Lost in all the hubbub over this election (and a reason why I waited a week and a half to post about it) was California voters approving a $2 a pack increase in their cigarette tax.
California will go from having one of the lowest cigarette taxes in the country at $0.87 a pack to $2.87 a pack. Big Tobacco spent tens of millions to defeat prior attempts at raising California’s cigarette tax (in fact, a 2012 measure failed literally 49.9 percent to 50.1 percent), but this time it failed.
According to Salon, Big Tobacco spent $71 million to defeat the California measure, which was approved with 63 percent of the vote. California has one of the lowest smoking rates in the country at about 10 percent, so why would Big Tobacco care? Because that’s 10 percent of 38 million people — basically about 3 million adults.
It’s estimated (and studies have backed this up) that raising the cigarette tax by $1 a pack cuts the smoking rate by about 10 percent. So a potential 20 percent cut in those 3 million smokers (that’s 600,000 smokers), each of them no longer spending roughly $1,000 a year on cigarettes? You can see why Big Tobacco cared.
The Salon article claims this measure will cost Big Tobacco $250 million a year in lost sales (at least, that’s roughly a loss of 250,000 smokers). A drop in the bucket for Big Tobacco, but enough to get their attention.
Big Tobacco was able to defeat similar measures in Colorado and North Dakota, where health agencies didn’t have that much to spend against the industry. In California, health agencies spent $36 million to offset the industry’s $71 million.
Big Tobacco killed similar tax proposals in Colorado ($1.75 a pack; 46 percent yes) and North Dakota (44 cents; 45 percent) by outspending proponents by a factor of six.
The lesson: You don’t have to spend as much as the tobacco industry, but you need enough money to get your message out.
As an aside, California also approved legalizing pot, as did Nevada, Maine and Massachusetts. The Salon article goes on at length about the danger of Big Tobacco moving into the pot industry, something I’ve written about extensively in the past and don’t need to rehash in this post.
The Los Angeles Times has come out in favour of Proposition 56, a November ballot initiative which would raise California’s cigarette tax by $2 a pack.
This is the third time California has tried a ballot measure raising its cigarette tax (The State Legislature is too yellow to do it themselves.). A more modest $1 a pack proposal in 2012 lost by less than 1/2 of 1 percent of the vote (It lost by less than 25,000 votes out of 5 million ballots cast) after Big Tobacco spent more than $40 million to defeat it.
Most of the money from this tax increase is specifically earmarked for Medi-Cal.
… tobacco taxes are really a brilliant and beautiful thing: They not only bring in revenue for government but also serve a social good in the process. On average, peer-reviewed studies have shown, a 10% increase in the total price of cigarettes will yield a 3% to 4% reduction in adult consumption — and a 7% reduction among young smokers.
While bringing down smoking rates, the tax also would bring in between $1 billion and $1.4 billion in its first full year — 2017-18 — after which, the revenue would decline slowly as the number of smokers shrinks. Some of the money would go to administration and enforcement of the tax itself; a sizable chunk would go to tobacco prevention and control programs; a portion would go toward research on cancer, heart and lung disease and other tobacco-related diseases. But the bulk of the funds would go to Medi-Cal, the state’s health insurance program for low-income residents — specifically, to pay healthcare providers more to treat Medi-Cal patients.
Many people are surprised to hear this, but California actually has one of the lowest cigarette taxes in the country — just 87 cents a pack. The national average for state taxes is about $1.65 a pack, so California is barely half the national average.
This proposal would jump California from the 37th highest cigarette excise tax in the country to ninth.
Increasing cigarette taxes has been shown time and again to be one of the most effective ways to cut the smoking rate. It gives people extra incentive to quit and kids extra incentive to not start to begin with. I mean, if someone is smoking just a pack a day of cigarettes, with this cigarette tax, quitting would save you $2.87 a day. That’s about $1,000 a year. That’s just one pack a day.
It’s interesting that Big Tobacco would spend so much in California trying to beat it, because California already has one of the lowest smoking rates in the country. But, if the measure cut the smoking rate by just 5 percent … that’s 5 percent coming from the biggest state in the country. That’s maybe 200,000 to 250,000 smokers, multiply that by maybe $1,000 a year they would no longer be spending on cigarettes (and this is for perpetuity) … you start seeing why Big Tobacco cares.
