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Think of the tobacco tax as user fee

Prop. 29 on the June ballot would raise cigarette taxes and generate money for research on cancer and related illnesses.

May 07, 2012|George Skelton | Capitol Journal
  • California's cigarette tax is far below the national average of $1.46, according to the Campaign for Tobacco-Free Kids. The state ranks 33rd.
California's cigarette tax is far below the national average of $1.46,… (Robert Lachman / Los Angeles…)

SACRAMENTO — Let's begin with the basics: Tobacco companies are inherently evil.

They peddle poison that causes cancer and addicts people to their killer products.

Second, smoking is nuts. Smokers know that. Spare the lectures. Can't stop, they say.

Nonsense. Millions have. They'll stop eventually when the nurse thrusts the ventilator tube down their throat.

I've been blessed. Never smoked. But for much of my generation, lighting up was a rite of passage. Cool. And tragic. Too many have died prematurely.

All that said, Proposition 29 is not an easy call — at least at first blush.

The initiative on the June 5 state ballot would tax tobacco to fund research on cancer and other tobacco-related ailments, such as emphysema and heart disease.

The state cigarette tax would be raised $1 per pack, from 87 cents to $1.87. The feds tack on an additional $1 tax. The current average retail price for a pack in California is $5-plus, the legislative analyst reports.

Our state cigarette tax is far below the national average of $1.46, according to the Campaign for Tobacco-Free Kids. We rank 33rd.

Prop. 29 would generate roughly $800 million annually, the legislative analyst figures. Of that, $735 million would come from the cigarette tax and fund the new research.

Comparable tax hikes on other tobacco products would bring in $50 million. It would mainly be spent on existing health and smoking prevention programs, replacing revenue sure to decline when smokers begin quitting rather than pay the stiffer prices. Up to $20 million also would be gained from a higher sales tax take.

I'd prefer that any new tax money be poured into the state's deficit-ridden General Fund, especially to shore up healthcare for the poor. California's safety net has been ripped and needs mending. Schools and universities also need help.

But polling indicates my preference is a political loser. Voters don't trust Sacramento politicians to spend General Fund money wisely. They'll only vote to raise taxes — even someone else's — if they're guaranteed the dollars will be used for a cause they deem worthy.

And forget about Republicans ever providing the necessary two-thirds majority vote to pass a tax hike of any kind in the Legislature. Not even all Democrats can be counted on to boost tobacco taxes.

"I tried to raise cigarette taxes I don't know how many times," says former state Senate leader Don Perata, the Oakland Democrat who initiated Prop. 29. "The tobacco guys always had a couple of Democrats in their pockets.

"I'm no shrinking violet. If I couldn't get Democrats to vote for a cigarette tax, you really can't get it through."

So Perata and the American Cancer Society, among others, are going directly to the voters with a proposal to raise cigarette taxes that the Legislature and governor can't touch. The money would bypass the General Fund and go straight into a special research kitty.

Critics argue this spreads the plague of ballot-box budgeting — voter decisions that tie the Legislature's hands on taxes and spending. But Prop. 29 generates revenue that otherwise wouldn't exist to spend. It's not exactly tying legislators' hands if they refuse to hike the tax when their hands are free.

I've always had a different problem with the cigarette tax. It's basically cowardly, hitting smokers who are disproportionately poor and powerless.

Perata's answer: "These bastard tobacco companies just prey on poor people and the young. 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."

But Prop. 29 isn't about tobacco companies, opponents tell us. It's about the state creating "another costly new bureaucracy"—"another new spending program."

Two things about that:

First, both the bureaucracy and the program — an administrative commission and the cancer research — would be fully funded by the increased tobacco tax. There'd be no competition for money with schools or anything else.

The entire cost would be borne by the beneficiaries, the smokers most likely to contract cancer. Call it a user's fee.

And this contrasts sharply with other voter-approved state programs such as high-speed rail and stem-cell research. Neither of those ventures has a dedicated revenue stream. They're financed by bond debt paid off by the General Fund.

Second, the tobacco companies must think the ballot measure is about them. Otherwise they wouldn't be spending tens of millions to defeat it — $24 million so far, undoubtedly climbing to at least double that by election day.

Tobacco probably will outspend the Prop. 29 backers — cancer, lung and medical groups, including cyclist Lance Armstrong's foundation — by at least 10 to 1.

Tobacco companies realize, of course, that if Prop. 29 passes their profits will suffer.

"Every 10% increase in the cigarette price results in a 4% decrease in adult usage and 7% decrease in youth consumption," says James K. Knox, California lobbyist for the American Cancer Society. "Our projections are that Prop. 29 would induce more than 100,000 adults to quit and prevent 220,000 kids from starting."

Today, 12% of California adults smoke, and about 14% of high schoolers do, according to the Campaign for Tobacco-Free Kids. The medical cost directly attributed to smoking is $9 billion.

On Prop. 29, my heart says yes. My head agrees.

The more cancer research the better. And who better to pay for it than smokers and their evil enablers, the conveyors of cancer.

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