What you need to know about Missouri's two cigarette tax proposals

Posted at 7:36 PM, Sep 21, 2016

In November, Missourians will vote on two competing tobacco taxes.

Constitutional Amendment 3 and Proposition A would raise the tobacco tax in Missouri to different levels if either passes and would provide funding to different areas within the state.

Understanding Missouri’s current tobacco tax

Missouri’s current tax on a pack of cigarettes is 17 cents, which is the lowest in the country.

The average rate in the U.S. is $1.65 per pack, and Missouri’s tobacco tax rate is even considerably lower than neighboring states.

Amendment 3

Amendment 3 would raise Missouri’s tobacco tax by 60 cents by 2020. It would increase by 15 cents per year until the total tax is 77 cents per pack in 2020.

If passed, it’s estimated to bring in between $263 million to $374 million annually in additional revenue. The funding would be divided up between three areas: 

  • Improving early childhood education programs

  • Improving health care facilities that provide early childhood health and development programs

  • Tobacco prevention targeted at pregnant mothers and young people



Proposition A

Proposition A would raise the tobacco tax by 6 cents. It would increase by 2 cents in 2017, 2019, and 2021 at which point the tax reaches 23 cents per pack.

If passed, it’s estimated to bring in between $95 million and $103 million annually in additional revenue. The funds raised from Proposition A will fund transportation infrastructure projects. 

Arguments for “Yes” vote

Raise Your Hand For Kids co-founder Linda Rallo said the revenue will bring $300 million into Missouri to spend on kids. She said Missouri is last in the Midwest for state-funded preschool programs.

“Our state invests only $37 million [per year] right now on early childhood education. We spend $600 million [per year] on corrections,” said Rallo.

Language in the amendment creates a trust fund that Rallo described as a “lockbox” that keeps politicians from using the money for their pet projects instead of youth health and education.

“Voters just don’t trust Jefferson City sometimes to do what they say they are going to do with the money, so we made very clear this funding will go into a lockbox and is only going to be spent on priorities that help birth to 5, and pregnant moms and youth,” said Rallo.

Aside from the 60-cent tax, an additional tax, or “equity fee,” will be placed on wholesale tobacco manufacturers.

“They are enjoying unnatural market advantage,” said Rallo, who believes these manufacturers don’t pay their fair share.

Rallo said Missouri is the only state in the country that allows value-brand cigarette makers to sell products at a lower cost.

“[The fee] Effectively closes that loophole, and then Missouri will not be the only state that is technically the dumping ground for cheap cigarettes.”

Arguments for “No” vote

Ronald Leone, the Executive Director of Missouri Petroleum Marketers & Convenience Store Association, called the amendment “Big Tobacco’s scam.”

“It’s literally as if Coke was trying to pass a tax on Pepsi only in order to decrease Pepsi sales and increase Coke sales,” said Leone.

Leone is referring to the “equity fee” imbedded in Amendment 3, an initial 67-cent tax starting in 2018 that would then be tied to inflation.

“An outrageous and unfair 747 percent tax increase that targets their competition only,” said Leone.

Leone said the increase would have an economic impact on Missouri because smokers in neighboring states would no longer have incentive to buy cigarettes in Missouri.

Leone is also concerned that lawmakers in Jefferson City can’t be trusted to spend the tax revenue on its intended purpose.

“That didn’t happen with casino money, that didn’t happen with lottery money and we don’t think we can continue to trust politicians,” said Leone.

Opposition is concerned with abortion language in the amendment.

“For the first time ever, it’s going to include language dealing with abortion to be put into our Missouri constitution. It addresses stem-cell and cloning language,” said Leone.

Rallo countered saying that because some of the funds will go to health organizations and hospitals, “we simply have language that says none of these funds can be spent on [abortion services and stem-cell research].”



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