The tobacco industry is already trying to spread lies that the initiative would somehow take money away from schools. From the L.A. Times editorial:
The battle to pass Proposition 56 will be tough, as always, because of the power of the tobacco lobby, which already is making deceptive claims like this one: “Prop 56 cheats schools out of at least $600 million per year.” That’s baloney. Proposition 56 wouldn’t take a penny from schools; it would merely exempt the new tobacco tax revenue from the requirements of Proposition 98, the 1988 measure which guarantees public schools a large share of the state’s core revenues. Many initiatives include such an exemption.
Don’t believe the cynical, disingenuous opponents of this measure. Proposition 56 will save lives. The Times urges a yes vote.
Big Tobacco has already filed bullcrap litigation attempting to get a ballot measure removed from the November 2016 ballot that would raise the California cigarette tax by $2 a pack. And on top of that, the industry is planning to spend at least $17 million in order to defeat the measure.
Big Tobacco spent up to $40 million several years ago to defeat a $1 a pack cigarette tax increase. That measure was defeated in 2012 by an incredibly narrow margin — 50.2 percent to 49.8 percent. It lost by 24,000 votes out of 5.1 million votes cast.
Prop 56 would double that increase to $2.87 a pack. Right now, the state cigarette tax is only 87 cents a pack, which surprising to a lot of people, is one of the lowest state cigarette taxes in the U.S. Yup, tax-happy California is actually in the bottom third for cigarette taxes in the country. The $2.87 a pack tax would be one of the highest in the nation. New York has the highest at $4.35 a pack.
First, the industry filed a suit claiming that proponents of the measure have lied that the measure — Proposition 56 — would actually take money away from schools rather than provide a new big revenue stream for education (estimated to be $20 million a year). The industry is claiming that the title of the ballot measure contains inaccurate information and is therefore against the law.
A hearing was held last week, not much must have happened because I can’t find any news stories about the result of the hearing. According to a letter written to the court by Tom Torlakson, head of Public Instruction for California, the tobacco industry states that “make no mistake, Proposition 56 will not take a dime away from education.” Torlakson calls Big Tobacco’s claims “false and misleading,” “preposterous” and “insulting.”
This LeftofCenter story, not particularly well-written honestly, talks about the measure’s effect on e-cigarettes and how this is one of the reasons Big Tobacco is opposed to it. This is an important point. Prop 56 would not only raise the tax on cigarettes, it would add a tax to vaping products, too. On the Crooks & Liars article about it, some commenters mistakenly state that Big Tobacco is threatened by or competing against the vaping industry. Not really, not as much as a lot of people think. The article is correct that this would hurt Big Tobacco by taxing vaping products. Big Tobacco actually controls 75 percent of the vaping industry. The top three vaping brands on the market are actually owned by RJ Reynolds, British-American Tobacco and Philip Morris. So, yeah, this tax is hitting Big Tobacco in two directions.
Big bucks to fight the tax measure
While this lawsuit apparently didn’t accomplish anything, Big Tobacco has put together a war chest of $17 million to advertise against Prop 56.
From Capitol Public Radio:
Proponents such as Jim Knox of the American Cancer Society’s Cancer Action Network say they’re preparing for an onslaught of opposition.
“This is classic tobacco industry strategy and deception,” Knox said of the cash infusion. “They will spend tens of millions of dollars to confuse and deceive the voters about the deadly nature of their product, as they have been doing for decades.”
Expect the industry to hide behind a bunch of Libertarian anti-tax “choice” bullshit in its advertising. That’s Big Tobacco’s MO.
From the story:
Beth Miller, a spokeswoman for No on Prop 56, says her campaign wants to educate voters about the problems it sees with the cigarette tax. She said it sidesteps requirements that money from new taxes fund schools.
“The proponents claim the tax increase will help people quit smoking. But it really is a tax hike grab by the insurance companies and other wealthy special interests,” Miller said.
The good news is Prop 56 backers have raised $16.6 million themselves to promote the measure.
