Tobacco companies line up on both sides of Missouri tax debate

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A civil war in the tobacco industry could play out in Missouri this year.

A pair of rival ballot measures seek to raise the state’s lowest-in-the-nation 17-cents-a-pack tax on tobacco products.

One would ask voters to amend the state’s constitution to raise the tax 60 cents per pack and use the new money to pay for early childhood education. The parent company of R.J. Reynolds Tobacco Co., makers of Camel and Newport cigarettes, recently donated $1 million in support of the measure.

The other would ask voters to increase the tobacco tax 23 cents per pack and put the money toward road repairs. That campaign is being run by the Missouri Petroleum Markets and Convenience Store Association, a longtime opponent of previous efforts to raise the cigarette tax, and is being largely funded by smaller, value-brand cigarette companies like Cheyenne International LLC and Xcaliber International Ltd.

Both campaigns are eyeing the 2016 ballot. And the battle between Big Tobacco and Little Tobacco could be a deciding factor.

The key issue drawing the two forces into the debate is the fact that for more than a decade Missouri lawmakers have declined the state attorney general’s request to pass a law to nullify a pricing advantage that small tobacco manufacturers enjoy.

Big tobacco companies like R.J. Reynolds and Philip Morris were included in a 1998 legal settlement that forced them to make annual payments to Missouri to cover the health damage their products caused smokers. Smaller tobacco companies were not included in that settlement.

The early childhood education ballot measure would address that difference. The transportation funding ballot measure would not.

Another major difference in the two proposals is a provision in the road funding measure voiding the tax increase if any future tobacco tax increase is placed on a state or local ballot. That means if a tax increase only appears on a local ballot, even if it never passes, the 23-cents-per-pack increase would disappear.

Regardless of the contents of the proposals, a tobacco tax increase faces an uphill fight in Missouri.

Ballot efforts to raise the tax in Missouri fell to defeat in 2002, 2006 and 2012. But the last campaign lost by less than a percentage point.

A third proposal to raise the tobacco tax to fund higher education was abandoned in the wake of the resignations of top officials at the University of Missouri.

Jason Hancock: 573-634-3565, @J_Hancock