Smoke and mirrors: Tobacco tax fight comes down to money

In California, tobacco is big business: Nearly 12 percent of the adult population, or some 3.8 million individuals, are regular cigarette smokers. On average, they’ll each consume about 210 packs — more than 4,000 cigarettes – each year.

It’s no wonder, then, that the tobacco industry and other groups have spent nearly $47 million on a sophisticated campaign against Proposition 29, the proposal that would add a $1-per-pack tax if passed by the voters in Tuesday’s election. The industry and its allies have outspent the backers of the tax by about 4-to-1.

The issue for foes of Proposition 29 isn’t health, it’s money. And a recent Field Poll reported that those efforts are paying off.

Only 50 percent of likely voters currently support the measure, down from 67 percent only two months ago. The proposition still leads, but support is steadily dwindling and the final outcome is likely to be close. A bombardment of radio and television advertisements, along with direct-to-home mailers, are making a case that the proposal is poorly crafted and inappropriately diverts money out of the state of California.

That is the message from Philip Morris, R.J. Reynolds Tobacco, the Californian Republican Party and the other groups opposing Proposition 29. Is it true?

It all depends on who you’re asking and how much they have contributed toward Prop. 29’s passage or failure.

The American Cancer Society, American Lung Association and American Heart Association have collaboratively pooled their resources towards the passage of Prop. 29 as part of their effort to get their unified message to the public.

According to their website, californiansforacure.org, the answer to whether or not Prop 29 is an effective idea is clear — yes, it is.

They contend Prop. 29 will save the state $5.1 billion in long-term health costs from declines in smoking rates. It’s their position that it will prevent 100,000 people from dying prematurely from smoking-related causes. And, they say, it will prevent 228,000 children from become regular tobacco users as adults.

But the tobacco industry, led by Phillip Morris and R.J. Reynolds, said Prop 29 is a disastrous idea that will cripple the state via its unintended side effects.

Detractors of Prop 29 say that it will divert $300 million of state education funding each year while creating a new nine-member Commission lacking oversight and accountability. They claim that this Commission will be able to spend the new funds as they see fit, and have no obligation to help alleviate California’s multi-billion dollar budget woes along the way. 

The Legislative Analyst’s Office, which offers nonpartisan fiscal advice to the Legislature, doesn’t agree with the industry’s fiscal assessment.

The LAO concluded that the passage of Prop. 29 would result in increased state spending on smoking cessation programs, and a long-term decrease in the states spending on health care cost related to tobacco-related diseases. Those savings would come particularly from low-income and uninsured persons and public employees. Furthermore, California would also see an eventual decrease in the amount of overall smokers as the higher price-per-pack figure reduces overall consumption rates.

As for the fears that new tax money could be spent on out-of-state cancer research, the language in Section 2 of Proposition 29 appears to repudiate that assumption.

Specifically, the measure instructs that the funds be spent on “grants and loans for biomedical, epidemiological, behavioral, health services, and other research in California” and the “creation, staffing, and equipping of California research facilities.” But whether that interpretation of the propositions mandate is concrete or flexible is a question for debate among the partisans.

Recently, a leader of the Prop. 29 campaign, former Senate Leader Don Perata of Oakland, said at a public forum some of the monies could be spent on out-of-state research if the need arises.

“We didn’t put a limit on the cancer research going out of state because we do live in an era of globalism,” Perata said.

His comments were viewed by Prop. 29’s opponents as evidence that the measure is deeply flawed. Critics such as Joel Fox, president of the Small Business Action Committee, thinks voters should take Perata’s statement to heart and be careful not to trust lawmakers in Sacramento.

“We all support cancer research, but at a time when we have a $16 billion budget deficit and can’t even fund schools, the last thing this state needs is another unaccountable spending program,” says Fox, who also edits the Fox & Hounds blog.

Vanessa Marvin of the American Lung Association in California says voters should remember who is paying for the lion’s share of the anti-Prop. 29 ad blitz — tobacco companies. Marvin said support for Prop. 29 has slipped because of the massive spending on the negative campaign.

 “Voters should know that Big Tobacco is funding the opposition,” says Marvin. “Big Tobacco doesn’t want Proposition 29 to pass because they know it will hurt their profits. Voters should take a closer look at the opposition’s advertisement. You will see that the disclaimer shows that Big Tobacco is behind all of the opposition. So who would you trust?”