The tobacco industry's strategy to kill a new statewide cigarette tax: Blow a lot of smoke

The tobacco industry's strategy to kill a new statewide cigarette tax: Blow a lot of smoke
Pedestrians pass by a smoke shop on Broadway in downtown Los Angeles in 2014. (Los Angeles Times)

Finally, there's something to laugh at in this glum election season. Thanks to the tobacco lobby.

These poison peddlers are actually very serious. They don't mean to evoke laughter. But what they're spewing is so disingenuous and hypocritical it's a joke.


The cigarette makers are bellyaching about the "wealthy special interests" — doctors, dentists, hospitals, health insurers — who are trying to "tax grab" on the Nov. 8 ballot. What's being grabbed, of course, is a hefty tax hike on tobacco products.

Proposition 56 would increase the cigarette tax by $2 per pack. All other tobacco products, including nicotine-laced electronic cigarettes, would get equivalent tax boosts.

That would raise an estimated $1 billion to $1.4 billion annually. Most of that money — 82%, or up to $1 billion — would go to the state's Medi-Cal healthcare program for the poor. Anti-smoking programs would get 13%. The University of California would receive 5% for research on tobacco-caused diseases.

You won't hear or read anything about tobacco taxes, however, in all of the anti-Proposition 56 TV ads and mailers. "Tobacco" is not a winning word. It's a turnoff for voters.

So the tobacco strategists rail against taxes generally without mentioning that the only people who would pay them are smokers, tobacco chewers and consumers of the sweet, nicotine-spiked e-cigarettes.

But the most inadvertently humorous aspect of the anti-56 campaign is the persistent crying over those so-called evil special interest doctors and dentists and healthcare facilities.

That's because there's hardly a bigger, more aggressive and potent special interest anywhere than Big Tobacco. It's the epitome of a wealthy special interest.

It already has poured more than $66 million into the anti-56 campaign. That's roughly twice as much as the measure's sponsors have put up.

During the past decade, tobacco companies have spent more than $203 million in California fighting proposed tax hikes on their products.

Tobacco firms very narrowly beat back tax initiatives in the 2006 and 2012 elections.

In 2012, Proposition 29 would have raised the cigarette tax just $1 a pack and used the money to create a new state cancer research entity. Opponents charged that liberal spenders were trying to create another bureaucracy. So this time, strategists eliminated that target by earmarking all the money for existing programs.

Every legislative session, there's a bill introduced to increase tobacco taxes. And it's blocked by the tobacco lobby, which controls most Republican votes plus those of some Democrats. Any tax increase requires a two-thirds majority vote of the Legislature.

That's why California has one of the lowest state cigarette taxes in the nation, ranking 37th. It's 87 cents per pack. The highest is New York's, at $4.35. The national average is $1.65.

On top of that, the federal government imposes a tax of $1.01 per pack. And there are state and local sales taxes.


So smokers are paying about $6 per pack these days, unless they're buying through the black market. The anti-56 camp says nearly a third of cigarettes smoked in California are smuggled, and that would only get worse if taxes were hiked.

Regardless of the tobacco lobby’s fierce opposition, the Democratic-controlled Legislature summoned enough courage this year to pass some landmark bills, and Gov. Jerry Brown signed them. One increased the legal smoking age from 18 to 21. Another regulated e-cigarettes like other tobacco products.

It also passed a bill that would have allowed counties to seek voter approval of local tobacco taxes, but Brown vetoed it.

The main goal of raising tobacco taxes is to motivate smokers to quit — which, of course, is why cigarette makers fight these proposals so ferociously. Researchers have found that for every 10% increase in the cigarette price, there's a 4% drop in use.

With Proposition 56, there's also a secondary goal: to generate enough money to raise reimbursement rates for Medi-Cal providers. The governor and Legislature cut those rates by 10% during the recession and have refused to restore them.

Consequently, many physicians, dentists and health facilities refuse to accept Medi-Cal patients, who make up about a third of the California population. These people often wind up in hospital emergency rooms, where care is extraordinarily expensive and bills are footed by taxpayers or passed on to privately insured citizens through higher premiums.

"If it is a critical issue facing California, then it should be addressed in the Legislature rather than putting a targeted tax on one industry," says Beth Miller, a spokeswoman for the anti-56 campaign.

The prospect of higher Medi-Cal rates is what has motivated the California Hospital Assn. to donate $10 million to Proposition 56. The California medical and dental associations have contributed $1 million each. The Service Employees International Union is in for about $2.3 million.

The biggest individual donor by far is San Francisco billionaire Tom Steyer, a climate-change activist and former hedge fund manager who's a possible Democratic gubernatorial candidate in 2018. He has donated $7.8 million to Proposition 56.

"Tobacco use is the No. 1 cause of preventable death in California," Steyer says. "When you raise the tax, smoking goes down."

Another deception by the anti-56 campaign is that it would "cheat schools" by excluding the higher tobacco tax from the state revenue that determines education spending. Cheat? The initiative would have no effect, one way or the other, on the level of school funding.

The anti-56 campaign not only is laughable, it's shamefully cynical.

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