California Voters to Have Say Over Cigarette Tax Hike Measure

California Voters to Have Say Over Cigarette Tax Hike Measure
May 11, 2012

Steve Stanek

Steve Stanek (sstanek@heartland.org) is a research fellow at The Heartland Institute and managing... (read full bio)

California citizens will soon vote on whether to raise the state’s cigarette tax from 87 cents to $1.87 a pack, with supporters saying the money would fund cancer research and opponents saying there’s no guarantee how the money would be used, or where.

The June 5 ballot measure known as Proposition 29 and more formally as the California Cancer Research Act has retailers and taxpayer advocates rising in opposition, with many arguing it fails to meet the state’s fiscal needs. The measure also raises taxes on other tobacco products.

Supporters say Prop 29 would provide more money for cancer research, tobacco law enforcement, and smoking prevention programs to reduce illness and medical-related costs.

‘Emotional Appeal’

“This is a proposition that is cloaked in emotional appeal. Who would not want cancer research? . . . But this proposition does not address the priorities of the state of California,” said Jessica Headley, communications director for Americans for Prosperity in California. “You have $735 million going towards cancer research. Meanwhile, California is facing a $10 billion budget deficit.”

She added, “This proposition doesn’t mandate that the funds have to stay here in California. You could have the [research] created anywhere in America or internationally, and it doesn’t designate that the revenues return to the State of California, either. So that’s one of the problems. Another one is that, by law, 40 percent of new taxes in California are to go to education. This has a loophole to get around that. . . . People who are concerned about education, their ears need to perk up over this, because the money is not going to education as it should be.”

Supporters include the American Cancer Society, American Heart Association, and American Lung Association. Cancer survivor and former California State Sen. Don Perata of Oakland has been perhaps the most recognized political personality to champion Prop 29.

‘Prey on Poor People’

"These bastard tobacco companies just prey on poor people and the young,” Perata told The Los Angeles Times. “I remember when I was [Alameda County] supervisor, back in the ’90s, they'd play ethnically appropriate music in East Oakland and parade out buxom women to hand out free samples."

Stanton Glantz of the Center for Tobacco Control Research and Education at the University of California-San Francisco issued a paper in February in which he wrote tobacco consumption would fall “by an average of $1.0 billion per year for the first five years after the CCRA passes” with small losses in retail jobs but gains in other areas for an overall net increase in economic activity.

Others point out the problem with relying on taxes on a product with falling sales.

The California Taxpayers Association argues Prop 29 “is a classic example of ballot-box budgeting that would establish a new program funded by a declining revenue source. The new bureaucracy would duplicate government programs already funded by taxpayers, and none of the money from the tax hike would be used to pay for cancer treatment. “

Steve Stanek

Steve Stanek (sstanek@heartland.org) is a research fellow at The Heartland Institute and managing... (read full bio)