Missouri schools miss out on new funds with tobacco tax loss

A day after Missouri voters barely rejected a sharp increase in the state’s tobacco tax for the third time in a decade, educators are wondering where they can find increased school funding.

Supporters of the tax hike are trying to figure out where they could have found more people to back the cause.

Proposition B, which would have raised the excise tax on tobacco from 17 cents per pack — the lowest rate in the nation — to 90 cents, failed by less than 1 percent out of more than 2.6 million votes cast Tuesday. In 2002 and 2006, voters rejected similar measures by less than 2 percentage points.

The state auditor’s office estimated the initiative would have generated between $283 million and $423 million annually, with the proceeds to be earmarked for education and smoking cessation efforts.

The measure had the backing of K-12 educators and those in higher education because of the money involved, while the American Cancer Society saw the tax increase as a deterrent to young people thinking about picking up the smoking habit.

“It was the most important thing on the ballot, more important than any statewide candidate, for the well-being of both the kids in Missouri and our economic development,” said proposal sponsor Rep. Chris Kelly, a Columbia Democrat.

The Missouri Petroleum Marketers and Convenience Store Association was Proposition B’s most prominent opponent. Ron Leone, head of the group, said the tax increase was far too steep and would have cost Missouri its competitive advantage in the cigarette market. A study by a University of Missouri economics professor estimated the state would lose more than $67 million in sales tax revenue because of an estimated drop in sales of about 157 million packs.

Leone said he could support possibly doubling the tobacco tax to 33 or 34 cents, which would keep Missouri’s tax lower than in surrounding states.

A week ago, University of Missouri’s Columbia campus Chancellor Brady Deaton warned that failure to pass the tax increase would likely scuttle plans to expand its medical school with a second clinical campus in Springfield.

On Wednesday, a university spokeswoman repeated that assertion.

“We are disappointed Proposition B did not pass, and there is no other source of funding to expand the medical school in Springfield,” said Mary Jo Banken, director of the university’s news bureau.

Kelly criticized educators outside of Boone County for not doing enough to get the measure passed.

Brent Ghan, spokesman for the Missouri School Boards’ Association, said K-12 educators fought hard for the tax increase, including passing resolutions in support of it.

But questions raised by opponents about where the new tobacco revenue would be spent were valid, he said, in light of previous instances in which gambling proceeds were promised for education, only to replace — not supplement — state funding for schools.

“Skepticism of government in general probably came into play in the vote,” Ghan said.