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Welfare advocacy groups oppose parts of tobacco tax proposal

October 05, 2005
By: Leslie Yingling
State Capital Bureau

JEFFERSON CITY - Opposition to a proposed 80-cent cigarette tax increase is emerging from some groups that support a higher tobacco tax, but oppose the way the revenue would be allocated under the proposal.

The proposed constitutional amendment would raise the tobacco tax to 97 cents per pack of cigarettes, with a 20 percent tax on other tobacco products. The revenue would be spent on anti-smoking programs and health care services for Missouri's poor and uninsured.

Missouri's 17 cent-per-pack tax is the second-lowest in the country, behind South Carolina.

Sharon Feltman of the Missouri Association for Social Welfare said she favors the tax increase but opposes enforcing it with a constitutional amendment. This would lock in a structure that would be difficult to change, she said.

"Do we really want to constitutionally fund hospitals with taxes?" she said. "I think the money could be used in a broader way to increase access to health care for many more Missourians."

Lori Pickens, a spokesperson for the coalition behind the proposal, said amending the constitution is the surest way ensure the tax revenue will be used as intended.

"The public has a great deal of concern about the funds not being used by the legislature in the way they're intended," she said.

The proposal is led by the Committee for a Healthy Future, a coalition of more than 100 non-profit organizations including the Missouri State Medical Association, the Missouri Hospital Association, and the Missouri chapters of the American Cancer Society, the American Heart Association, and the American Lung Association.

Revenue generated by the tax would be earmarked for smoking cessation and prevention programs and disease management for uninsured Missourians with chronic illnesses. People with household incomes of less than 200 percent of the federal poverty level would get health care access cards of varying amounts to pay for outpatient visits, pharmacy and other health care services.

Amy Blouin is the executive director of the Missouri Budget Project, a group that advocates for the poor. She supports a higher tobacco tax, but is at odds with the proposal's earmarking.

"We do think it is a good source for revenue," she said. "But it's a significant tax increase, and we believe that if you're going to ask Missourians to pay for a tax increase you need to use it in the most effective way possible."

Blouin said she fears the vouchers will set a dangerous precedent. "That's a slippery, risky slope," she said.

More than half of the tax dollars would increase reimbursement for Medicaid providers. Tom Holloway, a spokesperson for the Missouri State Medical Association, said the money will attract doctors who can't or won't accept the current Medicaid reimbursement.

"Medicaid pays so very little - 30 to 35 cents on the dollar -- that many physicians are perfectly willing to see Medicaid but can't afford to do so," he said.

Ronald Leone, executive director of the Petroleum and Convenience Store Assocation, says the tax will give too much to doctors.

"It's essentially a tax increase on a minority population, a large portion of which are poor, in order to fatten the pocketbooks and wallets of doctors, hospitals and prescription drug companies," he said.

However, Pickens said lower income Missourians would derive the most benefit from the tax.

Holloway says the money is "truly secondary."

"The money will never be enough to give doctors a profit," he said.

"Most of the physicians in this state wouldn't mind if you took the money that's generated, put in a big pile and burned it," he said. "The physicians want to see lower consumption of tobacco products in Missouri, which will improve health, productivity, it'll save millions of dollars in unnecessary health care costs."

Blouin said she would like to see the cigarette tax revenue used to restore Medicaid funding.

"It could be maximized and enhanced to bring in more federal tax dollars, to get more bang for your buck," she said.

Pickens said the tobacco tax proposal is not the right place to fix Medicaid. She is surpised and concerned, she said, that welfare advocacy groups are opposing parts of the proposal.

"The funds earmarked by this proposal are going to reach the people they care about," she said. "I'm saddened by the fact that we aren't all working right now hand in hand on this, because this is a measure that is going to help people who do not have access to health care."

Supporters of the tax proposal say it would raise $351 million each year. Pickens said she hopes this will decline as the tax encourages people to quit smoking. The state revenue department estimates the tax would bring $489 million, before adjusting for any drop in sales.

"It concerns me that there are groups who want to use a declining revenue source to fix a program that is under construction," Pickens said.

A petition to put the tobacco tax proposal on the Nov. 2006 ballot will require nearly 150,000 signatures. Missouri voters failed to approve a 55-cent cigarette tax in 2002.