Mo. Lawmakers Quarrel Over Cigarette-Tax Gain

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What started as a legislative attempt to raise money for Missouri's public schools by increasing the tax on cigarettes has developed into a political donnybrook that may ultimately yield relatively little for the schools.

The state's House and Senate have less than a week to work out substantial differences over how much to raise the tax and how to distribute the proceeds.

The issue has raised arguments about equity for urban and "property-poor" school districts, about Missouri's ability to compete for business with neighboring states, and about the entire system of distributing state aid to education. Furthermore, because it has been linked to school desegregation, the bill's progress has been impeded by the racial tensions that have been evident throughout the legislative session.

And because the tax increase would raise at most $47 million--out of the $102 million in new revenue the state board of education says the schools will need next year--some state and local education officials are wondering whether it has been worth the fight.

As passed by the House, the bill would raise the state sales tax on cigarettes from 9 cents to 16 cents per package. The $30 million to $47 million in estimated new revenue would be distributed to school districts using a new "cost-of-education" index based on districts' needs, and districts would be allowed to use a three-year average in figuring average daily attendance, on which state aid is based. The latter provision was intended to cushion the effects of declining enrollment.

The Senate version, passed this month, provides for a tax of 13 cents per package. The $20 million to $24 million in new revenue would be distributed on a "flat-grant" basis, with an equal amount per pupil regardless of districts' needs or variations in costs.

'Fair Share Fund'

Under the flat grant, called the "Fair Share Fund" by its Senate sponsor, districts with high property wealth would receive the same amount per pupil as poorer districts; both the current state-aid formula and the House's proposed cost-of-education index take local taxing capacity into account.

Any proceeds from an increased cigarette tax would be added to the schools' budget increase from the general fund. At most, estimated John W. Alberty, school-finance di-rector for the state Department of Elementary and Secondary Education, the legislature is expected to appropriate an additional $26 million for education out of the general fund.

The state contributed nearly $708 million in general aid to schools this year--approximately 46 percent of the average district's operating budget.

"[The increase under consideration] is a relatively small proportion in respect to the hard times we're having," Mr. Alberty said.

Districts are already feeling the pinch, Mr. Alberty said, because the state's cash-flow problems have forced the delay of some $100 million in aid payments. In a normal year, he said, school districts would have received about 80 percent of their state allotments by March; because of the delay, they have received only about 62 percent.

Under Missouri law, all proceeds from cigarette taxes are dedicated to education and 75 percent of the money must go toward teachers' salaries--a provision that has prompted some lawmakers to charge that the bill, in any form, is simply a way of raising teachers' salaries.

Other opponents of the measure contend that the tax increase would put Missouri at a competitive disadvantage because some of the state's municipalities also levy ciga-rette taxes, and several surrounding states already have much lower taxes. Residents of border areas, they argue, would simply cross state lines to buy their cigarettes.

Volatile Issue

And another volatile issue--busing for school desegregation--has at times appeared to threaten school-aid measures. Desegregation has been divisive in the St. Louis area, where an interdistrict case is in court, and in Kansas City, where a metropolitan-desegregation suit is, for the time being, dormant.

But it is of interest to legislators from all around the state, Mr. Alberty and others said, because the state was found partially liable for busing costs in the St. Louis case and paid approximately $11 million last year for busing there.

The House version of the cigarette-tax bill, for example, contains an amendment forbidding the use of any of the proceeds for desegregation busing. A similar amendment was offered in the Senate but was withdrawn after another senator proposed that all revenues from the tax increase be used for desegregation.

So pervasive has the busing issue been this session that seven anti-busing bills have been introduced, legislators have at times been reduced to racial name-calling, and the Senate voted to cut off debate, for only the second time in a century, on an anti-busing bill.

Vol. 01, Issue 31

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