Tobacco amendments create confusion for voters
Fitzpatrick questions need for big boost in early childhood spending
Voters on Nov. 8 will decide on two proposed amendments to the Missouri State Constitution relating to new taxes on tobacco use, both purporting to support non-tobacco programs while having an unadvertised impact on tobacco sellers.
Both propositions have been placed on the ballot by initiative petition. The Missouri General Assembly has not vetted either issue, nor does any clear legal interpretation exist for its language. Both would generate new revenues not sought by lawmakers, and how that money would fit into existing funding streams is uncertain.
The most promoted proposal is Amendment No. 3, which would phase in an additional 60 cents per pack of cigarettes sold by the year 2020, a tax increase of 747 percent. The money would be deposited in a newly established Early Childhood Health and Education Trust Fund. Secretary of State Jason Kander calculated the proposition would raise between $263 million and $374 million a year.
Under the amendment's formula, 75 percent of revenues raised would go toward grants to improve the quality of preschool programs and access to those programs. Another 10 to 15 percent would go toward grants to hospitals and healthcare agency for improving access to early childhood health and development programs. The remainder would go toward smoking cessation programs.
According to State Rep. Scott Fitzpatrick, R-Shell Knob, chairman of the House budget committee, two years ago the General Assembly amended the Foundation Formula to allow preschool students to represent a portion of the average daily attendance count. Money from the amendment would come in addition to existing state funding.
"What we fund now is $17 million for Parents As Teachers, $14 million in grants for Missouri preschool programs, and $171 million for early childhood special education," Fitzpatrick said. "Two years ago, we voted funding to include early childhood education for unaccredited districts, which will be phased in for other districts when the Foundation Formula is fully funded. Funding all districts would still be considered a new activity as this has not yet been done.
"We already have programs in place that work. We could see if the program had to tap into general revenue to pay for it. The high end of what it could cost is $130 million, if all districts received the maximum. I think it will be half of that. There is potential we could use the money if the amendment passes. I would ask is there currently a need and how would we use another $130 million and not waste that money?"
Fitzpatrick voiced concern that a large new revenue stream may prompt lawmakers to revisit the Foundation Formula again and simply take out the funding they approved for early childhood.
"We may not need an immediate tripling of money to early childhood education," Fitzpatrick said. "My job as budget chairman is to look at what is the best way to spend taxpayers' money. If this raises $130 million in new programs that are not vetted, are we doing justice to taxpayers or should we use that money on existing programs where we're tapping into general revenue?"
Opposition is widespread for varying reasons. The Missouri National Education Association and Missouri Retired Teachers Association have voiced opposition because the measure would empower 13 unelected bureaucrats named to a commission to distribute the funds, even to private and religious schools. Language in the amendment states no funds should go to "abortion services" or any agency offering related services, which pro-choice advocates oppose because it would place the terms "abortion" and "abortion services" in the state constitution for the first time. Some have suggested the amendment only targeted early childhood programs because that issue polled most favorably with voters, not because of any need for the programs themselves.
According to political observers, the purpose for the amendment lies in how tobacco companies would pay for the proposition. Small tobacco companies not subject to the 1998 Tobacco Master Settlement Agreement would pay a much higher percentage. This would theoretically even the market between the signers of the master settlement and smaller firms that have become active since 1998 who have profited by selling tobacco products at a much lower price.
Reynolds American Inc., the parent company of R.J. Reynolds, one of the biggest tobacco manufacturers and signatory to the master agreement, donated more than $2 million by April to Raise Your Hands For Kids, the group promoting Amendment No. 3, according to media reports. St. Louis Public Radio credited Reynolds with providing more than 90 percent of the money promoting the amendment, a total now calculated at more than $5 million.
Proposition A, which is also on the Nov. 8 ballot, is being promoted by the Missouri Petroleum Marketers and Convenience Store Association and the smaller tobacco companies, such as Cheyenne International and Excalibur. Proposition A would increase taxes on cigarettes in 2017, 2019 and 2021, for a total addition of 23 cents per pack. That would generate an additional $95 million to $103 million annually, which would go into a new "Transportation Infrastructure Fund" for use exclusively on transportation infrastructure. While the proposition directs the state treasurer to invest the funds, no language specifies how the money will be distributed.
The new tax would be paid evenly by tobacco producers, not addressing potential inequities left by the master tobacco settlement. Political observers believe Proposition A is meant to confuse voters looking at Amendment No. 3, and possibly leading to the defeat of both measures.
Presently, Missouri has the lowest cigarette tax in the nation.
A simple majority is required for passage of each amendment.