Is Missouri Ready to Raise Its Very Low Cigarette Tax?

At the Welcome Smokers shop on Missouri Boulevard in the Missouri state capital, a pack of Marlboro reds, the world’s most popular Cigarettes price risebrand, costs $5.14. By contrast, a pack of the same cigarettes runs as much as $13 on the Upper East Side of Manhattan.

“If this is a race to the bottom, we win,” Missouri state representative Mary Still, a Democrat from Columbia, groused in a recent editorial, referring to the fact that Missouri now levies the lowest cigarette tax in the U.S.: 17¢ a pack. Missouri won this distinction this past summer when South Carolina lawmakers — shrugging off the influence of the state’s tobacco growers — overrode outgoing Republican governor Mark Sanford’s veto and raised its tax by half a buck per pack, from 7¢ to 57¢. New York has the highest cigarette tax, at $4.35 a pack; the national average is $1.45 a pack, according to the Campaign for Tobacco-Free Kids.

At a time when even Deep South tobacco states are turning on the golden leaf to jack up so-called sin taxes, many people find it baffling that Missouri — known more for its waves of soybeans and corn — remains determined to keep its cigarette taxes (and beer taxes too) at permanently low levels. Especially since the state is facing a budget shortfall of as much as $600 million next year.

Both at the polls in statewide referendums and in the legislature, efforts to boost cigarette taxes are repeatedly shot down. Still is trying again in 2011: she’s drafting a bill that would hike the tax by 12¢ each year for eight years. But antitax Republicans control both legislative chambers, and Democratic governor Jay Nixon has taken a no-new-taxes pledge. A spokesman for the governor, Scott Holste, wouldn’t touch the tax idea with a 10-foot pole. “We’re just not gonna weigh in on that right now,” he said.

“There is absolutely no appetite for it — zip, zero, none,” says a GOP lawmaker who recalls the time he made the mistake of telling his Republican brethren that he had no objection to a tax hike on smokers. “They almost laughed me out of the room,” he says. “They said, ‘Please don’t ever say that out loud again.’ ”

The University of Missouri, which is staring at a potential $50 million cut from the state next year, recently hosted area lawmakers to brainstorm ideas for closing the budget gap. The cigarette tax came up because it seems to be low-hanging fruit, given the high social costs of smoking. According to the Centers for Disease Control (CDC), 23.1% of adult Missourians are smokers, among the highest rates in the nation. Kentucky is highest, with 25.7% of its residents lighting up. Smoking-related illnesses cost the Medicaid system some $641 million last year, according to the Missouri Budget Project, and the CDC says smoking kills at least 9,500 Missouri residents each year. And studies have shown that increasing cigarette taxes 10% can reduce consumption as much as 5%, especially among young people.

“There were Republicans in the room” during the university conference, Still tells TIME. “Everybody agreed it was indefensible to be lowest in the nation. But they don’t think we can do anything about it. Well, just raise the tax. We’ve talked about what’s the matter with Kansas. I think we need to talk about what’s the matter with Missouri.”

One thing that poses a problem in reforming cigarette taxes is the state constitution. Any major tax increase must go before the voters. (Still’s proposed measure would avoid that fate by phasing in the tax in small steps.) In 2006, a proposal to raise the cigarette tax to 97¢ a pack lost a hard-fought referendum, 51% to 49%. Hospitals and health advocates poured millions into the campaign for the tax; opposition came from the tobacco lobby, gas stations and convenience stores. Posters at minimarts and filling stations across the state called for voters to “Stop Tax Abuse” and vote down a “470%” tax increase.

The public-health advocates learned a lesson. Without a change in public and political will, says Dave Dillon of the Missouri Hospital Association, “we’re not going to invest again.”

Opponents of higher levies on tobacco warn that sin taxes are regressive and hit poor folks the hardest. They also claim that the low taxes are a boon for the state because bargain-hunting residents of the eight states bordering Missouri cross state lines to stock up on coffin nails. For example, a smoker in Keokuk, Iowa, could save nearly $12 per carton in state taxes by driving a little ways to Kahoka, Mo. The distance between Mammoth Springs, Ark., and Thayer, Mo., is about 2½ miles (4 km) — and $10 a carton in taxes.

“The antitobacco zealots are not trying to reasonably regulate,” says Ronald J. Leone of the Missouri Petroleum Marketers & Convenience Store Association. “Their goal is prohibition. It’s hard to negotiate with these people. They can’t prohibit it, so they’re trying to kill it by a thousand cuts.”

Look at the whole tax picture, Leone contends. The federal tax on a pack of cigarettes is $1.01, and local communities impose their own levies. When federal, state and local taxes are tallied up, Missouri’s smokers are paying 46% taxes on a pack of popular off-brands, with names like Decade and Xcaliber, he said, while brand names are taxed above 30%, depending on the locality. “There is no other product on the market that’s overtaxed like that,” says Leone.

Missouri’s beer tax, too, is near the bottom. Its 6¢-per-gal. rate has not been touched in nearly 40 years. The storied Anheuser-Busch brewery in St. Louis is one of the state’s largest employers, which has surely helped keep the status quo in place.

Yet much of Missouri’s steadfast refusal to jack up sin taxes can be attributed to one man. For decades, Jefferson City’s most revered and feared lobbyist was John Britton, who worked to protect both Big Tobacco and the brewery interests. Stately and charming, Britton is a three-pack-a-day smoker so beloved at the statehouse that the Senate passed a resolution 15 years ago forever declaring the airspace immediately surrounding him “an official Missouri state senate designated smoking area.”

And his hold has extended to other alcohol and cigarette regulations. It’s perfectly legal to have open containers of alcohol in moving cars in Missouri, for instance. Britton’s argument against the open-container bans embraced by most other states was that holding a beer can is no more distracting than holding a peanut-butter sandwich. When that brand of homespun thinking doesn’t work, Britton has been known to hint that Missouri can kiss-super-slims-cigarette Budweiser goodbye — and all those jobs and corporate dollars — should the legislature decide to play nanny.

That would be a new role for Missouri politicians. The state has a long history of tolerance when it comes to matters of appetite. During the long years of Prohibition, as America’s reformers fought to dry out the nation, Missouri remained as wet as the rain forest. Boss Tom Pendergast of Kansas City made sure the saloons were well stocked, and not one felony prosecution for bootlegging occurred in his district. “If you want to see some sin, forget about Paris. Go to Kansas City,” opined the Omaha World Herald at the time.

Still, it’s politics, played hard and fast in Missouri, that might conceivably inspire a hike in the tobacco tax. Some supporters of higher cigarette levies have begun to suggest that that this might be a good chance for Republicans to put Governor Nixon in a box. Suppose the legislature passed a cigarette tax to ward off school budget cuts and sent it for the governor’s signature: Nixon would have to choose between breaking his no-tax pledge or leaving schools in the lurch. That “would be a real Jedi mind trick on the governor,” muses one observer — the sort of crafty political maneuver that might leave a Missouri pol craving another cigarette.

By Karen Ball / Jefferson City

One response to “Is Missouri Ready to Raise Its Very Low Cigarette Tax?

  1. Looks like we need John Britton to do his stuff ! Now is not the time to raise the tax on cigarettes!

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