Opinion: Amendment 3 Is Loaded With Benefits For Big Tobacco, Harms Missouri Public K-12 Education, Health, Medical Research

We Deserve Better released a comprehensive analysis Tuesday that clearly shows Big Tobacco will be the big winner of the flawed Amendment 3 tax increase scheme, while public K-12 schools, health, patients and medical research in Missouri will lose big.

We Deserve Better did a line-by-line analysis, titled “Big Tobacco Tax Initiative: What It Says, What It Does,” that allows voters to see for themselves what Amendment 3 actually says, along with an accompanying explanation of what the language that would become permanently enshrined in our state constitution really does. A link to the analysis is available at the end of this press release.

“It’s important for Missourians to get the real facts about what this flawed constitutional tax increase would do if voters were to pass it in November,” said Bradley Ketcher, deputy treasurer of We Deserve Better, a political action committee. “Amendment 3 is loaded with benefits for Big Tobacco, including banning the funding of research into the harmful effects of smoking and banning public advocacy for stricter tobacco laws. It creates a huge new bureaucracy in Missouri, and it allows a raid on public school funds by a panel of unelected bureaucrats. It has unacceptable long-term implications for patients and medical research – the list goes on and on and on.”

Among highlights of the 7-page analysis, Amendment 3 would:

• Undo Missouri’s century-old constitutional ban on giving public money to religious and private schools.
• Ban funding of research on the harmful effects of tobacco smoke, including its impact on young children.
• Forbid people or groups that receive funding from advocating for further controls on tobacco products. In short, it would silence Missouri Department of Health and local public health officials on tobacco policy.
• Put control of some state and local policy decision in the hands of the federal government.
• Rename a state bureaucracy for no apparent reason, creating high costs for signs, logos, stationary, webpages, business cards, trinkets etc.
• Undermines the 2006-voter approved Stem Cell Research and Cures Constitutional Amendment and narrows its protections.

North Carolina-based RAI Services, the parent company of R.J. Reynolds Tobacco, maker of Camel, Pall-Mall and Newport cigarettes, has already spent and pledged more than $8 million to change Missouri’s constitution with Amendment 3, slated for the November statewide ballot. Big Tobacco has provided more than 90 percent of the financial backing to date to support the amendment.

“It’s clear that North Carolina-based Big Tobacco seeks to amend the Missouri Constitution to benefit itself. Early childhood education supporters and Missouri citizens are just pawns in their game,” Ketcher said. “We encourage voters to read the analysis.”

Public education, health, medical research and patient groups are among those opposing Amendment 3. These groups have equally diverse concerns, ranging from the funding and drafting of the measure by Big Tobacco to the impact on public K-12 education, health, as well as medical research and treatments in our state.

In addition to We Deserve Better, those publicly opposing the initiative are: American Cancer Society Cancer Action Network, American Heart Association, American Lung Association in Missouri, BioSTL, Campaign for Tobacco-Free Kids, Concerned Women for America of Missouri, Health Care Foundation of Greater Kansas City, Missouri Alliance for Freedom, Missouri Association of Rural Education, Missouri Biotechnology Association, Missouri Cures, Missouri National Education Association, Missouri Retired Teachers Association, Stowers Institute for Medical Research, Tobacco-Free Missouri, United for Missouri and Washington University in St. Louis.

Teachers Groups Oppose Missouri Tobacco Tax Initiative

The Missouri Retired Teachers Association and Public
School Personnel (MRTA) Board of Directors has unanimously voted to oppose the tobacco tax increase known as "Raise Your Hand for Kids" (RYH4K).   MRTA is a statewide grassroots advocacy association of over 25,000 retired educators as members.

"We join a host of other education groups throughout Missouri who oppose this dangerous plan to move public tax dollars to religious and private schools through a voucher program," said Jim Kreider, Executive Director. "If this battle sounds familiar, it is because we in the education community have been fighting this transfer of tax dollars to private schools for years." Kreider went on to say, "The RYH4K initiative is extremely flawed in that it undermines the constitutional prohibition of tax dollars being distributed to religious and private schools and takes away the responsibility of the Missouri Legislature to manage and fund public education. RYH4K creates a non-elected/appointed commission to manage and fund the Early Childhood Program with very little accountability, this creates a dangerous precedent for Missouri. Non-elected commissioners are not accountable to the voters and taxpayers of Missouri and may seek to promote their own private agendas."

Raise Your Hand for Kids is funded by RAI, better-known as the parent company of RJ Reynolds.  The cigarette manufacturer has spent nearly $2.4 million to place the issue on Missouri's ballot in November. RAI and Saint Louis Billionaire  Rex Sinquefield's Gate Way Group share the same lobbyists in Jefferson City. MRTA and Gate Way Group have been on the opposite sides of education reform proposals for several years.

MRTA joins the Missouri Association of Rural Education (MARE) and the Missouri National Education Association (MNEA) in opposing the initiative petition.

