American Heart Association and the American Cancer Society have all lent their support to the initiative.
“The Committee for a Healthy Future’s proposal provides funding for programs that treat smoking–related illnesses,” said Cindy Erickson, spokesperson and chief executive officer of the American Lung Association of Missouri. “More importantly, for the first time, we can fund programs that will keep our children from smoking.”
The committee points out that Missouri has the second–lowest tobacco tax rate in the country and, as a result, one of the highest rates of adult and teen smoking in the country. The proponents also state the constitutional amendment will ensure that funds generated will be protected from politicians and used only to address the deadly impacts of tobacco use and to provide increased access to health care services.
“This is a mainstream, common–sense approach to two of the state’s biggest health care issues, namely teenage smoking and access to critical health care services for the most needy Missourians,” said Katie Plax M.D., director, Adolescent Center, Department of Pediatrics, Washington University School of Medicine.
However not everyone shares the Committee’s belief that the tax revenue will be used as described.
According to Ronald J. Leone, Executive Director of MPCA, there are numerous reasons why Amendment 3 is a very bad idea, any one of which is sufficient to once again convince the majority of voters to reject the outrageous 470% tax increase.
“Amendment 3 is not about smoking or the dangers of tobacco. It’s about greed and the government wasting even more of our tax dollars. All you have to do is follow the money”, said Leone.
“Amendment 3 is an outrageous 470% tax increase, proportionally the largest in Missouri’s 185-year history. More than 82% of the tobacco tax increase is not required to be spent on tobacco related diseases or illnesses”, Leone continued.
“Instead, that same 82% fattens the wallets of the greedy hospitals, HMOs and drug companies that have bankrolled the massive and oppressive tax increase. These greedy private companies are trying to hoodwink voters into approving their very own constitutional slush fund”, said Leone.
“Since 2000, Missouri has wasted almost $1 billion in tobacco revenue that should have been spent on tobacco diseases and health care. A statewide problem such as health care requires a statewide solution and not the taxing of a targeted minority population by some well-heeled special interests. We’re confident that common-sense Missourians will once again see through this slick Madison Avenue style campaign and defeat this outrageous 470% tax increase”, Leone concluded.
Also opposing the proposed 80-cent a pack cigarette tax hike is, Missourians Against Unfair Taxes, a group of tobacco wholesalers and retailers in Missouri, who have organized to fight the proposal.
Group members say smokers are being unfairly targeted with a tax hike from 17 cents to 97 cents per pack – or $9.70 per carton. The taxes would fall entirely on consumers.
If Amendment 3 passes, the combined taxes on a carton of cigarettes would be nearly $15. The state taxes would be in addition to the $3.90 per carton federal tax and the cigarette taxes that dozens of cities impose in Missouri. In St. Louis, for example, the cigarette tax is 70 cents a carton. In Springfield, the tax is 50 cents a carton. Local and state sales taxes are also added.
The group claims the public was kept from participating in the drafting of the initiative petition. “The proposal was drafted in secret and the public was shut out,” said Jim Boeving, of Missourians Against Unfair Taxes. “The public was kept out because the proposal was designed by hospitals and doctors to benefit themselves.” Boeving operates Discount Smokes & Beer in Springfield.
The group points out that last year, the state took in $145 million in tobacco settlement money but spent nothing on tobacco cessation efforts. This has caused Attorney General Jay Nixon, who was involved in the tobacco settlement, to become a staunch opponent of Amendment 3.
Proponents warn voters not to be mislead by information being circulated in opposition to the amendment.
“Big tobacco and convenience stores have aligned to mislead and confuse the public about Amendment 3,” Erickson stated. “They have spent decades and billions of dollars to protect their profits by lying to the public so it comes as no surprise that they are at it again here in Missouri.”
At issue is the allegation that the State Auditor’s fiscal note on Amendment 3 commits taxpayers to $2 billion in additional expenditures. In truth, the auditor’s fiscal note and a September 11, judgment issued by Cole County Circuit Court Judge Thomas Brown and an October 11 decision by the Missouri Supreme Court reached the same conclusion—taxpayers would not be committed to expenditures beyond the revenue generated by the tax. Specifically, they stated:
“The actual level of spending will reflect the revenue realized through the increase in the tobacco tax.” (Auditor’s fiscal note, p. 8)
“The petition imposes a new tax on tobacco products, distributes only those proceeds and does not divert money from existing funds.” (Judgment, p. 5)
“We will never have the war chest Big Tobacco has to fight Amendment 3 in Missouri,” said Erickson. “But, we have the truth on our side. Amendment 3 will improve the future health of Missouri by lowering smoking rates, improving health care and keeping children from smoking.”