Polls show roughly two-thirds support for the proposed tax increase. However, the 2012 measure also had strong public support until the tobacco industry spent millions to defeat it.
Prop 56 and marijuana measure
expected to raise $2 billion
One of the arguments in favour of the proposed tax is that it along with a measure to legalize marijuana, would raise $2 billion annually for the state of California.
Currently, California brings in $800 million in tobacco taxes. A state agency has estimated that Prop 56 would generate another $1 billion to $1.4 billion a year for state coffers. While the tax would triple, the revenue would roughly double. That makes sense, because such a huge tax increase would likely drive down the smoking rate.
Additionally, the state is estimating another roughly $1 billion a year in tax revenue from legalizing marijuana. That’s based on revenue increases seen in Colorado and Washington from their marijuana measures (I suspect pot hasn’t been legal in Oregon long enough to get a lot of revenue information).
Good news, bad news on the cigarette tax front. First the good news:
Proponents of raising California’s cigarette tax from 87 cents a pack to $2.87 a pack say they have nearly twice as many signatures as needed to qualify the measure for the November 2016 ballot. They were required to get 545,000 signatures and say they have gathered nearly 1 million.
You might be surprised to know California actually has one of the lowest cigarette taxes in the nation. California has the 36th-highest cigarette tax in the nation and the average state cigarette tax of $1.60 a pack is nearly double California’s tax.
This is partly because even though California has one of the lowest smoking rates in the nation at about 13 percent (I believe Utah is the only state lower), the state represents about 11 percent of the population of the country, so even with a low smoking rate, California represents a huge chunk of the national tobacco market. Big Tobacco spent tens of millions fighting a cigarette tax ballot measures in 2006 and 2012 (a whopping $66 million in 2006 and at least $40 million in 2012). The industry ended up winning in 2012 by the narrowest of margins (literally 50.1 percent to 49.9 percent). Expect Altria and RJ Reynolds to again pour millions into California trying to defeat this measure. If I remember right, that proposed cigarette tax increase in 2012 was only $1 a pack, not two.
And Big Tobacco will fight it, because study after study has shown that an increase in cigarette taxes has a tangible effect of driving down the smoking rate. It simply gives people more motivation to quit and prices a lot of teens out of the cigarette market. California is roughly 10 percent of the cigarette market in the U.S. This freaks out the tobacco industry.
However, California has an ace up its sleeve this time. In addition to public health groups such as the American Heart Association, the American Lung Association and the American Cancer Society, the effort to raise the cigarette tax has some deep pockets of its own to combat Big Tobacco’s spending. Billionaire philanthropist Tom Steyer is helping to bankroll the cigarette tax measure this time around. He’s already chipped in $1 million to fund the petition drive. Several other major groups are spending millions to back the measure.
If the measure passes, it would raise roughly $1 billion a year. That money is specifically earmarked in the ballot measure for MediCal and programs to reduce smoking. Latest polls show 67 percent support for the proposal, but there was a similar level of support in 2012 before the Big Tobacco anti-tax media blitz.
Bad news in Missouri, where a state judge invalidated a ballot measure that would raise Missouri’s dead-last-in-the-nation cigarette tax of 17 cents a pack. The judge ruled that financial estimates of the ballot measure were “insufficient” and “unfair.”
This measure is extremely modest compared to California. Tax increase proponents are proposed a tax increase of only 60 cents a pack — to be phased in over three years — leaving Missouri with a cigarette tax of 77 cents a pack, which would still be one of the lowest in the nation.
From a KSL.com story:
The financial summary prepared by Auditor Nicole Galloway’s office estimates the measure would generate between $263 million and $374 million annually. That largely would go to early childhood education; smaller portions would go to early childhood health programs and anti-smoking programs for youth and pregnant women. The financial summary said the impact to local governments was unknown.
Green struck down the financial summary for two reasons: The estimate on state revenues failed to account for the fact that people may buy fewer cigarettes as the price rises, resulting in an “unreasonably high” revenue projection, and the summary should have noted the potential costs to local governments due to a possible decline in cigarette sales.
The financial summary appeared on the petitions people signed and also would appear on the ballot.
