Reed Saxon / Associated Press (m55tsqpd20120622214447/600 )
Proponents of a $1-per-pack tax on tobacco conceded defeat Friday after weeks of hoping that votes on late-arriving ballots could erase a June 5 electoral deficit.
Proposition 29, aimed at raising $860 million for research on tobacco-related diseases and smoking-prevention programs, faced unrelenting opposition by tobacco giants Philip Morris USA and R.J. Reynolds Tobacco Co., which poured nearly $47 million into fighting the measure.
The No on 29 campaign declined to declare victory Friday, deciding to wait for the official vote to be announced by the California secretary of state's office in early July. Along with the tobacco giants, the opposition was supported by the California Chamber of Commerce and other business and anti-tax groups.
"We are obviously encouraged by the current margin," said campaign spokeswoman Beth Miller. "We have said from the very beginning that as voters took a closer look at Proposition 29, they would see the glaring flaws in the measure."
Jim Knox of the American Cancer Society's California chapter called the apparent result "a sad and disappointing outcome for the public health of all Californians, but a big victory for out-of-state tobacco companies, an industry that annually kills 5 million people globally and used their profits to defeat this."
Proposition 29 trailed by 63,000 votes on primary election night, but that gap narrowed steadily as election officials tallied mail-in, provisional and damaged ballots. Earlier this week, the gap closed to just over 13,000 votes.
By Friday, the ballot measure was losing by more than 29,000 votes with only 100,000 uncounted ballots, too few to close the gap. With more than 5 million ballots counted, the difference between victory and defeat amounted to less than 1 percentage point.
Statewide support for the tobacco tax, as suggested by opinion polls, began to erode during a barrage of opposition advertisements paid for by the tobacco industry.
The television spots, including one featuring a Northern California doctor wearing a white lab coat, said the measure would create a bureaucratic boondoggle and allow some of the money to be funneled out of state. An appointed panel of nine would have administered the tobacco tax money.
"The interesting thing about the opposition campaign is that they never argued against cigarette taxes. The main thrust of their message was that the money could be spent in better ways," said Dan Schnur, director of the Jesse Unruh Institute of Politics at USC.
Schnur said the defeat of Proposition 29 may be a "canary in a coal mine" for a critical part of Gov. Jerry Brown's plan to rescue California from a $16-billion budget deficit: a proposed November ballot measure to raise the state sales tax and income levies on the wealthy.
"Even if voters are willing to pay greater taxes, they don't really trust the government to spend it wisely," Schnur said of the results.
Jon Coupal of the Howard Jarvis Taxpayers Assn., which opposed Proposition 29, said that if Californians refused to vote for a tobacco tax when only an estimated 14% of state residents smoke, there's little chance they will approve the governor's sales tax.
"It doesn't bode well," Coupal said.
Miller said it made no sense to raise taxes for medical research at a time when the state teetered on financial ruin and was cutting school funding and the state Healthy Families program.
Former Democratic state Sen. Don Perata, who used unspent campaign money to help launch Proposition 29, called that a ruse. He said the tobacco industry would have opposed the measure even if all the money went to the state's general fund.
But he said that's not a bad alternative — and he's lobbying Sacramento lawmakers to approve a $1-per-pack cigarette tax to help bail out the state.
"The question is, will Republicans vote for it?" Perata said Friday. "There are some who might."
The Yes on 29 campaign was outspent almost five to one, but raised a respectable $12 million, with major financial support coming from the American Cancer Society, the American Heart Assn.and the Livestrong Foundation, founded by seven-time Tour de France champion and cancer survivor Lance Armstrong.
Perata said proponents knew from the start that besting the financial muscle of the tobacco industry would be difficult. State voters last approved a tobacco tax 14 years ago: a 50-cent-per-pack levy to fund childhood development programs.
"There's a reason we haven't raised tobacco taxes in California for so long," Perata said.