Cigarettes and Tobacco News

Aug 24, 2006 -- Californians will vote in a November statewide ballot initiative to impose the latest proposed tax on tobacco that would make the state one of the most expensive places to buy cigarettes.

Proposition 86, if passed by voters, would raise the price of a pack of cigarettes by $2.60 beginning in January, bringing the average price of a pack to almost $7.

Currently, the state's tobacco tax is 87 cents per pack. California last raised its tobacco tax in 1998 by 50 cents per pack. Even so, half the states in the U.S. currently still have higher taxes on cigarettes than California.

The American Cancer Society, the American Heart Association, and the State's major health and children advocacy groups provided funding and helped to launch the campaign.

"This tobacco tax will help prevent children from starting to smoke and provide services to help smokers quit," said Georjean Stoodt, of the American Cancer Society, California.

The new proposition would generate $2 billion tax revenue annually for healthcare services, according to a California Health Services Study.

It would also prevent more than 700,000 children under the age of 17 from becoming smokers in adulthood, and reduce the number of cigarettes consumed in California by more than 26 percent.

"This tobacco tax focuses on preventing illnesses rather than paying for the cost of treatment after a person gets sick," said Rick Donaldson from the American Lung Association of California.

Tobacco companies know that 90 percent of smokers start as teens and they aggressively direct their marketing campaigns at youth, according to the Tobacco Free Kids organization. A recent Kool cigarette marketing campaign featured rappers and dancers on cigarette packs in a hip-hop competition in major U.S. cities.

The companies against the proposition are R.J. Reynolds Tobacco Co. and Philip Morris USA Inc.

"R.J. Reynolds committed to spend $40 million to fight against California's Proposition 86," said in a statement Ted Lempert from Children Now, a children advocacy group.

On Aug. 17 in U.S. District Court in Washington, D.C., R.J. Reynolds and Philip Morris were found liable for a decades-long fraud on hiding the dangers of smoking. U.S. District Judge Gladys Kessler ruled that the group of tobacco companies had broken the law, and banned them from describing cigarettes in ways that convey health claims such as "low tar" and "light cigarettes."

"Cigarette smoking causes disease, suffering, and death. Despite internal recognition of this fact, defendants have publicly denied, distorted, and minimized the hazards of smoking for decades," she said in her 1,650-page opinion.

According to Carla Haas, working campaign spokesperson in Sacramento for "No on Proposition 86," from the $2 billion annual tax revenue, "… only 10 percent is earmarked as tobacco cessation and prevention programs."

Others against the tax include small business tobacco retailers and some law enforcement agencies that worry that the tax increase may result in criminal activity. Federal investigators say that smuggling cigarettes from lower-tax states to higher-tax ones is a big concern.

"Illegal trafficking in cigarettes can generate enormous profits and is a multibillion dollar a year enterprise. As cigarette taxes increase, so do the incentives for criminal organizations to smuggle cigarettes," reads a 2004 report from the U.S. General Accounting Office.

Charles Janigian, president of the California Association of Retail Tobacconists, says the increase would force small retailers out of business.

"This initiative is the doomsday scenario for California tobacco retailers and tobacco consumers alike," said Janigian in an e-mail response.

"The only beneficiaries to Proposition 86 will be the internet and mail-order companies, who will continue to ship cigarettes and other tobacco products into California under the radar and deprive the State of California of its legitimate rights to the excise taxes."

Since 2000, 42 states have raised cigarette taxes. The highest taxes on cigarettes now are in Rhode Island at $2.46 a pack and New Jersey at $2.40.