“I collected signatures myself. Nobody really ever asked about that” financial estimate, said Linda Rallo, executive director of Raise Your Hand for Kids. “They are more interested in seeing that we don’t adequately invest in early childhood education. … A lot of folks, too, think our cigarette tax is too low and would like to see that raised.”
An appeal of the decision is planned. A competing measure is being backed by the Missouri Petroleum Marketers & Convenience Store Association. This would only raise the cigarette tax by 23 cents a pack — again gradually — and would raise about $100 million annually.
Missouri is one of the most tobacco-friendly states in the country. In addition to its ridiculously low cigarette tax, Missouri has no statewide smoking ban. It also, not coincidentally, has one of the highest smoking rates in the nation at 20.6 percent (compared to a national rate below 17 percent). Missouri also has the third-highest rate of lung cancer in the country.
The West Virginia State Senate last week approved by a 17-16 vote to increase its cigarette tax by 45 cents a pack. Get this, most of the Republicans voted for the tax increase, while most of the Democrats voted against it. Why? Because the tax increase wasn’t big enough.
Like Missouri, West Virginia has a very low cigarette tax at only 55 cents a pack. Republicans are proposing making it an even $1 to help make up a $270 million budget deficit. The measure would raise an estimated $78 million a year. West Virginia may have to shut down its state government in July if a budget cannot be passed.
Democrats want to raise the tax by $1 a pack to $1.45, which would raise $115 million a year.
The proposed tax increase goes to the State House, where it faces a tough fight from a coalition of Republicans who oppose any tax increase and Democrats who want to see a bigger increase.
West Virginia has the highest smoking rate in the nation at 26.7 percent. Because of the high smoking rate and the coal industry, West Virginia also has the second-highest rate of lung cancer in the country.
From purely an SEO standpoint, I know I’m supposed to break out these stories into separate posts, but that’s too much of a pain in the ass, so I’m compiling some legislative updates into one post because I’m feeling lazy.
First off, a major cigarettes tax increase in Louisiana.
Louisiana raises cigarette taxes
Louisiana Governor John Bel Edwards just signed a bill raising Louisiana’s cigarette tax a tiny bit from 88 cents a pack to $1.08 a pack. That still leaves Louisiana with one of the lowest cigarette taxes in the U.S. This was done partly out of pure, sheer, unadultered desperation after 8 years of Republican Bobby Jindal’s fiscal mismanagement left the state of Louisiana utterly broke. I hate to bring politics onto the lounge, but Jesus, between Schwarzenegger, Brownbeck, Scott Walker and Jindal, have voters not figured out that Republicans simply cannot govern responsibly? Poor Louisiana, which has never gotten over the fiscal impact of Hurricane Katrina, is painfully broke and looking at all kinds of tax increases just to keep basic state services running.
I don’t get it, why do people keep voting for Republicans when they’ve shown time and again they simply … cannot … govern … or manage a budget responsibly, particularly at the state level. Again, I try to keep partisan politics out of the Lounge, but I honestly don’t get this.
This tax is expected to add $230 million to state coffers over the next five years, which will help a little.
The average cigarette tax in the U.S. is about $1.60 a pack, so Louisiana is still well below the national average.
Wales to ban e-cig use indoors
More and more places are banning e-cigarette use indoors, including Wales, which is set to pass a law banning them inside.
I didn’t mind e-cigs indoors for a long time. Their vapour doesn’t smell nor until I started reading all the stories about the @#$%ing formaldehyde and diactyl in e-cigarette vapour and now I don’t care if it isn’t annoying or irritating, I don’t want to ingest it in any way, shape or form. Not until MORE IS KNOWN about just how dangerous that vapour might be. Now, whenever I’m near someone using an e-cig indoors, I find myself holding my breath or leaning away from them. What it comes down to is … I … simply … do … not … trust … that … vapour. No offence.
(Welsh Health Minister Mark Drakeford) has not dismissed claims that e-cigarettes may help people quit smoking.
He added: “The Bill does not prevent the use of e-cigarettes to help people stop smoking if they believe they will help them. Wherever you can smoke a cigarette you will be able to use an e-cigarette.”
