Voters will decide on several tax issues on the November ballot. MBP’s positions are as follows. More information on each issue is below.
Amendment 1 – Parks, Soil, & Water Sales Tax
Amendment 3 – Cigarette Tax Increase for Early Education & Health
Amendment 4 – Prohibits Expansion of Sales Tax
Proposition A – Sales Tax for Transportation
Amendment 1: Parks, Soil and Water Sales Tax
MBP Position: Support
Amendment 1 would renew Missouri’s dedicated sales tax for parks, soil and water. The sales tax of 1/10th of 1 percent was originally established in 1984, and is subject to voter approval for renewal every 10 years under this amendment. Funding from the tax currently generates about $90 million per year in dedicated revenue, with 50 percent of the funding dedicated to state parks and historic sites, and 50 percent of the funding dedicated to soil and water conservation efforts.
This translates into funding to provide the following public benefits:
- Maintains Missouri’s 88 state parks and historic sites, keeping the parks free and open to the public;
- Prevents of soil erosion, protecting farmland and waterways; and
- Ensures clean water and water supplies.
The Amendment is supported by a number of organizations and individuals, including the Conservation Federation of Missouri, Great Rivers Greenway, Greenbelt Land Trust of Mid-Missouri, Missouri Association of Soil & Water, Conservation Districts, Missouri Bird Conservation Initiative, Missouri Coalition for the Environment, Missouri Corn Growers Association, Missouri Farm Bureau, Missouri Parks Association, Missouri Prairie Foundation, Missouri Soybean Association, Missouri State Parks Foundation, The Nature Conservancy, Ozark Regional Land Trust, The Sierra Club, Missouri Chapter
You can learn more at https://soilwaterparks.com
Amendment 3: Cigarette Tax Increase for Early Education & Health
MBP Position: Support
Amendment 3, sponsored by Raise Your Hand for Kids, will appear on the ballot this November. When fully implemented, the measure would provide $300 million annually in new, dedicated funding for investments in early childhood health and education, as well as smoking-cessation programs for pregnant mothers and youth. The funding comes through an incremental increase in Missouri’s cigarette tax of 60 cents. Missouri’s cigarette tax is currently the lowest in the nation. At 17 cents per pack, it is well below the national average of $1.65 per pack, and falls behind all of Missouri’s neighbors. In fact, even after the 60 cent increase, Missouri’s cigarette tax would still fall below most of our neighbors (with the exception of Kentucky, Nebraska and Tennessee).
Funding raised by the cigarette tax increase will be dedicated to a new fund that distributes the money for the following:
- Between 75 and 85 percent of the funds will go to improving early childhood education, from preschool to parent and family support and education.
- 10 to 15 percent will help hospitals and other health care facilities improve access to quality early childhood health and development programs such as preventative health care, obesity prevention and infant mortality prevention.
- 5 to 10 percent will support smoking cessation and prevention programs for pregnant mothers and youth.
This translates into the following public benefits:
- Increasing access to and improving the quality of preschools in Missouri;
- Home visitation programs like Parents as Teachers;
- Professional development for early childhood education providers;
- Health and developmental screenings and preventative health care for children ages birth through 5; and
- Smoking cessation and prevention programs for pregnant mothers and teens.
Research shows investments in early childhood education lower high school dropout rates, reduce crime, cut the cost of social services, and improve the health and education of children, which results in significant savings for taxpayers.
You can learn more at RaiseYourHandForKids.org, where you can sign up to receive updates on the initiative. You can also follow the campaign on Facebook at https://www.facebook.com/raiseyourhandforkids/ and on Twitter at https://twitter.com/RYH4KMO
Amendment 4: Prohibits Expansion of Sales Tax
MBP Position: Oppose
Amendment 4 would create a constitutional amendment prohibiting any new state or local sales or use tax on any service or transaction that was not subject to tax as of January 2015. The Missouri Budget Project opposes this amendment because of the many unintended consequences that would result from creating a constitutional limit on Missouri’s sales tax, including the following:
- Missouri’s sales tax law would never be able to adjust to the changing economy. For example, Missourians used to access music by purchasing records at the local record store. Record, CDs and tapes are all subject to sales tax. But, with the development of digital music, more and more Missourians are accessing their music as downloads, and rarely purchase records anymore. These downloads are not currently subject to sales tax, and the amendment would prohibit the sales tax from ever applying to downloads simply because they aren’t currently subject to tax. The same is true for videos, computer software, and other technological advancements that we aren’t even aware of yet.
