Nixon rejects proposal floated by some Democrats to hike cigarette tax
This article first appeared in the St. Louis Beacon, Aug. 31, 2011 - As he tours the state stumping for the special session, Gov. Jay Nixon appears keen on keeping it focused on the economic development proposals -- and the funding mechanisms -- that are to be the primary topics when legislators convene next week.
And he isn't keen on an alternate funding idea -- increasing the state's cigarette tax -- that is being promoted by some fellow Democrats in the state House.
"Now is not the time,'' Nixon said, during a news conference after a stop at Solae, a St. Louis-based company that is developing ways to use soy protein. The firm employs 360 people, and says half of its sales are exports to other countries.
The governor said his mantra has been "hold the line on taxes'' and he's sticking to it. The way to improve the state economically, said Nixon, is to create more jobs.
"If we grow the economy, then the revenues will come up,'' said Nixon, emphasizing that "86 percent of the state's income comes from sales and income taxes."
But some critics of the economic package contend that it unfairly snags a large chunk of its funding by restricting the state's tax breaks for low-income housing and ending the tax credit for low-income elderly, disabled and veterans who rent.
State Rep. Rory Ellinger, D-University City, said in an interview that he is among a group of House Democrats who believe that it would be fairer to increase Missouri's cigarette tax -- now among the nation's lowest -- to come up with some of the money needed to pay for the tax incentives sought by business and labor leaders, as well as Nixon and some Republican legislative leaders.
Increasing Missouri's cigarette tax by 17-cents a pack -- to 34 cents a pack -- would raise at least $74 million a year, Ellinger said. That's more than the $52 million the state would capture by eliminating the tax break for low-income renters.
Efforts to increase the state's cigarette tax failed at the ballot box in 2002 and 2006.
Nixon, meanwhile, plans to continue traveling the state the rest of this week promoting the various portions of the economic development package, which supporters say could create thousands of new jobs.