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Tobacco tax increase would be a boon for Columbia hospitals, MU

October 28, 2002
By: Jason McLure
State Capital Bureau

JEFFERSON CITY - A higher tax on Missourians who light up could spark a windfall of new revenue for some of Columbia's largest employers.

If passed, Proposition A could mean more than $20 million for University of Missouri Health Care and MU's life sciences departments, as well as additional money for Boone County Hospital.

The ballot measure would raise the state cigarette tax from 17 cents a pack to 55 cents a pack. Taxes on other tobacco products would jump 20 percent.

The tax is estimated to raise $343 million annually in new revenue. Of that, $48 million would be devoted to research in the life sciences.

Gwen Ratermann, director of government relations for MU Health Care, said she anticipates a third of that research money will go to MU.

The tax would also raise an additional $100 million to upgrade trauma and emergency services at hospitals statewide. Ratermann said she expects MU Health Care's trauma center to get as much as $4 million of that money.

The lion's share of increased tobacco tax revenues, an estimated $147 million, is earmarked for healthcare for low-income families and prescription drugs for seniors. Ratermann said MU Healthcare would see substantial benefit from this part of the tax as well, though she declined to estimate how much.

Professor John Walker of MU's Department of Biological Sciences said he and other researchers had high hopes last year when the governor set aside $20 million of the tobacco settlement for science research, only to see that money vaporize into the state budget.

Walker refused to give an estimate on MU's share of the increased tax, saying it was too early to be making predictions.

"It's a little premature," he said. "You don't want to count your chickens before they hatch."

State budget director Linda Luebbering has said that much of the money in the new tax, including the research money, is tightly earmarked for specific new spending programs. This makes the chances of the money being diverted to other causes, as happened with the settlement money, unlikely.

The state does not currently fund any life sciences research. Walker said he anticipates money from the new tax would be spent only on research institutions in Missouri.

Universities and research centers would have to compete for the new money, but Walker said it could also create important linkages between researchers across the state working on similar projects.

"It would create a situation that would be exponentially advantageous for all of research in Missouri," he added.