"Big Tobacco Companies and Billionaires should not  be dictating the education of Missouri's public school children."  Kreider summarized.

Pre-filed bill revisits an increase in the cigarette tax

By Taylor Beck

(MDN News) -- Sen. John Lamping, R-Ladue, pre-filed a bill calling for an overhaul of certain state taxes.

Lamping's bill would increase the cigarette tax, lower the income rate to a flat 4 percent rate, and increase the state's sales and use tax.

Lamping said he expects the language of the bill to change greatly through the 2013 legislative session, and that the cigarette tax portion is not his main focus.

"The bill is about raising revenue, cutting taxes to a greater degree, and dedicating revenue to infrastructure. I just chose to put the cigarette tax bill inside this bill, and if it comes out of the bill it comes out of the bill, it's not a priority," Lamping said.

In the November election, voters shot down a proposal to raise Missouri's cigarette tax by 73 cents to 90 cents per pack. The defeat was the third time in a decade Missourians have rejected a cigarette tax increase.  

Ron Leone, executive director of the Missouri Petroleum Marketers and Convenience Store Association, led the opposition to the cigarette tax increase in November. He said this proposal is still too high.

Leone did add that there were certain provisions to this bill that were more agreeable than those in the failed Proposition B.

"While we want to be cautiously optimistic, at this point in time we're going to have to oppose due to the sheer size of it," Leone said.

Opinion -- Proposition B: The Right Thing to Do for Missouri's Children

 by State Rep. Chris Kelly
Missouri voters will soon decide whether to increase Missouri's tobacco tax from 17 cents a pack (lowest in the nation) to 90 centsan increase that would still place us nineteenth lowest in the nation. Fifty percent of the revenue will go to public elementary and secondary schools, 30% to higher education, and 20% for smoking cessation and healthcare programs. I sponsored a similar bill in the legislature and am a strong supporter of the tobacco tax increase, which will appear on the November 6th ballot as Proposition B.

Proposition B provides an opportunity to achieve several important results:

    €  Smoking will decrease
    €  Fewer Missouri young people will begin to smoke;
    €  Fewer Missourians will die from smoking-related diseases;
    €  Missouri will see lower Medicare and healthcare costs; and
    €  The estimated $283 million increase in revenue will go to our most pressing needs
        - $162 million new dollars for public Elementary and Secondary education;
        -   $85 million for our public institutions of Higher Education; and
        -   $56 million for smoking cessation and healthcare.

Criticisms of Proposition B aboundfrom threatened loss of businesses and jobs, to loss of state revenue from those purchasing tobacco products across state lines, to unfairly targeting smokers. These are desperate claims without merit. One criticism of Proposition B invoked by the tobacco lobby deserves further analysis.  That is, whether the additional revenue generated for education would simply offset the general revenue (GR) that would have gone to education, resulting in no effective increase in overall educational funding. You may have heard ads referring to the likelihood of money going in the "front door" and out the "back door"a criticism that has often been levied against lottery funds. In budget parlance, this is called "supplanting"where money is used from one source to take the place of money from another source. Supplanting would mean that no net addition of funds to education or healthcare would result.

The legal restrictions outlined in Proposition B and the protection given to education in the Missouri Constitution undercut this criticism. Nonetheless, I want to address this issue as fairly and as accurately as I can.

Supplanting can take several forms:

1.  Direct supplantation would occur if Prop B funds were placed into the General Revenue Fund, rather than into the Health and Education Trust Fund as mandated by law. This form of supplantation is neither legally possible nor politically plausible. By law, money placed into the special Health and Education Trust Fund can only be used for the three purposes set out in the lawElementary and Secondary Education, Higher Education, and Smoking Cession/Healthcare. The language specifically says that any balances in the Trust Fund "shall not revert to the general revenue fund."

2.  Indirect supplantation refers to supplanting in its most common form, a situation in which the legislature would reduce the amount of money now going into the General Fund for education by some amount because of the increases coming from Prop B‹the so-called "back door" approach. The plain language of Proposition B prevents this form of supplanting. For the Legislature to do this would be illegal.

Such supplanting of funds is also not politically feasible. First, education enjoys a Missouri constitutional preference in that, after public debt, education must receive priority funding. Second, the natural inclination of legislators is to fund education at the highest possible level, given revenue constraints. The political forces one would have to confront to reduce the amount of General Revenue currently going to education would be overwhelming. Even a suggestion of the taking of current GR from schools would result in a firestorm of opposition to legislators both from within and beyond their own party, inviting electoral disaster. Third, the amendment requires that the state auditor shall perform an annual audit of the fund, including "an evaluation of whether appropriations for tobacco-related programs and elementary, secondary, and higher education have increased." The state auditor is obligated to make copies of each audit available to the public and to the General
 Assembly.

