Healthcare groups announced a deal Tuesday to unite two major tobacco taxes
into a single $2.27 billion initiative.
Hospital groups say they had already gathered enough signatures to place an
initiative on the June ballot that would have provided $906 million annually
to fix the state’s ailing emergency rooms, along with smaller amounts of
money for nursing education and other efforts. The programs would have been
funded with a $1.50 per pack tax on cigarettes.
The other tobacco tax initiative, the Tobacco Tax, Disease Prevention and
Children’s Health Insurance Act of 2006, was being pushed by children’s
advocacy groups. It would have used a separate $1.50 per pack tax to fund
health insurance, disease prevention and anti-smoking campaigns.
The new, unified measure will be called “Tobacco Tax of 2006.” Supporters
hope to qualify it in time for next November’s election–the same ballot the
children’s groups were aiming for.
The deal is at best a minor reprieve for cigarette companies and their
customers. In the unlikely event that both initiatives had passed and gone
into effect separately, they would have raised the price of a pack of
cigarettes by $3 a pack, raising an estimated $2.8 billion total. The
current initiative would add $2.60 a pack and raise $2.27 billion.
Health care advocates say they have been told that the big tobacco companies
will spend as much as $50 million to defeat the initiative in November.
Supporters from both the hospitals association and the medical research
community had been talking for weeks about the advantages of working
together.”I think it would be desirable for everyone involved if there was
one unified effort,” said Wendy Lazarus co-president of the Children’s
Partnership, a group that promotes health care coverage for low-income
children, before the deal was reached.
Jim Knox, legislative advocacy vice president of the American Cancer
Society, said the various groups reached a fairly easy compromise. Because
there was some overlap in the programs the different initiatives would have
funded, it was easy to eliminate some of the proposed spending. This was
followed by minor trimming of most of the programs, he said, leaving no one
out in the cold.
“In terms of the funding allocations, no one suffered,” Knox said.
Except, of course, potential smokers, who would end up paying some of the
highest cigarette taxes in the country–a whopping $3.47 a pack.
For instance, the fund to provide health insurance for low-income children
would get $405 million, down only slightly from the $435 million proposed in
the children’s healthcare initiative. Emergency room funding will go from
$906 million to $828 million, while nursing education would get $100 million
instead of $126 million.
The combined initiative could have a good chance of being successful among
voters, given recent attention to three of the main problems it would
address: failing emergency rooms, the nursing shortage, and uninsured
children. Knox said the campaign has poll numbers showing significant
support to the combined measure, but that supporters were not yet ready to
However, now that the tobacco initiatives are no longer a moving target,
opposition from cigarette makers and smoker’s rights groups is likely to
“We would view any increase of that magnitude as excessive,” said Bill
Phelps, a spokesman for Philip Morris USA.
Phelps said it was too early to say what Philip Morris or other tobacco
companies might do to oppose the initiative, given that its authors had yet
to file the official paperwork or begin gathering signatures. Phelps did say
that he believed the tax would not meet its intended revenue targets. The
current tax in California is 87 cents a pack, he said, in line with the
national average and only slightly more than the 80 cent tax in Nevada. With
a total price over $6 a pack, Phelps said, smokers would turn to Internet
vendors, Indian reservations and smugglers who transport cigarettes from