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Missouri voters may be asked to hike cigarette tax

Thursday, January 5, 2012

Missouri voters may be asked in 2012 whether the states's cigarette tax, now lowest in the nation, should be raised.

Secretary of State Robin Carnahan has announced that seven initiative petitions relating to local taxes on cigarettes or tobacco products have met state standards for circulation.

Missouri, with a tax of 17 cents per pack, along with North Dakota (44 cents) and California (87 cents) have not raised their taxes since at least 1999, according to Tobacco-Free Kids, a national organization dedicated to preventing children from becoming smokers.

The rates do no include local and state sales taxes.

Virginia (30 cents) and Louisiana (36 cents) are the second- and third-lowest cigarette tax states. Virginia and five other southern states are heavy tobacco-growing states.

Arkansas ranks 29th at $1.15 per pack.

New York has the highest tax in the country, at $4.35 per pack, followed by Rhode Island ($3.46) and Connecticut ($3.40).

The highest combined state-local tax rate is $5.85 in New York City, with Chicago, Ill., second at $3.66 per pack. Other high state-local rates include Evanston, Ill., at $3.48 and Anchorage, Alaska, at $3.452 per pack.

Federal cigarette tax is $1.01 per pack. From the beginning of 1998 through 2002, the major cigarette companies increased the prices they charge by more than $1.25 per pack (but also instituted aggressive retail-level discounting for competitive purposes and to reduce related consumption declines).

The average price for a pack of cigarettes nationwide is roughly $5.58 (including statewide sales taxes but not local cigarette or sales taxes, other than New York City's $1.50 per pack cigarette tax), with considerable state-to-state differences because of different state tax rates, and different manufacturer, wholesaler, and retailer pricing and discounting practices.

Missouri ballot petitions

The ballot title for the first two approved petitions reads:

Shall the Missouri Constitution be amended to:

* allow voters in cities and counties to set and control local taxes on cigarettes or tobacco products within their city or county; and

* use the proceeds of such taxes for local job creation, health care, public education, reduction and prevention of tobacco use, or other uses specifically approved by local voters?

The other petitions relate to the City of St. Louis or do not include language about using the generated tax funds as cited in the first petition.

All of the petitions were submitted by Mark Reading of Jefferson City.

Before any constitutional changes can be brought before Missouri voters in the November 2012 election, signatures must be obtained from registered voters equal to 8 percent of the total votes cast in the 2008 governor's election from six of the state's nine congressional districts.

For statutory changes, signatures must be obtained from registered voters equal to 5 percent of the total votes cast in the 2008 governor's election from six of the state's nine congressional districts.

Signatures on behalf of all initiative petitions for the 2012 ballot are due to the Secretary of State's office by no later than 5 p.m. on May 6.

Before circulating petitions, state law requires that groups must first have the form of their petition approved by the Secretary of State and Attorney General.

The Secretary of State then prepares a summary statement of no more than 100 words and the State Auditor prepares a fiscal impact statement, both of which are subject to the approval of the Attorney General. When both statements are approved, they become the official ballot title.

Carnahan also announced that another petition has met state standards for circulation, which relates to taxation on cigarettes and other tobacco products.

It reads:

Shall Missouri law be amended to:

* create the Health and Education Trust Fund with proceeds of a tax of $0.0365 per cigarette and 25% of the manufacturer's invoice price for roll-your-own tobacco and 15% for other tobacco products;

* use Fund proceeds to reduce and prevent tobacco use and for elementary, secondary, college, and university public school funding; and

* increase the amount that certain tobacco product manufacturers must maintain in their escrow accounts, to pay judgments or settlements, before any funds in escrow can be refunded to the tobacco product manufacturer and create bonding requirements for these manufacturers?

Estimated additional revenue to state government from this proposal is $283 million to $423 million annually with limited estimated implementation costs or savings.

The revenue will fund only programs and services allowed by the proposal. The fiscal impact to local governmental entities is unknown.

The petition was submitted by Robert Hess of St. Louis.



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