In Effect Tomorrow : Cigarette Tax Sparks Rush to Stock Up

As a dedicated smoker, Tom Brown would rather fight than quit. In recent years, he’s lost round after round to legislators and local officials who have severely curtailed his ability to puff in public. But these days, he’s really fuming.

Tomorrow, Brown and the rest of California’s estimated 5 million smokers will begin paying a much steeper price to light up. A new, 25-cent-a-pack levy on cigarettes goes into effect, the result of voter approval of Proposition 99 in the Nov. 8 election. The measure, passed by nearly 58% of the state’s voters, promises to raise an estimated $600 million for indigent health care, anti-smoking education and research for tobacco-related diseases.

For smokers such as Brown, though, the tax has just raised their ire.

“It’s a form of extortion,” said Brown, a 48-year-old Century City paralegal with a 1 1/2-pack-a-day habit. “The initiative is punitive and it’s scary. It singles out a part of the population that is seen as offensive by another group. You might as well put a tax on red meat and then use the money to fight heart disease. It’s no solution at all.”

Nonetheless, Brown is putting his feelings aside and responding in practical fashion. Like thousands of others from Sacramento to San Diego, he plans to buy a few extra cartons before midnight. Major supermarkets and tobacco wholesalers throughout the state are reporting a surge in cigarette and cigar sales as smokers stockpile to save money. A spokesman for the 130 Ralphs supermarket stores in Southern California said that cigarette sales were up as much as 20% in the last two weeks. And drug and liquor stores throughout the state have put up signs reminding smokers that prices go up tomorrow.

The tax jump will raise the price of a carton of cigarettes by $2.50 and the price of cigars and pipe tobacco by 42%. Smokers, who can now purchase a carton of their favorite cigarette brand for $10 to $12 at a discount store, will have to fork out as much as $15 for a carton of 10 packs. In many bars and restaurants, habitues will be confronted by $2-a-pack cigarette machines.

A random sampling of tobacco merchants in San Francisco, Oakland, Fresno and Costa Mesa indicated a marked increase in cigarette sales this month. In San Diego, the impact of the new tax was also felt by wholesalers who sell to military stores.

“We’re selling cigarettes like there’s no tomorrow,” said Doug Smith, general manager of Palisade Wholesale Inc., which sells to military exchanges and ships from its offices on Market Street. “Some guy bought 145 cartons of Chesterfield regulars. We don’t sell that many Chesterfield regulars in a year.”

Ned Roscoe, head of operations for the Customer Co., the parent firm of 90 Food & Liquor stores between Sacramento and Fresno, said that he has sold a month’s supply of cigarettes already this week. “You can save 20% by buying in advance and you can’t get that kind of return at a bank,” he said. “A lot of people are buying 30 cartons at a time. They’re lining up like they were going to a movie.”

Sales in Nevada

The crush from tobacco buyers is being felt as far away as Nevada, where gamblers and vacationers are making stops to discount tobacco stores in Reno and Las Vegas to avoid the hefty cigarette tax in their home state.

“They’ve been buying a case (60 cartons) at a time,” said Ron Johnson, a sales clerk at the Indian Colony Smoke Shop in Reno, which is exempt from Nevada’s $2-per-carton tax. “We’ve had at least 300 people from California come in during the last week. At this rate, we’ll be out of cigarettes by New Year’s.”

At Kelson Bros. Inc., a tobacco discount store on 6th Street near Western Avenue in Los Angeles, customers were buying enough cigarettes to last up to two or three months, manager Jim Kerns said. “It’s pretty crazy right now,” he said. “If people are quitting, they’re doing it in a strange way.”

Smoke cessation programs are also reporting a jump in inquiries this month, with callers listing the price of cigarettes as one of their incentives to quit.

Judy Simpson, a consultant with Smokenders, said that although smokers are notoriously short-term planners regarding their habit, the tax hike has forced them to ponder their next course of action.

“My expectation is that after Jan. 1, when they get slugged in the face with the new price, then we’ll really start to hear from them,” Simpson said. “But the price won’t help them quit smoking. It will just force them to think about it more.”

This week, Philip Morris Inc., the nation’s largest tobacco manufacturer, began a newspaper ad campaign throughout California offering smokers 10 free packs if they buy four cartons of the company’s brands. The ad included a reminder to smokers about the new price hike and advised them to “start saving right now.” Other tobacco producers are pushing low-cost “generic” cigarettes, which can cost as little as $8 per carton, in full-page newspaper ads.

Yet despite an $18-million pre-election ad campaign to defeat Proposition 99 and projections of a revenue drop-off of up to 15% in California, officials at Philip Morris and R. J. Reynolds Tobacco Co., the country’s two largest cigarette makers, deny any special plans to address the tax hike. The tobacco giants say they expect an increase in sales of low-cost brands, but will continue to push their biggest sellers. Industry officials say they can afford any sales drop-off, claiming that it is the state’s smokers who will be hurt.

“It places a tremendous burden on the smokers in California and that’s unfair,” said Steve Weiss, spokesman for Philip Morris. “People are still going to smoke. They’re just going to have to pay a lot more for it. I wouldn’t be surprised to see the state’s smokers gather together to try and get it reversed.”

Andrew Lee, president of the American Lung Assn. chapter in Los Angeles County, said he believes that the main reason the tobacco industry was so incensed about the smoking initiative is that the tax money is earmarked for programs to deter further smoking, particularly among teens.

Of the money raised by the tax, about 45% has been pledged to paying health care costs of uninsured poor people and 20% for financing greatly expanded anti-smoking education programs. Another 5% is to be spent researching tobacco-related diseases, with an additional amount spent on improving state parks. The Legislature gets the remaining 25% for other programs as needed.

When the tax hike takes effect, it is expected to dump $1.6 million a day into the state Treasury.

Lee has little sympathy for the state’s smokers or tobacco merchants. “We’re not really too concerned,” he said. “Frankly, it will be good if some of them (sellers) go under.”

Brian Meharg, founder of Smokers Lib, which promotes so-called non-addictive smoking, said he was not surprised by the voters’ reaction in November. Meharg, who started the group in his Hollywood home 10 years ago and wrote a book called “How To Stop Smoking Without Really Quitting,” said voters passed Proposition 99 because they saw it as practical.

But, he said, “We’re opposed to the initiative because it asks people to give up smoking for the wrong reason. To the real addict, raising the price won’t make much difference.”

Such sentiment is not shared by Brown. He enjoys puffing a cigarette so much that he said it ranks among the top pleasures in his life, just behind sex, two rungs below listening to Mahler and one notch above food of any kind.

Still, he said, the health danger did motivate him to quit once. He entered a program to stop smoking several years ago, but by the time he graduated, “the only thing that happened was I found I was unable to breathe out of my nose.”

“Already there is so much pressure on smokers that this can’t help,” Brown said. “You feel pressure from nonsmokers in restaurants and in offices. We’re constantly bombarded with no-smoking signs.

“In essence, the whole initiative is hypocritical. You have a highly addictive substance that is subsidized by the federal government on one hand, and on the other, you have the surgeon general warning you of its great dangers. If they were going to use all the money to rehabilitate smokers it would be one thing, but this doesn’t make any more sense than to raise the tax on candy because it leads to obesity. It’s absurd.”

Times staff writers Kim Jackson and Michael Granberry contributed to this story.