Government Bytes


Missouri Facing Major Tobacco Tax Hike and Question on Health Exchange

by Lee Schalk / /

Will Missourians spur part of so-called “Obamacare”? Will they more than quintuple their cigarette tax? These are the big statewide questions Missouri voters will answer on their Election Day ballot.

Currently, Missouri has the lowest tobacco tax in the country and a competitive advantage over neighboring states whose residents often cross borders to spend their money in the Show Me State. Proposition B would raise the per pack tax from 17 cents to 90 cents, nearly a 530 percent spike, and would be higher than neighbors Kansas and Nebraska while approaching the Illinois rate.

There is no guarantee that the projected $283 to $423 million yearly revenue will materialize. In fact, our recent study showed that between 2001 and 2006, 41 of 59 recent tobacco tax increases resulted in lower-than-projected revenue collection. Missourians may not see an end to tax hikes like these in the future if Prop B is approved.

With Proposition E, voters can reject the creation of a health insurance exchange, a key component of the Affordable Care Act. An exchange would be a place for individuals and families to purchase coverage with a substantial federal subsidy. If a state does not set up its own exchange, the law states that the federal government will create it for them. This measure would prohibit exchanges unless created by the Legislature, initiative, or referendum. While some states have decided to move forward with the creation of a health insurance exchange in order to maintain state control, others have been adamant that they want no part of the President’s healthcare law and would rather delay implementation for as long as possible and wait to see what results the November 6 election will bring.

Stay tuned for more on the major state ballot initiatives this election season, and visit our 2012 Ballot Guide page HERE to find your state’s complete slate of propositions, questions, amendments and more.