Battle lines drawn over tobacco tax
Sunday, October 29, 2006
By TJ GREANEY
On Nov. 7, Missourians will be asked to vote on Amendment 3. If approved, the change to the state constitution would increase taxes on tobacco products by 80 cents. Missouri's tobacco tax is currently 17 cents, the second-lowest rate in the nation.
On one side, the American Lung Association, HMOs and others have combined to spend $3.1 million endorsing the amendment. On the other, tobacco companies like Reynolds American have spent $2.2 million to defeat it.
Statistics from the Missouri Department of Health and Senior Services show about 24 percent of Missourians smoke, compared to the national average of 20.7 percent. This issue will not be decided by smokers alone. Here are questions, answers and opinions voters should consider before casting a ballot.
Where will the money go?
The tax would generate approximately $351 million annually. Of that, 17.5 percent would go toward smoking cessation and education courses and the remaining 82.5 percent toward a state "Health Care and Treatment Account."
That account breaks down as follows:
* $102 million toward increasing access to health-care programs, services and coverage for those living under 200 percent of the federal poverty limit, including those receiving Missouri Medicaid and the State Children's Health Insurance Program.
* $102 million toward primary care and specialty care physician services.
* $44 million toward ensuring necessary trauma care and emergency room care for low-income and uninsured patients.
* $38 million to provide additional funding for safety net clinics like those for public health and mental health.
* $4 million to increase the availability of emergency ambulance services for low-income patients.
Since Missouri is eligible for a federal match more than doubling this money, the total impact of the tax for low-income health care would be more than $746 million.
Opponents have bristled at what they call a lack of accountability.
"Eighty-two-point-five percent of the Amendment 3 tax increase is not required to be used on tobacco-related diseases," said Ron Leone, executive director of the Missouri Petroleum Marketers and Convenience Store Association. "It will go directly into the pockets of doctors, hospitals, HMOs and drug companies to essentially use as their own slush fund."
Leone points to the fact that politicians who usually agree on little are against this measure. Gov. Matt Blunt and his presumptive Democratic challenger in 2008, Attorney General Jay Nixon, are examples of political foes who have lined up against the amendment. Nixon has cited the distribution of the national tobacco settlement to programs other than anti-smoking programs as one of his reasons for opposing Amendment 3. Blunt has cited an opposition to tax increases in general.
But Dr. Jim Blaine, a physician from Springfield, Mo., who is taking time off from his practice to volunteer for the American Lung Association, strongly disagrees with Leone's criticism.
"The 82.5 percent has everything to do with tobacco-related diseases," he said.
How will it affect smoking habits?
According to studies examined by the Campaign for Tobacco Free Kids, every 10 percent increase in the real price of cigarettes results in a 3 percent to 5 percent drop in smoking rates.
There is also evidence of this occurring in states that have increased taxes. When Michigan raised its tobacco tax from $1.25 to $2, calls to the state's "quit line" rose to 2,000 in the first 20 days after the measure took effect. That's compared to only 380 calls per month previously.
In Washington state, 100,000 adult smokers quit the year after a 60-cent tax increase.
Some local smokers suggest that trend will hold true in Missouri.
"It'll push me over the limit," said retiree and smoker Ronnie Parmer of Cape Girardeau. "The price, 80 cents more, it'll just be too much. I'd like to quit anyway, so this will be it."
But others said the effect may be mixed.
Clinton Anderson, a New Yorker visiting Cape Girardeau, said sky-high tobacco prices there have not caused him to quit his one-to-two-pack-a-day habit. "It's the same as gas prices. They go up, but people still pay. In New York, it costs $7.50 a pack. You complain about it, but you still pay it."
Arrawanna Rosenthal of Cape Girardeau, who smokes a pack a day, said the tax would cut into her disposable income but wouldn't change her habits. "I'll probably just pay it," she said.
But Rosenthal emphasized she is not happy about the measure. "I don't think it's fair they target smokers. What about booze? If you drink, you hurt other people. Me, I'm only hurting myself. I'm not getting behind the wheel. I'm not going to kill anybody."
Who does it hurt?
Someone who smokes a pack a day now spends approximately $1,700 annually on cigarettes. With the increase, that expense would rise to $2,000.
The tax would also hurt convenience stores. Leone, the executive director of the Missouri Petroleum Marketers and Convenience Store Association, said research has shown convenience store operators generate between 20 percent and 35 percent of their profits from tobacco products.
"If they sell less product, that means less investment in the community," Leone said. "They'll have to lay off employees. They'll be generating less tax revenue for state coffers, which we know goes towards things like roads, bridges and schools."
A big chunk of the lost revenue for convenience stores would come in border areas of the state like Cape Girardeau.
Locally, people drive from Illinois to take advantage of the lower tax rate. If the amendment passes, Missouri's tobacco tax rate would be narrowly lower than two border states -- Illinois (98 cents) and Oklahoma ($1.03) -- but higher than other border states -- Arkansas (59 cents), Iowa (36 cents), Kansas (79 cents), Kentucky (30 cents), Nebraska (64 cents) and Tennessee (20 cents).
Who does it help?
The tax will aid a variety of health services for low-income people, but doctors like Blaine ask voters to note the increase to the amount paid to doctors seeing Medicaid patients. Many doctors across the state say they cannot afford to treat Medicaid patients because the state fees are so low. Missouri pays doctors $21 for an initial office visit. The federal Medicare program pays $36 for the same visit.
"When you go in to see a physician for preventative care, you're not waiting until you have to go to the emergency room and paying those high rates. It's cheaper and more effective," he said.
Blaine said the average Missouri household spends $604 in state and federal taxes from smoking-related illnesses, meaning the tax should actually be much higher.
He disputes the claim that much of this money will not go directly to help smokers.
"This does help smokers. The leading preventative causes of death and disease in Missouri are heart disease, cancer, stroke and emphysema. This is absolutely right-on to help all of those," he said.
When would the law take effect?
335-6611, extension 245