California and National Elections

Voters Reject Added Taxes on Cigarettes

BEKELEY - California smokers and tobacco retailers might soon breathe a sigh of relief.

Voters on Tuesday seemed set to reject Proposition 86, which would add a $2.60-per-pack tax on top of the current state levy of 87 cents to fund several health care programs.

Shortly before midnight, almost 60% of votes had been counted. Of those, 53.1% were against the measure and 46.9% in favor. The proposition was passing in only 10 counties out of 58, including Alameda, Contra Costa, Marin, Sonoma and Los Angeles. The margins were tight, most oscillating between 50 and 57%.

“We’re still confident the measure will pass,” said Maria Robles, a registered nurse who works on the “Yes to Prop 86” campaign. Robles said early results are usually a reflection of absentee ballots. “Those voters might not have seen our ads, which were broadcast over the past two weeks. We’re confident the situation will change as the counting continues,” she said.

Patrick Fleenor, chief economist at the Tax Foundations – a nonpartisan tax watchdog based in Washington, DC, which opposes Proposition 86 – said he hoped California voters would reject the measure. “All it would bring is an increase in tax-evasion related crimes,” he said. “It might discourage some people from smoking, but costs would by far outweigh benefits,” he added.

Proposition 86 would apply to all tobacco products, including cigars. From January 2007, smokers would have to pay an average of $6.60 for a pack of cigarettes. The money – an estimated $2.1 billion annually for 2007-2008 – would be used to fund a number of health programs, children’s health coverage and tobacco-prevention activities.

The measure was among the most heavily funded propositions on the ballot in California. Both critics and supporters have been investing massively to advance their campaigns. Opponents have poured in $58 million, mostly from Philip Morris and R.J. Reynolds tobacco companies. Supporters, led by California hospitals, have spent more than $13 million to get the measure passed.

Supporters – which included the California Hospital Association, the American Cancer Society and the American Heart Association – focused on the positive impact that the measure would have on California’s strained health resources.

So far, however, voters seem to share some of the opponents’ concerns, their main one being that too much money is being allocated to programs and activities not directly related to smoking. While one-fifth of the money would go to tobacco control and anti-cancer efforts, a third of the tax-levy would go to emergency room care and a fifth would fund health insurance protection plans for children.

In a hard-fought campaign, critics have been complaining about lack of accountability to taxpayers and have pointed to the impact that the measure might have on California’s 38,000 licensed tobacco retailers. Another big concern was the possible increase in crime and smuggling as a direct result of Proposition 86.

Critics also argued that previous tax hikes on cigarettes – there have been three in California recently, in 1996, 2000 and 2001 – never really worked in terms of having people quit smoking. Supporters of Proposition 86, on the other hand, insisted that previous efforts have proved successful, arguing that if passed, this new measure would reduce the number of cigarettes consumed in the state by more than 26 percent, or one quarter. It would also save the State $8.6 billion a year in smoking-related health costs, they said.

Central to the “Yes on Prop 86” campaign was a study by the California Department of Health Services, which says the measure would reduce the number of cigarettes consumed in the state by more than 26 percent, or one quarter. The measure would keep 700,000 youngsters from becoming adult smokers and prevent 300,000 smoking-related deaths, the study says. It would also save over $16 billion in health care cost, according to the same report.

Today, an estimated 20.9% of all adults in the US (about 44 million people) smoke, according to figures from the National Center for Chronic Disease Prevention and Health Promotion show.
With 18.5% of adult smokers (about 6 million people), California has one of the lowest smoking rates in the country, but tobacco remains the top cause of preventable death and disease in the state, according to the California Department of Health Services.

Nation-wide, ten tobacco and smoking propositions were on the ballot today either to increase taxes on cigarettes or ban smoking in public places. Counting is still underway.