7/31/2019 This Week's Stouffer Report: Ballot Preview: Cigarette Tax (Proposition B)

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October 9, 2012

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Ballot Preview: Cigarette Tax(Proposition B)

Among the items on the November ballot is onethat would raise taxes on tobacco products.

Proposition Bproposes a 760 percent increase tothe cost of a pack of cigarettes of 73 cents, from17 to 90 cents. Missouri currently has the lowesttax on cigarettes in the country. In addition,

other aspects of the tobacco industry such ascigarette papers, loose tobacco and cigars would also see a raise in taxes. The beneficiarywould be education funding.

On the Nov. 6 ballot, folks will see this:

Official Ballot Title

Proposition B[Proposed by Initiative Petition]

Official Ballot Title:

Shall Missouri law be amended to:

Create the Health and Education TrustFund with proceeds of a tax of $0.0365

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per cigarette and 25 percent of the

manufacturer's invoice price for roll-your-own tobacco and 15 percent for othertobacco products;Use fund proceeds to reduce and prevent

tobacco use and for elementary,secondary, college, and university publicschool funding; andIncrease the amount that certain tobaccoproduct manufacturers must maintain intheir escrow accounts, to pay judgmentsor settlements, before any funds in escrowcan be refunded to the tobacco productmanufacturer and create bondingrequirements for these manufacturers?

Estimated additional revenue to stategovernment is $283 million to $423 millionannually with limited estimated implementationcosts or savings. The revenue will fund onlyprograms and services allowed by the proposal.The fiscal impact to local governmental entitiesis unknown. Escrow fund changes may result inan unknown increase in future state revenue.

Fair Ballot Language:

A yes vote will amend Missouri law to createthe Health and Education Trust Fund withproceeds from a tax on cigarettes and othertobacco products. The amount of the tax is$0.0365 per cigarette and 25 percent of themanufacturer's invoice price for roll-your-owntobacco and 15 percent for other tobaccoproducts. The Fund proceeds will be used toreduce and prevent tobacco use and for

elementary, secondary, college, and universitypublic school funding. This amendment alsoincreases the amount that certain tobaccoproduct manufacturers must maintain in theirescrow accounts, to pay judgments orsettlements, before any funds in escrow can berefunded to the tobacco product manufacturerand creates bonding requirements for these

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manufacturers.

A no vote will not change the current Missourilaw regarding taxes on cigarettes and othertobacco products or the escrow account and

bonding requirements for certain tobaccoproduct manufacturers.

If passed, this measure will increase taxes oncigarettes and other tobacco products.

Supporters of Proposition B say the tax hikewould help some folks to stop smoking, plus itwould give more money to our schools.

Opponents claim any tax increase, especiallygiven our economy, is bad. On the other hand,they also point out how an uneven playing fieldcould be created with the passage of this taxraise. Theres wording in the tobacco settlementof 1998 that requires tobacco companies tocontribute millions of dollars each year toMissouris Medicare fund. However, the AllocableShare Release excludes those companies

created, since the settlement was made 14years ago. By revoking this loophole, smaller

and newer tobacco sellers would have to providethe same amount of money every year as theso-called big tobacco companies.

While education is a worthy cause, I will voteno on this issue, because now is a terrible timefor such a large tax increase.

Next week, I will tell you about the finalproposition (Proposition E) you will see on Nov.

6.

Senator Stouffer serves the counties of Carroll,Chariton, Cooper, Howard, Lafayette, Macon, Ray,

Saline, and a part of Clay.

If you have questions or comments about this or any

http://www.tobacco.neu.edu/tobacco_control/resources/msa/http://www.tobacco.neu.edu/tobacco_control/resources/msa/http://www.tobacco.neu.edu/tobacco_control/resources/msa/

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other issue, please call toll free (866) 768-3987 or bye-mail atbstouffer@senate.mo.gov.

bstouffer@senate.mo.gov | www.senate.mo.gov/stoufferState Capitol, Room 332, Jefferson City, MO 65101 | (866) 768-3987

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