Proposition B increases state funding for higher education

By Brian Ramsay

October 30, 2012

It is well known that colleges across Missouri are in financial slumps. On Nov. 6, Missourians will be given a chance to vote on Proposition B that could generate an estimated $85 million annually towards the state of Missouri’s higher education, according to the Missouri Western Board of Governors. Proposition B is an increase in taxes on tobacco purchases in Missouri. As with anything or anyone that needs voting on, there are going to be pros and cons. To add to that, no matter what a person’s position, that person is always going to anger someone else. “The American Cancer Society started the initiative on the ballot,” Ann Pearce, special assistant to President Dr. Robert Vartabedian, said about Proposition B. “Missouri has the lowest tobacco tax in the nation. This would bring us up to 33rd. So it’s not like its moving us up to the top of the pack, no pun intended.” The current tax rate on cigarettes in Missouri is 17 cents per pack. If Proposition B passes, tobacco tax would be raised to 90 cents per pack. This tax would apply to all tobacco and their products. Cigarettes, roll your own tobacco, cigars, smokeless tobacco such as snuff, and even papers would be included in this tax. The money is split into percentages; 50 percent of the generated money from this tax would go to elementary and secondary education, 30 percent would go to higher education and 20 percent would go to offer health initiatives to help people stop smoking. “The money that is given to the institutions of higher education is based on their core funding from the state from the previous fiscal year,” Pearce said. “Twenty-five percent of that money has to go to help prepare the health professionals.” According to Rick Gilmore, interim vice president for Financial Planning and Administration, the overall money expected for the state of Missouri is between $280-$300 million statewide. However, the 2012 Initiative Petitions Approved for Circulation in Missouri clearly states that “[t]he additional actual costs incurred by the state in collecting and enforcing the taxes imposed may be paid from moneys appropriated from the Health and Education Trust Fund for that purpose, not to exceed one and one half of one percent of the total moneys collected in that fiscal year,” meaning that 1.5 percent of the money made from this tax is going into cost of collection. Gilmore says that $80-$90 million will be split between Missouri’s four-year institutions and the community colleges. “Missouri Western's share of that, I’ve estimated depending on where it falls, should be about $2 million to $2.1 million,” Gilmore said. Twenty-five percent of that $2 million will be put towards the health industries in what is called “Caring for Missourians” and the remaining 75 percent can be used for other things like salaries, equipment, renovations of facilities, and things of that nature. Some people have hopes of Proposition B passing. Kathleen O’Conner, chairman and associate professor of the department of nursing, believes that the number one reason Proposition B is important is to try and decrease the number of smoking related illnesses. “One way to discourage smoking is to increase the cost,” O’Conner says. “It’s a bit at odds if we say we stand to get money from that tax if it passes. The ultimate goal would be to decrease the amount of smokers, which would decrease the amount of money that tax generates.” Decreasing the amount of smokers among adults and teens is the goal of the American Cancer Society and the Show-Me a Brighter Future program. “Ethically I couldn’t say anything different,” O’Conner said. “I would hope that the eventuality is that there are fewer smokers.” A few may not vote at all just because of problems with the government in the past. “Whenever you have a bill to increase revenues, that bill doesn’t ever dictate where that money is going to go,” biology major Travis Birkhead said. “The budget that gets passed by the legislature dictates where the money goes. Unless that money is written into the legislature, that it will go into a special fund that is not part of the general fund.” The Initiative Petition says any money collected from this tax will be placed in something called the “Health and Education Trust Fund.” “Even then, we see when the national government implemented Social Security,” Birkhead said. “Then they turned around, the legislature not the people, voted to roll that fund into the general fund. So at this point the Social Security fund is just a budget item and a general fund, so your Social Security tax is just an additional tax.” Of course there are people who are in opposition of Proposition B but not just because of the increase in cost of cigarettes. “It’s going to have that trickle-down effect,” sociology major Kirk Gries said. “You’re hurting the retailers, because they are not going to be able to sell. Therefore they aren’t going to order. They are also going to go out of business because they can’t afford to pay their bills, like rent and utilities, and that’s going to hurt the city.” Kirk continued on how Proposition B may hurt people on down the line. “Now because the company sells go down, the company won't be buying their tobacco from the tobacco farmers," Gries said. "The companies don’t buy the tobacco from the tobacco farmers, and guess what, the tobacco farmers go out of business. The banks will now hurt, because now they have to figure out what they are going to do with this property that is owed on.” People may even be on the fence or undecided at this time on what to vote. “On one side, you may be saving lives because hopefully people will quit or never even start,” nursing major Kenny Dinning said. “On the other hand, you could be ruining family businesses. That may be their only means of income, being in the cigarette business.” There may still be concerns yet. “If you let the government increase taxes on cigarettes and it works out in their favor,” Dinning said, “then who’s to say that they won’t increase taxes later, on things we may need like oil or the clothes on our backs?” To get a full view of the amendments on Proposition B, visit website of the people who oppose the Proposition B at