3.  Supplanting through erosionIt is technically possible that, in future years some amount of General Revenue that would have gone to Higher Education, for example, might instead be used to deal with other state issuesthe dismal conditions of the Veterans' Homes, overtime compensation for prison guards, or nurses for disabled children who are wards of the state. It is impossible to quantify or know with certainty what the increase in GR funding to education would have been, absent the addition of Prop B funds. There is simply no reasonable way to determine what future funding might have been. We do not know if another Joplin-type storm will occur, or whether we will suffer another significant economic downturn, or if we will lose an expensive roof at a state hospital that requires state funds. We do know that education has the most effective advocates in the Capitol and that in any budgetary prioritization education is likely to prevail.

Having served on the Missouri House of Representatives Budget Committee for 14 years, with two terms as Chairman, I understand the process of state budgeting. Without the naiveté of youthful exuberance and with the experience of having seen how budgets are formed, I know that passing Proposition B will result in significant new revenue to healthcare and to education at all levels, and that neither direct nor indirect supplanting will occur.  Education will continue to receive both the statutory and popular lion's share of general revenue. The protections against supplanting as written into the amendment are intentionally as strong as could have been made and, unlike previous legislation involving lottery or gambling revenues, include language to prevent supplanting to the legal extent possible.

I am positive that the vast majority of my colleagues, both Republicans and Democrats, join me in that resolve. Should supplanting occur against all our efforts, Missouri voters will know and can take the next electoral opportunity to take decisive action against the legislators responsible. There is no perfect safeguard, but there is also no question that Prop B will result in significantly more revenue for education at every level, as well as for smoking cessation and healthcare.

During my 35 years in public life I have found that the best policy is to tell people the truth and trust them to do the right thing.  Ultimately, the voters will decide, as it should be, but before you cast your vote, please weigh the enormous benefits that Prop B brings to the state against the criticisms levied by those paid to promote their cause. I believe there is no legitimate reason to reject Prop B.

Proposition B is the right thing to do for Missouri's children. Please vote "YES" on November 6th.

Opinion: A Tax Whose Time has Come

by Attorney General Chris Koster

Like you, I am against raising taxes in Missouri, particularly in a weak economy. But there is one exception whose time has come – Missouri’s cigarette tax. The Missouri General Assembly should give Missourians a chance to vote on a moderate cigarette tax increase.

The current situation is well-known. Missouri has the lowest cigarette tax among the 50 states, at 17 cents per pack – a rate established almost twenty years ago. The highest cigarette tax state, New York, places a levy of $4.35 on each pack. The 25^th highest cigarette tax state, Iowa, places a tax of $1.36 on each pack. Even tobacco-producing states like South Carolina and Kentucky have higher cigarette taxes than Missouri.

Public policy favors a cigarette tax that places Missouri somewhere in the middle, at around 90 cents per pack. This change would create approximately $400 million annually in new revenue.

The current budget and health problems facing our state are equally well-known. Missouri spends more money under Medicaid to provide health care for smoking-related illnesses than we collect from the entire cigarette tax. In 2004, the Centers for Disease Control estimated that tobacco-related illnesses cost our state’s Medicaid program $532 million, and these costs have only skyrocketed with inflation. Yet, Missouri collected just $90 million last year in cigarette taxes.

Viewed through this lens, the General Assembly is subsidizing sick smokers more than $400 million annually. Under current tax law, Missouri has become an enterprise zone for cigarettes. I’m a strong supporter of enterprise zones, but not for cigarettes.

To our legislative leaders, I would say this: The cigarette tax is going to increase. Missouri will not remain in 50^th place for very much longer.

I propose raising the cigarette tax by 73 cents per pack, placing Missouri 33^rd out of 50 states. The $400 million in new revenue should be directed to building Missouri’s educational infrastructure, with particular emphasis on higher education, and addressing our state’s health care needs. Such a proposal should be placed before the people next November, so that Missourians themselves may decide.

This plan addresses two important goals:

First, the proposal addresses a serious public health issue. Missouri has the 2nd highest smoking rate per capita in the country. Many people addicted to smoking begin in their teenage years. Alarmingly, almost 19% of Missouri high school students smoke cigarettes. Using increased revenue to treat smoking-related illnesses and to promote cessation programs not only prevents premature deaths in our state, but makes compelling economic sense.

Second, it addresses the devastating funding cuts visited on Missouri’s colleges and universities over the last 10 years. Adjusted for inflation, Missouri’s higher education system has been cut by 34% since 2001.

Fifteen years ago, the Missouri Attorney General’s Office settled its landmark case against Big Tobacco. That settlement marked the turning point in public sentiment regarding smoking-related risks, and it has brought over a billion dollars into Missouri’s General Revenue fund over the last decade. Nonetheless, because Missouri’s cigarette tax is the lowest in the nation, our state’s smoking-related health challenges remain among the country’s highest.

The General Assembly should take action before the people are forced to act on their own behalf through the initiative process. Our state should utilize this money in a way that improves public health, promotes education, and provides real economic benefit for our citizens. To miss this opportunity is to fail in our responsibility as elected leaders of Missouri.