Business leaders hear tax debates on tobacco issue

LAKE OZARK, Mo. -- Both sides in the debate over a proposed $342 million tax increase on tobacco products made their cases to state business leaders on Thursday.

Citizens for a Healthy Missouri, a coalition of health-care organizations, is sponsoring the tax measure, which appears on the Nov. 5 ballot as Proposition A. Brad Ketcher, a spokesman for the group, said the tax would provide a much-needed boost in state spending on health care without costing a dime to the majority of Missourians who don't smoke.

Ronald Leone, executive director of the Missouri Petroleum Marketers and Convenience Store Association, countered that the tax would expand welfare and harm small businesses for the benefit of large corporations bankrolling Citizens for a Healthy Missouri.

The two made their comments during a seminar sponsored by the Missouri Chamber of Commerce.

Proposition A calls for adding 55 cents to the existing 17-cent state excise tax on a pack of cigarettes. The tax on other tobacco products would increase to 20 percent.

Ketcher said the burden on taxpayers for the costs of treating sick smokers amounts to $7.18 for every pack of cigarettes sold. He said smokers should be responsible for a larger share of that burden.

And Missourians agree, Ketcher said, citing as evidence a recent poll conducted by the St. Louis Post-Dispatch that showed 59 percent of respondents favoring Proposition A and only 37 percent in opposition.

While supporters hope higher taxes will encourage smokers to kick the habit, Ketcher said that wouldn't mean average taxpayers would be on the hook later for new programs funded by Proposition A should collections from the tax decline.

"If smoking decreases and revenue goes down, this is a proposition that can deal with fiscal ups and downs," Ketcher said.

For example, some of the money would go for grants. If revenue drops, fewer grants would be given, Ketcher said.

Proposition A earmarks all the revenue it would generate for supplemental Medicaid payments, an existing prescription drug program for the elderly, life sciences research, early childhood education and anti-smoking programs.

Little revenue support

Leone noted that only 7 percent of such revenue would go for programs directly related to smoking.

"Of that remaining 93 percent, it essentially benefits the corporate proponents who put Proposition A on the ballot," Leone said. "These are the people who would reap the vast majority of Proposition A funds."

Among the beneficiaries, Leone said, would be health-management organizations, hospitals, drug companies and physicians.

Leone also accused the measure's proponents of trying to tax a legal product out of existence.

"They are seeking to use tax policy to engineer social behavior," Leone said.

Ketcher said Leone's group is in the pocket of tobacco companies.

"Their tobacco profits are at stake," Ketcher said. "Smoking is going to go down and that is bad news for tobacco producers."

Leone bristled at the suggestion his group is a shill for Big Tobacco. He said tobacco companies gave him $16,500 for the anti-Proposition A. Meanwhile, Citizens for a Healthy Missouri has raised $3.8 million for its campaign.

With one of the lowest tobacco taxes among states in the region, Missouri's economy benefits from out-of-state smokers who cross the border to buy lower-priced cigarettes and make other purchases while here, Leone said. Ketcher said that even with Proposition A, Missouri's cigarette tax would still be lower than those of Illinois and Kansas, the states adjacent to Missouri's two major metropolitan areas.

mpowers@semissourian.com

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