Vermont to ban e-cig use indoors
Vermont is set to pass a bill that would ban e-cig use indoors and would put restrictions on the sales of e-cig products to keep them out of the hands of minors … ARE YOU PAYING ATTENTION, FDA?
E-cigs would have to be kept out of sight in stores or kept in a locked container. They would also be banned in bars and restaurants. I haven’t kept track of how many states are banning them indoors, but this is a growing tide.
I have no idea if this bill is going to pass, but this in itself is a pretty amazing development.
West Virginia, a solidly red Republican state (Obama got less than 30 percent of the vote in 2012) and either the No. 1- or No. 2-ranked smoking state in the nation (in the last survey, West Virginia was No. 2 at a staggering 29.9 percent smoking rate, just a tick behind Kentucky.), passed a pretty significant cigarette tax increase in the State Senate.
West Virginia’s cigarette tax is one of the lowest in the nation at 55 cents a pack, no surprise in such a conservative state with such a high smoking rate. The average state cigarette tax in the nation is about $1.50 a pack.
A bill was introduced in the W.Va. Legislature to raise the cigarette tax to $1 a pack, a pretty modest increase that would leave W.Va. still well below the national average tax. However, that bill, proposed by the governor, was amended to raise the tax by $1 a pack to $1.55 a pack, right around the national average.
In a Republican-dominated State Senate, the bill passed by a margin of 26-6. Wow. Republicans favoured the bill 12-6, joining 14 Democrats in favour. That blows me away.
The tax increase would raise an estimated $115 million and would help West Virginia balance a severely strapped budget.
In my mind, more importantly, the tax increase would likely make a dent in West Virginia’s shockingly high smoking rate. Studies have shown that a $1 a pack cigarette tax effectively lowers the smoking rate by 10 percent. It actually does help encourage smokers to quit to hit them in the pocketbook.
Sen. Tom Takubo, R-Kanawha, a physician, noted that 10 times as many West Virginians die from tobacco-related illness as die from narcotics overdoses and said the existing 55-cent-a-pack tax is not enough to motivate smokers to quit.
“You have to hit somebody hard enough in the pocketbook that they say, ‘Now, I’ll quit,’ ” Takubo said.
While tobacco taxes are sometimes seen as inordinately burdensome on the poor, Takubo said smokers spend an average of $4,700 a year on cigarettes, money he suggested would greatly benefit low-income families.
“That’s a big number that can help out a lot of people — that’s cash,” he said.
Not coincidentally, West Virginia also has one of the highest lung cancer death rates in the nation, (also partly because of the state’s coal industry.).
The governor is apparently on board with the cigarette tax increase, but I have no idea if the tax increase will pass in West Virginia’s State Assembly. As I pointed out before, the state’s budget is extremely tight and they’d be pissing away $115 million a year in revenue rejecting the tax.
I can’t keep track in every single state, but I know cigarette tax bills are making their ways through legislatures in several states, including Indiana, Louisiana and California. California plans a state ballot measure to raise its ridiculously low 87 cents a pack cigarette pack. A similar bill in California barely failed a couple of years ago, literally by a few thousand votes, after Big Tobacco poured millions of dollars into defeating it.
You might not believe this, but cigarette taxes in California are among the lowest in the entire U.S.
California’s cigarette tax is only 87 cents a pack, which is barely half of the average $1.50 a pack state tax in the U.S. California has the 35th-highest state tobacco tax rate in the nation. A number of states have cigarettes taxes well over $2 a pack. California has a reputation for having high taxes, so what’s behind this?
What’s behind this is California also represents all by its lonesome, nearly 10 percent of the cigarette market in the entire U.S. So, anytime there is a proposal to raise cigarette taxes in the state, Big Tobacco fights it to the bloody death. The California State Assembly refuses to raise cigarette taxes, so a ballot measure was proposed to raise taxes in 2012 by a pretty reasonable $1 a pack. The measure failed, barely (50.2 percent against, 49.8 percent in favour). A bit weird, since California has one of the lowest smoking rates in the nation (less than 15 percent).
