Backers of tobacco tax set to try again in November

Among the dozen or so initiatives that could be on the November ballot is a new measure that would tax cigarettes by an additional $1 per pack. The idea is not a new one. Tobacco taxes have been routinely introduced by Democrats in recent years as a way to help close the state’s budget gap. But this measure is different. Instead of directing money into the state’s general fund, the initiative provides new funding for cancer research and research facilities.

The measure is backed by former Senate leader Don Perata, D-Oakland, who is now a candidate for Oakland mayor. Perata, who himself is a cancer surviver, said his recent  
Getting buy-in from other supporters was not always a sure thing. Other state programs, including First 5, are dependent on tobacco taxes for revenues, and increased taxes on cigarettes could reduce the sales of cigarettes. That is by design, and an argument proponents use in favor of the increased taxes. But they also threaten programs that rely on tobacco taxes for their survival.

Perata agreed to use part of the new tax revenues to protect funding for First 5, which was itself funded through a 1998 measure that levied a tax on cigarettes to pay for early childhood development programs. A report from the state’s legislative analyst  found the new taxes proposed in the Perata measure could reduce revenues to First 5 by as much as $45 million per year.

Although some of the hurdles have been cleared to appease what is known as the heart, lung and cancer community inside the Capitol, the measure still faces challenges at the ballot box. While California voters have sponsored new levies on tobacco products before, passing Proposition 99 in 1988 and Proposition 10 in 1998, recent efforts have been less successful.

In November 2006, California voters rejected a tobacco tax measure, Proposition 86. That measure would have imposed a $2.60 per pack increase on cigarettes and other tobacco products.

Advocates say this year’s proposal is less ambitious and less complicated than Proposition 86. Not only is the proposed tax hike smaller, but Proposition 86 divided the money up 26 different ways. This measure spends about three-fourths on cancer research and the remaining 25 percent on tobacco prevention and education.

Sen. Alex Padilla, D-Los Angeles, has a bill, SB 600, that would tax cigarettes by an additional $1.50 per pack. But unlike Perata’s initiative, the measure would raise money for the state’s general fund. Padilla proposal would direct 85 percent of the new tax into the state’s general fund. The remaining 15 percent would be placed into a new cancer research account.

Padilla’s measure stalled last year in the Senate Appropriations committee.

“There wasn’t sufficient support in the Legislature or the governor’s office for a tobacco tax increase,” said Jim Knox, vice-president of legislative advocacy for the American Cancer Society. “We’ve tried 28 times in the last 27 years to raise tobacco taxes through the Legislature, and were only successful once.”

Knox said they have abandoned hope of passing a tobacco tax in the Legislature this year and are focused on the initiative process.

Creating new research accounts via ballot initiative is nothing new. Most recently, the state passed a new general obligation bond to fund a new center to conduct stem-cell research.
But unlike the stem cell institute, the new cancer research entity proposed in this initiative would be subject to the state’s open records and public meeting laws.

Language in the initiative also appears geared to generating support from the public safety community. Three percent of the new tax revenue would go to a new law enforcement fund to “support law enforcement efforts to reduce cigarette smuggling, tobacco tax evasion and counterfeit tobacco products,” according to language in the initiative. That 3 percent could translate to more than $25 million per year.