California Smokers Face More Taxes With Proposition 86

Daily Titan
California State University Fullerton

(U-WIRE) FULLERTON, Calif. — The cost of a pack of cigarettes in California may jump to a record price if Proposition 86 passes in the November elections. The proposition will add an historic 300 percent, or $2.60, per pack.

Maria Robles, a registered nurse and spokesperson for Yes on Proposition 86 said that the proposition could save lives.
“California is facing a whole host of health care priorities,” Robles said. “Proposition 86 will reduce smoking significantly in the state particularly where our children are concerned and help us resolve these priorities.”

Robles referenced an independent study conducted by the California Department of Health. In the study, an increase in taxes of this magnitude would potentially prevent 700,000 underage children from smoking as well as help half a million adults to quit.

The proposition, initiated primarily by the health care industry, outlines the creation of a fund that would serve to pay, for among other things: Children’s health insurance; emergency care services; nurse education (including increased funding for nursing programs in the University of California, Cal State and community college systems); disease prevention, treatment and research; tobacco-use prevention and control and supplementation to Proposition 10 programs resultant of California’s last tobacco-tax increase in 1998. Opponents of the proposition, comprised largely of tobacco corporations, retailers, taxpayer groups and some law enforcement say that the measure will increase state deficit, crime rate and has clear and obvious language written into the ballot label that exempts hospitals from certain anti-trust laws.

“The biggest misconception is that this is a measure that would stop teens from smoking and help current smokers keep from smoking,” said No on Proposition 86 spokesperson, Carla Hass. “Only 10 percent of revenue goes to any kind of smoking cessation program. But it has been marketed as a stop smoking campaign.”
Hass said legislative analysis points to a clear money-trail that leads to large hospital corporations receiving 40 percent of fund revenue.

“The bottom line goes toward the hospital accounting offices who can use it to pay off bad debt or unpaid doctor fees,” Hass said. ” Basically, 85 percent of the money raised goes to things that are not tobacco related. It’s deceptive marketing on the part of the proponents of this campaign.”

Robles said the tobacco industry would say and do anything to protect their market.

“Because 90 percent of all people who become addicted do so before they turn 18, the California Department of Health services estimates that 43 percent of teens and kids would never start to smoke,” Robles said referencing the study’s conclusion the children and low-income families were most likely to be financially deterred from smoking.

“[The tobacco corporations] are going to lose 43 percent of their business so financially it’s not in their best interest for this to pass. The bottom line is: Who are you going to believe and who are you going to support? You can not believe that protecting our children’s health in not a priority.”

Opponents say that the tax places an unfair responsibility on a small population to help California recover some of it’s $16 billion in health care costs annually, half of which are attributed to smoking related health care costs according to the Yes On Proposition 86 Web site.

“Fundamentally, 14 percent of Californians smoke, so that 14 percent of our state population that will bear the brunt of this tax increase to fund all of California. And that simply is not fair.”

Hass also fears the repercussions the measure would have, if passed, in the long term.

“It’s a declining revenue source, in other words, as people reduce their consumption or find ways around paying the taxes: From Indian reservations or other states, or illegally,” she said. “Revenues won’t be what the proponents say they are.”

That’s a concern for Mike Fey, owner of S&H Tobacco in Brea.
“It’s not fair, it’s the pleasure police and they go after us as a scapegoat and if they tax tobacco like this what’s next?” Fey said. “They’ll hit alcohol and baseball and Nike shoes. It’s like, they can’t get the money from the budget they find this as a way.”

Fey is also concerned on the impact the tax will have on small businesses. He and his friends saw small business owners fail after the passage of Proposition 10, the last state tobacco increase that added 87 cents per pack.

“There was a tremendous decrease in sales and they lost tremendous revenue,” Fey said.

“There were 20 shops in one county that closed down, and if this one passes it will be double that.”

Robles said other concerns like terrorist activity revolving around the black-market sale of untaxed cigarettes that occurred in areas like New York and Canada, are merely scare tactics. Fey insists those activities happen regularly now and will probably increase with the tax.

Melissa Simpson, a freshman at Cal State Fullerton, said that despite conflicting reports on spending, or other social impacts the tax increase may have on the state, she would support the proposition.

“As long as the money goes toward the health system, I still really can’t see how that would be so bad,” she said.

For now members of the American Lung association, the American Cancer Society, the California Hospital Association and candidate for governor Phil Angelides, all who are listed as supporters, will have to lobby against the $40 million tobacco companies like R.J. Reynolds are investing to fight the proposition.