I was a bit shocked when the measure failed, since cigarette tax increases have passed by voter imitative in other, less-liberal states than California (including in Libertarian Montana, where voters approved a $1 a pack increase many years ago.) However, the measure was put on the ballot in a primary election, where turnout is not that good. And Big Tobacco spent millions to defeat it. According to this article, Big Tobacco spent $38.7 million to defeat the measure in 2012. Wow, that’s a lot of money … but keep in mind, California with its 38 million people is nearly 10 percent of the tobacco market in all of the U.S. And studies have shown that higher cigarette taxes help drive down the smoking rate.
So, now tobacco control proponents are back with a proposal for a $2 a pack tax increase. They’re gathering signatures and this time, they aren’t screwing around with a primary election date, they’re shooting for a general election date, when turnout is much higher. (Interestingly, there will also likely be a measure on the November 2016 ballot to legalize pot, which seriously should bring out a lot of younger voters … younger voters who don’t smoke cigarettes.)
This proposal would give California the ninth-highest cigarette tax in the nation. However, it will be on the November 2016 ballot, not a primary or special election ballot, so turnout is expected to be much heavier, which bodes well for passage. This article claims a poll shows 2-to-1 supprt for raising cigarette taxes.
Billionaire Tom Steyer is co-chair of the proposal. He says his mother smoked three packs a day and died of lung cancer. Also backing the measure are Tom Torlakson, the state superintendent of public instruction, the American Cancer Society, the American Heart Association, the American Lung Association and the California Medical Association.
The proposal would also add taxes to e-cigarette products. The proposal needs to gather more than 500,000 signatures to place it on the November 2016 ballot.
States hit hardest by the ravages of tobacco are often the least aggressive at hitting back, a USA TODAY analysis found. So a deadly culture of smoking lingers, which officials say is fueled relentlessly by tobacco companies targeting minorities and the poor.
• Big tobacco-growing states such as Kentucky, Tennessee and Georgia have the poorest and sickest residents, yet spend less than 20% of the federal government’s recommended minimum for tobacco education and enforcement.
• States with the most smokers weaken their own tobacco control efforts with cigarette taxes of 60 cents or less, compared with $3.75 in Rhode Island and $4.35 in New York.
• Hard-hit states also do the least to restrict smoking in places such as restaurants and workplaces and impose penalties of $100 or less on businesses selling tobacco to children, compared with $10,000 in the most aggressive states.
I like to show this phenomena graphically. Here is a map of the states with the highest rates of lung cancer. Darker is bad:
Now, here is a map of the states with the lowest cigarette taxes. Red means low taxes:
Now, here is a map with showing indoor smoking bans. White means total smoking bans, black means no statewide smoking bans (yellow means weak smoking bans).
Wow, it’s absolutely amazing the correlation, isn’t it? Actually, it really is, I’m not trying to be snarky.
Like I said, I’ve been aware of this correlation for some time, Now throw in the other factor of states in the Deep South spending little on tobacco education. Again, I’ve been aware of this for some time, the USA Today article speaks about how little states spend from the $280 billion Master Settlement Agreement on tobacco education, using that money instead to balance their state budgets (In USA Today’s word — “fix potholes.”).
Also, not a coincidence. Where is most of the tobacco in the U.S. grown? In the Deep South.
From USA Today:
Critics say one reason some states aren’t very aggressive is that tobacco is woven tightly into their communities even as the number of tobacco farms continues to shrink. “You can look at a map of tobacco control policies and see that every state that has weaker policies is a tobacco-growing state,” says Yvonne Hunt, who heads the tobacco control research branch of the National Cancer Institute.
Sitting in a cancer education booth at a free health clinic in southwest Virginia this summer, pharmacy student Anesa Hughes tried to explain why smoking is so common in her area. It’s “such a cultural thing,” says Hughes, who walked behind a tiller on her family’s tobacco farm starting at age 8. “It’s like we’re in a time warp.”
It’s a self-destructive culture. A mentality that “tobacco has always been a part of our culture.” Well, so has racism … does that somehow make it a good thing? These states have the highest smoking rates — Kentucky and West Virginia have been the highest for a while now, and places like Alabama and Mississippi aren’t far behind. People literally killing themselves and stubbornly clinging to the idea that somehow the right to kill themselves correlates to “Liberty,” or something… because their cigarette taxes are low and they can light up pretty much anywhere they want, especially outside the big cities. It’s a frustrating, exasperating reality. “Maybe I’m killing myself, but ain’t no Obama telling me what to do…” or some such thing.