- Amendment 4 would compromise Missouri’s ability to invest in education, health, public safety, transportation and other critical public services. Because the measure is a constitutional restriction, over time, as Missouri’s economy continues to change, this amendment will likely result in a significant erosion of the sales tax base, and compromise Missouri’s ability to invest in public services, like quality schools and safe neighborhoods. The sales tax supports over 22 percent of Missouri’s state general revenue budget in the current year. The amendment would destabilize this key component of Missouri’s ability to fund public services, and is likely to result in either budget cuts or require large increases in the sales tax rate to make up for the limited base.
- Amendment 4 would also undermine funding for State Parks, Soil and Water, and Conservation. It’s somewhat ironic that Amendment 4 is on the same ballot as Amendment 1, the renewal of Missouri’s dedicated sales taxes for the maintenance of state parks, soil and water. In the same way that Amendment 4 would undermine Missouri’s general revenue sales tax, it would also undermine the sales tax base for dedicated funding streams including funding for our parks, soil and water as provided in Amendment 1, as well as Missouri’s separate conservation sales tax of that was approved by voters in 1976.
- Amendment 4 will likely result in local property tax increases. Municipalities throughout the state rely on the local sales tax to fund their services. If this funding source is eroded, municipalities may be forced to turn to increases in property taxes to make up the difference.
- Amendment 4 makes a phony promise. Backers of the amendment claim they are protecting Missourians from threats to extend sales taxes to services that Missourians use every day, like child care, rent, health care and funerals. But, there are no current efforts in Missouri to tax these or other services in Missouri. In fact, real estate transactions are already prohibited from sales tax due to a 2010 ballot measure promoted by the Realtors Association. More significantly, because of existing constitutional requirements, any proposals to extend sales tax to services in Missouri would require a vote of the people.
Proposition A: Cigarette Tax for Transportation
MBP Position: Oppose
Proposition A would increase Missouri’s cigarette tax by 23 cents and dedicate the funding to transportation. Rather than a constitutional amendment, Proposition A would create a change in statute. The Missouri Budget Project opposes the proposition because it contains troublesome, deceptive language that weakens the long-term stability of this revenue source.
Proposition A contains a “poison pill” that is likely unconstitutional. The language described below means that this tax could disappear at any time if another tobacco tax measure is placed on any ballot at any time. Even if it doesn’t pass, just the action of placing a tobacco tax on a local or statewide ballot would automatically require the repeal of the tax increase created by Proposition A. This deceives voters and weakens other opportunities to secure a stable source of revenue for transportation.
The proposition would generate about $95 million per year in new revenue for transportation infrastructure. Though funding is definitely needed for transportation, the amount provided by the proposal pales in comparison to the actual need. In 2009, MODOT had a capital program budget of $1.4 billion. The amount was projected to drop to $325 million by 2016, well below the level needed to maintain Missouri’s roads and bridges. Because of this decline, early in 2016 the Missouri Highways and Transportation Commission approved a plan to spend down its road fund reserve balance, bringing the capital budget to about $800 million annually over the next five years.
The addition of $95 million in revenue annually for MODOT would be helpful. However, adequate funding for MODOT was not the intent of the proposition’s proponents. Instead, the measure is intended to serve as a decoy to drive voters away from supporting Amendment 3.
The “poison pill” language included in the Proposition follows:
“The additional taxes levied in subsections 1 and 2 of this section shall immediately, automatically and permanently be repealed and reduced to zero under any of the following events:
(1) In the event any tax or fee increase on some or all cigarettes or other tobacco products is officially certified to be placed on any local or statewide ballot by the Secretary of State or any other election official at any time; or
(2) In the event any provision of subsections 1 through 9 of this section is ruled null and void, invalid, unlawful, severable or unconstitutional for any reason by any state or federal court of law.”