The tobacco tax is perhaps one of the last “untapped” sources of revenue for the state. Currently, we have the lowest state tax on tobacco in the nation, at 17 cents per package of 20 cigarettes. Besides the state excise tax on cigarettes, there is a federal excise tax of $1.01 per pack. This makes the total cigarette excise tax—sometimes called a sin tax—in Missouri at $1.18 per pack. When adding together the price of the tobacco plus the sales tax, smoking equals a very expensive habit. For some, the idea to tax what is unhealthy and spend it on something that is more positive seems to justify a tax increase on a product like tobacco.
The American Cancer Society’s statistics show that while the national average of adult smokers is just under 18%, Missouri has a rate of 22% of adult smokers. Tobacco use claims the lives of almost 11,000 Missourians every year. However, perhaps the most staggering figure is the estimated $3-plus billion in economic and healthcare costs to our state. Included in this figure is $644.3 million in Missouri’s Medicaid expenditures that are directly related to smoking and tobacco usage. This translates into approximately $960 annually for each and every household in the state, smokers or not.
Unfortunately, Missouri ranks 50th among states in funding tobacco prevention and cessation programs. In 2014, our funding for these programs was only $70,788. Historically, when we have invested state monies in reducing tobacco use, it proves to be successful. From 2009 to 2013, Missourian’s adolescent cigarette usage declined by 4% among middle school students and almost 15% in high school students as a result of these programs. Comprehensive tobacco-cessation programs for adult smokers have been shown to help them quit the habit, ultimately saving lives and money. By reducing tobacco usage, many chronic health conditions, such as cancers, heart and respiratory diseases can be prevented. Nationwide, tobacco-control programs have been estimated to return $5 for every $1 invested.
For the last eleven years in our state there were three attempts to increase the state sales tax on tobacco products, but each time it was narrowly defeated. In 2012, Proposition B had 49% of voters favoring it and 51% opposing it. This proposal would have boosted the tax on a pack of cigarettes by an additional 90 cents, making Missouri state tax $1.07, still well below the national average of $1.49.
Missouri’s tobacco tax is the lowest at 17 cents per pack; New York’s is the highest at $4.35 per pack. The eight states surrounding our state each have tax rates much higher, as seen in the following: Arkansas - $1.15; Oklahoma - $1.03; Kansas - $0.79; Iowa - $1.36; Nebraska - $0.64; Illinois - $0.98; Kentucky - $0.60; Tennessee -$0.62. Should voters approve a tobacco tax increase, Missouri would be more in line with our neighboring states and would be creating funds for something everyone can agree on—helping children.
A ballot petition initiative being proposed is called “Raise Your Hands for Kids.” It seeks to raise the tobacco tax by 50 cents per pack and funds to be earmarked for early childhood development programs across the state. This proposal, if passed by voters, would collect the additional 50 cents per pack and then distribute the money to individual counties to be used for education and children’s health for kids up to five years of age. The intent of the initiative’s drafters is to put this on the ballot for the November 2016 General Election, reasoning that this is a presidential election year and turnout will be higher, and higher turnout will translate to a more favorable result. If passed, the 50 cents is estimated to create approximately $250 million annually in additional tax revenue.
Those in support of the initiative say that an increase in tobacco tax will do the following:
1) bring us more in line with our neighboring states
2) help children, especially the poorest children in our state
3)cause some smokers to quit because of the additional cost.
Those in opposition say:
1) It is a tax, and no matter how it is perceived, taxes are being raised.
2) The tax is assessed on the poorest of Missourians who are smokers.
3) If the tax increase causes less use of tobacco products, then there will be
fewer dollars available to fund these children’s programs.
Should the Missouri tobacco tax initiative make it through the petition process and onto the 2016 ballot, it will be up to voters to decide its fate.