Judge strikes blow to Missouri cigarette tax initiative

JEFFERSON CITY, Mo. — An initiative proposing to raise Missouri’s cigarette tax to benefit early childhood programs is in jeopardy of not making the November ballot after a judge ruled its financial estimate is insufficient and unfair.

The ruling Thursday by Cole County Circuit Judge Dan Green directs the state auditor to come up with a new estimate. It also effectively invalidates all the petitions submitted to the secretary of state’s office earlier this month under the original financial estimate.

Raise Your Hand for Kids, the group sponsoring the initiative, said Friday it will appeal.

The initiative is one of two proposed ballot measures seeking to raise Missouri’s 17-cent-a-pack cigarette tax, which is the lowest in the nation.

The proposed constitutional amendment would phase in a 60-cent-per-pack increase from 2017 to 2020. It also would impose an additional 67-cent-per-pack tax on cigarettes from tobacco companies that didn’t participate in a 1998 legal settlement involving Missouri and 45 other states. Many of those comparatively smaller companies are selling cigarettes at lower prices in Missouri than the big tobacco companies that were part of the settlement.

The financial summary prepared by Auditor Nicole Galloway’s office estimates the measure would generate between $263 million and $374 million annually. That largely would go to early-childhood education; smaller portions would go to early childhood health programs and anti-smoking programs for youth and pregnant women. The financial summary said the effect to local governments was unknown.

Green struck down the financial summary for two reasons: The estimate on state revenue failed to account for the fact people may buy fewer cigarettes as the price rises, resulting in an “unreasonably high” revenue projection, and the summary should have noted the potential costs to local governments due to a possible decline in cigarette sales.

The financial summary appeared on the petitions people signed and also would appear on the ballot.

“I collected signatures myself. Nobody really ever asked about that” financial estimate, said Linda Rallo, executive director of Raise Your Hand for Kids. “They are more interested in seeing that we don’t adequately invest in early-childhood education. ... A lot of folks, too, think our cigarette tax is too low and would like to see that raised.”

The lawsuit against the measure was brought by Jim Boeving, owner of Discount Smokes & Beer in Springfield. His case also challenged the secretary of state’s summary of what the measure would do, but Green upheld that portion.

The measure has been opposed by the Missouri Petroleum Marketers & Convenience Store Association, which is backing a separate initiative petition to gradually raise the cigarette tax by 23 cents. That measure is projected to generate around $100 million annually for transportation infrastructure projects.

The secretary of state’s office has until Aug. 9 to determine if initiatives got enough valid signatures from registered voters to qualify for the November ballot.

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