Tobacco companies have funneled more than $18 million into dueling campaigns to raise Missouri’s lowest-in-the-nation cigarette tax.
And most of the money pouring into the state isn’t being spent to kill the proposed tax increases.
Rather, in a twist for an industry typically averse to tax increases on its products, the makers of cigarette brands such as Camel, Newport, Decade and Exeter are the primary funding sources in support the initiatives on the Nov. 8 ballot.
By contrast, for example, Philip Morris USA and the parent company of RJ Reynolds have contributed more than $71 million to fight a proposed cigarette tax increase on the ballot in California, according figures compiled by the California secretary of state’s office.
In all, four states have measures on their ballots asking voters to increase taxes on cigarettes.
Ron Leone, executive director of the Missouri Petroleum Marketers and Convenience Store Association, said the money flow in the Show-Me State was unlikely to stop with less than two weeks to go before voters head to the polls.
“I wouldn’t be surprised if that amount goes up even higher,” Leone said.
Both tax increase measures have been opposed by groups including the American Cancer Society and the American Heart Association, which say neither increase is big enough.
One of the proposals, known as Proposition A, would increase the state’s 17-cents-a-pack tax by 23 cents, with the proceeds going to pay for transportation improvements. It is supported by Leone’s group.
The two big players financing that effort are North Carolina-based Cheyenne International and XCaliber International of Oklahoma. Cheyenne has sent $2.8 million to the fight, while XCaliber has contributed $2.9 million.
The other proposal, known as Amendment 3, would phase in a 60-cents-per-pack tax over four years to pay for early childhood programs.
Reynolds American Inc., the parent company of tobacco giant RJ Reynolds, has contributed $12.5 million to the cause.
RAI spokesman Bryan Hatchell said it was the first time the company had backed a tax increase.
“We believe Amendment 3 is both fair to our consumers and clearly in the best interests of the people of Missouri,” Hatchell said in an email.
But there also is a dispute within the dispute. Large tobacco companies such as Reynolds want to change Missouri laws that allow smaller tobacco companies to avoid making payments imposed by a 1998 court settlement.
Amendment 3, if approved by voters, would close that loophole and require retailers to impose an additional 67-cents-a-pack tax on small makers such as XCaliber International and Cheyenne International. That would result in the tax on their brands’ rising by $1.27 per pack.
Hatchell said closing the loophole “ensures that Missouri will finally receive the millions in revenue that these cigarette companies have evaded paying for years.”
Proposition A contains no such clause.
In essence, money being contributed by the companies has as much to do with supporting their chosen initiative as with killing the one they don’t like.
Petroleum marketers and convenience store operators, which are being bankrolled largely by the smaller tobacco companies, have enlisted member stores to urge customers to defeat Amendment 3.
Along with yard signs, the campaign is relying on TV and radio ads and in-store appeals arguing that the increase sought for early childhood is too high, Leone said.
“We’re hoping to have the resources to educate the voters,” Leone said. “Big Tobacco is taking Amendment 3 very seriously. Ultimately it crushes their competition. It helps to cement their market share.”
The largest recipient of money from Reynolds has been the “Vote Yes on 3 for Kids” campaign committee. During the most recent fundraising quarter, the campaign reported spending $100,000 on digital advertising and $104,000 on ad production.
If approved, the 60-cent increase would generate an estimated $300 million for early childhood programs.
If the lower, 23-cents-per-pack increase is approved, it would raise an estimated $100 million for transportation improvements.
If both are approved by voters, both could go into effect, increasing Missouri’s tobacco tax by 83 cents a pack. Even with that increase, Missouri’s tobacco tax would still be lower than that in at least 34 other states.
A spokesman for RAI did not immediately return a request for comment.