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.
California is the latest entity — and the biggest — to raise the age for buying cigarettes and vaping products to 21 (There’s a misunderstanding here, it’s not against the law for 18-year-olds to smoke or vape … it’s against the law to sell products to people under 21 now.).
This is one area where I’m not 100 percent on board with the rest of the tobacco control community. There is a part of me that thinks when you’re 18, you can vote, join the military and go to prison for committing a crime; you’re considered mature enough to vote and do prison time, but not smoke? I’m still struggling with this, though virtually the entire rest of the tobacco control community is in favour of it. The American Heart Association, the American Cancer Society’s Cancer Action Network (the group’s advocacy affiliate), the American Lung Association and the president of the California Medical Association all came in favour of the California law.
Interestingly, I think lawmakers in California listened to some of these concerns. People in the military between 18 and 21 are exempted from the law (though I need to follow up later on a story that the military is cracking down on tobacco sales on its bases.).
California now joins Hawaii and New York City and a few other places that have raised the age for buying tobacco from 18 to 21.
Perhaps this will be effective in stopping kids from not only smoking but vaping. One reason I remain a bit skeptical about how effective this law will be is most kids don’t start smoking or vaping after they turn 18; most of the time they start when they’re 13 or 14 years old. Maybe it will be harder for their 18- and 19-year-old friends or siblings to buy their tobacco products for them. We’ll see. If the teen smoking and vaping rates go down in five years because of these laws, I’ll be more
“[These laws] will save countless lives, reduce astronomical costs to the health care system, and cost very little because it uses existing enforcement mechanisms,” said Senator Ed Hernandez, who authored the bill to raise the age of tobacco products. “Today was an enormous victory for not only this generation, but also for many generations to come who will not suffer the deadly impacts of tobacco.”
One thing I like is that the bills Gov. Jerry Brown signed also prohibit the use of e-cigs in public buildings, even in bars.
The e-cigarette is nothing more than a new delivery system for toxic and addictive nicotine,” State Sen. Mark Leno said Wednesday. “Ensuring that e-cigarettes fall under California’s comprehensive smoke-free laws is critical to protecting public health, especially given the alarming rate at which young people are picking up these devices.”
What I like most about the law is that it actually makes it a criminal offence — a misdemeanor, not a citation — to sell or buy cigarettes or vaping products for underaged users. Basically, the same as alcohol. That should put a dent in retailers selling vaping products to teens.
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.
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.
California is the latest state that is seriously considering raising the smoking age from 18 to 21. The California Senate passed a bill raising the smoking age (pretty easily with a vote of 26-8); now the bill goes to the State Assembly.
The Hawaii Legislature passed a similar bill earlier this year and New York City raised the smoking age to 21. Some other states like Alabama, Utah, Alaska and New Jersey have a smoking age of 19.
This is an issue where I’ve dragged my feet a bit personally getting behind. A whole bunch of tobacco control groups are fully behind raising the smoking age to 21, such as Campaign for Tobacco-Free Kids and the American Cancer Society.
However, where I am reluctant to completely jump onboard is the knowledge that very, very few kids start smoking between 18 and 21. Most kids start smoking when they are 15, 14, 13 or even younger. So, it’s already against the law to sell cigarettes to kids under 18 and yet kids are managing to get their hands quite easily on cigarettes. I question if raising the smoking age to 21 is likewise going to have a constructive and tangible effect.
The Washington Post did a pretty good story on this, suggesting that there is data supporting the argument that raising the legal smoking age does have an effect on teen smoking rates. I’m guessing a reason why — it’s not very hard to 15- and 16-year-old kids to find 18-year-old friends at school or older brothers or sisters to buy their cigarettes for them. Not too many 21-year-olds hang out with 15- or 14-year-old kids, so with a higher legal smoking age, it might be harder for kids to find someone to buy their cigarettes for them. That’s a total guess on my part, but it makes sense to me.
There is also the Libertarian argument, that kids over the age of 18 are old enough to vote and die for our country, but they’re not old enough to buy cigarettes? I actually get that argument and have a hard time refuting it. At the same time, the argument for not allowing 18-21-year-old kids to drink makes sense to me, however, that kids do not have the judgement or experience yet at 18, 19, etc., to know when they should and should not get behind the wheel of a car if they have been drinking.
This is an interesting tack. I have no idea if there is any political will behind this.
A California state legislator has submitted a bill that would ban chew at all baseball ballparks, including Major League ballparks (Dodger Stadium, Petco, Angels Stadium, AT&T Park and the Oakland Coliseum). The law would ban chew within ballparks by fans, coaches and players.
Now, baseball already bans chew by players at the Minor League level; I have no idea if that applies to fans, it’s probably a ballpark-by-ballpark thing. But, Major Leaguers are still allowed to chew.
The Campaign for Tobacco-Free Kids and other groups (and me) have been trying to get baseball to ban chew. The league has been reluctant to do this, I think mostly because the players’ union has to get behind it. The players’ union has said it is willing to negotiate the issue of chewing tobacco during the next contract talks, which I believe are in 2016.
Frankly, I have to believe most parks already ban fans from chewing because it’s gross and disgusting and who wants to clean that crap up? Again, it doesn’t affect NCAA or Minor League players because they’re already prohibited from chewing on the ballfield. It would be really interesting how the Padres, Dodgers, Angels, Giants and A’s would feel if this bill actually passed.
I think it might be a bit premature for such a bill until we see what happens with the MLB collective bargaining negotiations next year. I’m cautiously optimistic the union will agree to a ban on chew. But, I like that the bill is raising the issue and is putting extra pressure on baseball to deal with the problem.
Chew in baseball has become a hot topic in part because Hall of Famer Tony Gwynn died last year of salivary gland cancer and Curt Schilling recently underwent treatment for oral cancer. Both were longtime chewers. Babe Ruth also died of oral cancer.
A bill has been introduced into the California State Assembly to raise the smoking age from 18 to 21. The State of Washington is considering similar legislation.
Some states have a smoking age of 19 (Utah, Alaska, New Jersey and Alabama), but no one has raised it to 21 yet (I need to correct this on an earlier post). Some cities and counties have raised the age to 21, including New York City and the Island of Hawaii.
I’m on record as not being a huge fan of the idea. It just comes down to two issues for me:
1) 18-year-olds can vote, die for their country and are arrested as adults if they break the law. About the only thing they cannot do is buy alcohol, and there’s a reason — public safety. It’s hard enough to convinced some 25- and 30-year-olds that they’ve had too much to drink as they get behind the wheel of a car. It’s that much harder to convinced 18- and 19-year-olds who don’t have the experience with alcohol yet that they shouldn’t be driving.
2) The second reason is I’m all for laws and regulations that I think are going to combat tobacco. I’m all for smoking bans and raising cigarette taxes (within reason) and getting smoking out of PG movies because I think these approaches have worked and continue to work to cut down smoking. I question if raising the smoking age from 18-21 is effective in keeping young people from getting started with tobacco. Most kids start smoking at 14, 15 or 16, not after the age of 18. By then, most smokers have been smoking for a few years. If 15- and 15-year-olds can already easily get their hands on cigarettes, how hard will it be for 19- and 20-year-olds?
Anyway, while I might have some misgivings about it, there seems to be growing momentum for the idea. I’m not necessarily opposed to it, I just wonder how effective it would be to raise the smoking age, and I think I’d prefer resources going toward educating kids younger than 18 about why smoking is so bad than enforcing laws prohibiting legal adults from smoking.