Tobacco and taxes
Sunday, September 25, 2005
A plan to ask voters to increase cigarette taxes and approve a constitutional amendment spelling out how the extra revenue would be spent is picking up steam across Missouri. A major component of the plan would be smoking-cessation programs, which is commendable. But other portions of the plan need to be carefully considered.
Any program that is effective in getting people to stop smoking or not to start in the first place is worthwhile. The Missouri Foundation for Health, which allocated $47.5 million last year from the not-for-profit assets (now in excess of $1 billion) of the former Blue Cross-Blue Shield of Missouri, designated $2.3 million for the American Lung Association's tobacco prevention and cessation programs.
Many Missourians will remember the Big Tobacco settlement of a few years ago that was supposed to pump millions of dollars a year into the state to be used for stop-smoking programs and to provide health care for Missourians with smoking-related illnesses. Many states, Missouri included, traded their annual payments from the tobacco settlement for one-time infusions of cash to offset budget deficits.
For that reason, the groups (American Lung Association, American Cancer Society, American Heart Association, among others) seeking 150,000 signatures to get this plan on the November 2006 ballot may think it best to spell out how revenue from an 80-cent-a-pack tax increase (that's 4 cents for each cigarette) will be spent to help the victims of tobacco-induced illnesses.
Missouri has experience with designated taxes that produce millions of dollars a year even after the biggest needs have been met. One is the eighth-cent conservation tax that has made the Missouri Department of Conservation one of the best and most-envied departments in the nation. But the state's conservation goals could have been met without the huge expenditures for land purchases that have become emblematic of the department.
Then there is the overarching issue of tax increases in general. Missouri has experienced several years of cost cutting and juggling of spending priorities with the aim of streamlining essential services and avoiding any statewide tax increases.
The unfunded needs of state government in recent budget cycles still have their champions, most of whom realize those needs won't get any money unless there's a tax increase. A tax increase as large as the one proposed for cigarettes would generate an estimated $351 million a year -- a pot of money that would be set aside only for tobacco-related expenses rather than education or highways or other major expenses.
Tobacco taxes have the shine of a noble effort to cut the rate of new smokers. If successful, there eventually would be no need to provide care for those didn't heed the warnings of the past 40 years.
The bigger question is how to pay for all of Missouri's programs. Given the anti-tax climate of the state (voters rejected a smaller cigarette-tax increase in 2002), it might be prudent to question whether any tax increase ought to be so limited in scope.