Proposition B: (Official Ballot Language)
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 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. Escrow fund changes may result in an unknown increase in future state revenue.
This November Missourians will vote on whether to approve a cigarette tax hike.
According to the petition the Department of Elementary and Secondary Education:
- Would be responsible for distributing the funds to Missouri school districts.
- Would give funds to school districts based on average daily attendance in the event that the school funding formula is not fully funded. Currently, the school funding formula is estimated to be $460 million underfunded.
- Should the Foundation Formula be funded fully, the money would be distributed to schools based on enrollment. This is different than how money is typically spread to school districts. The state uses the Foundation Formula to see how much each district receives based mostly on attendance and local taxes.
- At least 25 percent of the money in each school district must be used toward direct classroom expenditures.
According to the petition the Department of Higher Education:
- Would be responsible for distributing funds to public colleges and universities.
- Each higher education institution receiving this funding must deposit it into a new or existing restricted fund.
- These funds can only be used on education of future caregivers, faculty matters, facility improvements, classroom instructional technology and campus safety.
- At least 25 percent of the money distributed must be used toward programs and initiatives related to the education, training, and development of future caregivers. This includes physicians, dentists, nurses and other health care providers.
"It's gonna move the ball forward, so from the perspective of improving educational opportunities across the state, it is progress," Fajen said.
Supporters of Prop B, like Rep. Chris Kelly, D-Columbia, say increasing the tax will discourage smoking in Missouri and provide important education funds.
"For potential teenage smokers, there's a strong correlation between price and starting to smoke. And so, we know the tax will produce revenue that we need, and we also hope that it will discourage teenage smokers," Kelly said.
Opponents say raising the tax will cause a loss in revenue. They worry people will travel from Missouri to bordering states with lower tobacco taxes to buy their cigarettes. If Prop B passes, half of Missouri's eight border states will have higher tobacco taxes. These states are Illinois, Iowa, Oklahoma and Arkansas.
"That argument has no intellectual basis because the states that have lower [taxes] that are near us are only a tiny, tiny bit lower," Kelly said.
Sen. Jim Lembke, R-St. Louis, also opposed the proposition. He says there needs to be reform for issues such as tax credits before we tackle a tobacco tax.
"We are making decisions in this state and those decisions are going the way of corporate welfare rather than the promises that we keep to fund our public schools," Lembke said.