Will Sam Brownback's Sin Taxes Send Smokers Scrambling Across the Border?

Opponents of Kansas Gov. Sam Brownback’s (R) proposal to raise the taxes on a pack of cigarettes and a bottle of liquor warn the price hikes could result in a parade of drinkers and smokers crossing the border from Kansas City, Kansas, into Kansas City, Mo., for their next bottle or pack.

Missouri retailers are big fans of Brownback’s plan to pump more money into Kansas state coffers. Health organizations in the state of Kansas love it too, for a different reason.

Smokers, drinkers and even some teetotalers in Kansas have another opinion. And if anyone had told Brownback he’d be doing this three years ago, he would have called them tax-and-spend fanatics.

Brownback cut a number of state taxes in 2012, promising the result would be strong business growth that would more than make up the difference in tax revenue.

Instead, the result was a budget shortfall that forced Brownback to slash state services. Kansas’ credit rating fell and Brownback nearly lost his job in November.

Now he is proposing drastic increases in Kansas’ so-called sin taxes on cigarettes and alcohol. Brownback wants the Kansas Legislature to triple the tax on cigarettes from 79 cents per pack to $2.29 per pack and hike the tax on liquor from 8 percent to 12 percent.

However, Brownback, in his two-year budget proposal that was released following his January State of the State address, promises to continue working to lower the state income tax to the point of elimination.

As he said in his State of the State address, “States with no income tax consistently grow faster than those with high income taxes.”

“Kansas has created more than 59,000 new private sector jobs. Our unemployment rate is tied for the tenth lowest in America and more Kansans are working today than ever in the history of the state,” Brownback also said in his State of the State, as he refused to admit failure.

“Personal income is rising, we are addressing the causes of poverty, and welfare rolls have been cut in half,” he added.

Try telling that to a smoker who is looking at paying the 11th highest price in America for a pack of coffin nails if the Kansas Legislature approves Brownback’s proposal.

Even some non-smokers and drinkers in Kansas feel sorry for those who would be paying a higher price for the pleasure of sin, if only because of a feeling that sin taxes are not fair.

“Oh the buzz on the street here is that the hike in cigarette tax is just hateful. I don't smoke, never have. It just seems awful to me to target a group of people who enjoy smoking instead of going after the rich and cutting out their tax loopholes,” one Kansas taxpayer who asked to remain anonymous told PJM. “Make the elite population pay for the right to live as they choose.”

No matter who’s against it and who is for it, Brownback will have to get this tax hike proposal through the state legislature, and so far it does not look like the governor has many votes on his side.

“It’s a hit on anybody who smokes. A hit on anybody who drinks. But these kind of consumption taxes always hit lower income people harder,” Sen. Laura Kelly(D) told the Wichita Eagle.

“You’d put them in the regressive tax category.”

But tax fairness aside, those who are trying to make Kansas healthier are close to ecstatic. A coalition of a dozen groups — Kansans for a Healthy Future — supports Brownback’s tax plan.

“Raising the current tax by $1.50 per pack, an amount supported by 70 percent of Kansans in a recent poll, should bring down smoking rates that have stagnated in recent years,” said Kansans for a Healthy Future in a statement on the group’s website.

“The tax must be significant enough to offset tobacco promotion pricing designed to keep cigarettes inexpensive,” the statement continued.

Still, no one seems to be happier than the people who make their living selling alcohol and cigarettes in neighboring Missouri.

“My store will be busier, there’s no doubt about it,” Steve Barber, a Kansas City, Mo., tobacco store owner told the Kansas City Star.

People supporting a higher tobacco tax in Kansas could argue that smokers motivated by price could already be shopping in Missouri.

People who buy their smokes from stores like Barber’s in Missouri paid the lowest tax on tobacco in America in 2014 – just 17 cents in tax per pack of cigarettes.

Missouri may be the lowest-price per pack option for smokers in Kansas who decide to drive to save a few dollars, but they could also save money with a cigarette run to Nebraska where the tobacco tax was only 64 cents.

Colorado is another alternative for smokers in Kansas.  The tobacco tax was 84 cents in 2014 in the Rocky Mountain State — and you know that’s not all they are smoking. Oklahoma charged $1.03 a pack in taxes in 2014.

History shows the price of a pack may not be as much of a factor in where Kansans buy their favorite smokes as opponents to Brownback’s proposal would argue.

A Tobacco Free Kids organization study showed the last time cigarette taxes were raised in Kansas, by a total of 55 cents, cigarette sales in Missouri did not increase.

The study also showed annual pack sales in Missouri actually declined by 4.2 million packs compared to the year before the Kansas tax increase went into effect.

So, more people in Kansas quit smoking, coincidentally or not, when the habit got more expensive.

It is not just cigarette sales that could be affected by Brownback’s proposal. The price of a bottle of liquor would also go up in Kansas. And drinkers could also cross the border for some spiritual refreshment.

“It would hurt,” Steven Berger, owner of a liquor store in Lawrence, Kansas, voted the most hungover city in America by Business Insider, told the Lawrence Journal-World.

However, Berger doesn’t think it will wreck his business.

“It’s like gasoline,” Berger said. “People will still drive when the prices go up.”