Supporters: Bill would close tobacco loophole, save taxpayers $50 million
JEFFERSON CITY - A loophole in a settlement agreement with tobacco companies has cost Missouri $50 million this year. The state has a chance to recover the money if the legislature is able to pass a bill before the end of the session.
Business, health care, education and law enforcement groups on Tuesday urged lawmakers to pass SB 1096. The legislation, if passed, would make Missouri the last state to close a tobacco loophole that could cost Missouri up to $1 billion in future payments to tobacco companies.
Attorney General Chris Koster negotiated a settlement with tobacco companies in February to resolve a contract dispute over annual tobacco payments to the state. The settlement shows Missouri would recover $50 million dollars already lost, shield itself from future losses, and receive an estimated $11 million increase to the payments tobacco companies make to Missouri beginning in 2020.
The legislature already missed an April 15 deadline that would have allowed the state to receive the $50 million with this year's payments, according to the Attorney General's office.
The bill's sponsor, Sen. Bob Dixon, R-Greene County, said there is still time for the legislature to recover the money.
"If we enact the reforms and close the loophole in the Master Settlement Agreement by the end of this legislative session, then it'll be potentially $53 million," he said. "Those funds would be included in next April's payment."
Joy Oesterly, Executive Director at Missouri KidsFirst, said, if the loophole is not closed, the loss of revenue could affect the organization's child advocacy groups that investigate child abuse.
"About one-third of their funding on a state-wide basis comes from state revenue and any cut to state revenue has the potential to cut those funds that go out to our child advocacy centers," she said.
The Senate moved the bill to the informal calendar Tuesday, so the bill can be brought up for debate as early as Wednesday. If passed, the bill will move to the House.