As an aside, most of these Southern states also lead the U.S. in rates of diabetes. Part of that is smoking, it’s now known that smoking is a factor in causing diabetes, part of it is poor diet, obesity, lack of health care, high rates of poverty, etc. The sickest part of the country … which does little or nothing about it. And the people there keep voting for the people who do little or nothing about it.
I know this will surprise a lot of people, but California actually has one of the lowest state cigarette taxes in the U.S. Californians only pay 87 cents a pack on cigarettes, while the average state cigarette tax in the country is $1.60.
California legislators a couple of years ago chickened out and punted the issue of raising cigarette taxes to the voters and after Big Tobacco poured millions upon millions into fighting the ballot measure, The measure, Proposition 9, failed by a vote of 50.3 percent to 49.7 percent in 2012. That measure would have raised state cigarette taxes from 87 cents a pack to a still-very-reasonable $1.87 a pack.
The tax proposal is part of a special session being considered by Gov. Jerry Brown to raise funds for crumbling infrastructure and health care needs in California. A proposed raise in the state gas tax would go toward fixing roads and bridges in the state and a proposed cigarette tax increase (up to $2 a pack) is being considered to help with Medicaid and other health care costs
According to the San Jose Mercury News, cigarettes contribute $18 billion a year to health care costs in California. This information comes from UC-San Francisco, where my hero Stanton Glantz, a pioneering tobacco control scientist, is a professor.
It still blows my mind that California has one of the lowest cigarette taxes in the entire country — only a handful of states, mostly in the Deep South, are lower. In a few weeks, California in one fell swoop could become one of the most expensive states in the country to buy cigarettes.
Many states have raised cigarette taxes for the right reasons — because studies have shown that higher cigarette taxes result in a lower smoking rate.
Kansas is a total train wreck politically and financially. It’s been the source of a conservative experiment from Gov. Sam Brownback and a conservative state Legislature — that if taxes on corporations and the wealthy are drastically cut, then it will spur growth. Well, even though Reagan’s Trickle Down Economics was proven 25 years ago to have been a disaster, these guys in Kansas had to learn the hard way that this doesn’t help the state’s economy.
Instead, Kansas is desperately broke and is probably in the worst shape financially of any state in the country, taking a $800 million surplus two or three years ago and turning it into a $400 million deficit. Why? Gosh … NO REVENUES! So, they’re responding by cutting, cutting, cutting. Cutting school days, cutting services, etc.
But, you can only cut so much. Kansas Republicans finally bit the bullet and passed a couple of tax increases to address that $400 million deficit. But, instead of raising income taxes on the wealthy (who can most easily absorb a tax increase), they went after the poor with a pair of regressive taxes — a sales tax increase and an increase in the cigarette tax.
Look, I’m all for raising cigarette taxes to a reasonable amount, and Kansas’ cigarette tax was fairly low. The Legislature approved a bill raising the state cigarette tax from a pretty low 79 cents a pack to $1.29 a pack. (In my opinion, a good state tax for cigarettes is $1.50 to $2 a pack … more than that you start chasing people to Indian Reservations or the black market to buy their cigs).
So, I want to say “good job Kansas”, but I can’t. The state did the right thing … but for the wrong reason. A cigarette tax to cut smoking rates — great. A cigarette tax on the backs of the poor to try and balance a budget screwed up by your fiscal mismanagement — bad.
Look, I get one thing wrong with cigarette taxes is that they are a regressive tax. They are. The poor have a much higher smoking rate than the wealthy, so when you raise cigarette taxes, the bulk of that increase is paid by the people least able to afford it. However, my agenda is it also gives people the incentive to quit and discourages teens from buying cigarettes to begin with … and a number of studies bear this out.
Anyway, it just shows how screwed up the policies are in Kansas, attempting to balance the state budget on the backs of the poor, leaving the radical tax cuts for the wealthy and corporations in place and then cutting services and programs mostly used by the poor. It’s a messed-up state.