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A $1 Cigarette Tax Starts a $47 Million Brawl in California

Cigarette Tax Starts
California has some of the toughest antismoking laws in the country — it is illegal, in some places, to smoke in your own apartment — and boasts the second-lowest per capita smoking rate in the 50 states. But for all the disdain toward smoking, it has been 14 years since California raised its cigarette tax, a tribute to the power of the tobacco industry here and the waning of this state’s antitobacco dominance.

That may be about to change. An array of health and anticancer groups has rallied behind a ballot initiative to impose a new $1-a-pack cigarette tax to finance cancer research. And that has provoked a $47 million storm of advertisements, overwhelmingly financed by the tobacco industry, which is outspending proponents by nearly four to one to defeat the biggest threat it has faced in California in more than a decade.

An independent poll conducted May 14 to 20 signaled the power of the assault: while a majority of voters in California, where the average price of cigarettes is $5.71 a pack, say they still support Proposition 29, as it is known, the percentage has dropped markedly since the campaign began, according to the poll by the Public Policy Institute of California.

In the recent poll, 53 percent said they would support the measure, down from 67 percent in March. The vote is Tuesday.

The latest frontier in the fight against smoking is a very unlikely place: a state that has long been identified with championing restrictions on smoking. The battle has drawn national attention — Mayor Michael R. Bloomberg of New York contributed $500,000 to the initiative, and Lance Armstrong, the bicycling champion and cancer survivor, has become its chief public advocate — reflecting the frustration of antismoking groups on their defeats here. The Legislature has voted down more than 30 attempts to raise cigarette taxes in 30 years.

“You think of California as a healthy, progressive state leading in tobacco cessation,” said Chris Lehman, one of the organizers behind the initiative. “It’s just not. And it’s not for lack of trying.”

California’s dominance as a leading antismoking state has declined significantly since it passed, in 1998, what was at the time the toughest antismoking bill in the country, according to the American Cancer Society. Since then, 23 states have passed tougher laws. The American Cancer Society has contributed more than $7 million to get Proposition 29 passed.

“California has been a leader, not only in the country but in the world, in efforts to curb smoking,” said John R. Seffrin, the chief executive of the society. “They are overdue.”

The tax, which would raise an estimated $735 million, is being voted on as California is reeling from a new wave of bad budget news. Gov. Jerry Brown announced last month that the state was facing a deficit of $16 billion, and he proposed a round of severe spending cuts to deal with it.

But none of the $735 million would go to close the deficit. Organizers argued that the tax would have less chance of passing if voters thought it would go into the state coffers, and said that their only goal here was cutting down on smoking. Raising the cost of tobacco has proved to be the most effective way of discouraging smoking, particularly among teenagers.

“The voters in this state are disinclined to give money — even tobacco money — to the Legislature to spend: they don’t trust them with the money,” said Don Perata, a Democrat and former president pro tem of the State Senate, who is the author of the proposition. “We’ve become such a damned antitax state that we’ve demonized any kind of tax.”

Still, the image of a $735 million windfall rushing in at a time when California is facing a three-week cut in the school year has proved, at the least, discordant. The editorial board of The Los Angeles Times, while proclaiming itself uncomfortable to be siding with the tobacco industry, urged voters to defeat it.

“It just doesn’t make sense for the state to get into the medical research business to the tune of half a billion dollars a year when it has so many other important unmet needs,” it said. And opponents have seized on this as one of their central arguments.

“Isn’t that a little strange?” said Michael C. Genest, a former director of finance for the state who worked as a consultant to the “No on 29” effort, noting that Mr. Brown had just announced the state’s latest budget shortfall. “It’s astonishing to me that someone would go to these lengths to have a major tax increase and none of it would go to the budget.”

At 87 cents, the cigarette tax here is about half the national average, and it ranks 33rd in the nation — down from the third highest in 1999. California is one of only three states that have not raised the cigarette tax over the past decade. About 12 percent of Californians now smoke.

Drawing on wealthy backers’ coffers, opponents of the proposition have hammered the proposal, warning that money raised would go out of state (which organizers call a complete fallacy) and would have no legislative oversight.

Cigarette taxes were last increased in California in 1998, in that case by 50 cents in a voter initiative. California was widely viewed as a leader in the antismoking effort, with, among other things, a punitive tax on cigarettes and a raft of laws banning cigarette smoking in restaurants, sidewalks, public places and, in some areas, apartment buildings. Efforts in Sacramento to raise the tax have repeatedly failed, attesting to the contributions of the tobacco industry as well as the requirement for a two-thirds vote on any tax increase. The ballot measure’s passage requires a simple majority from the voters.

Philip Morris USA and the R. J. Reynolds Tobacco Company are the leading contributors behind the effort to defeat Proposition 29. It has also drawn around $1 million from the California Republican Party.

In addition to the American Cancer Society and Mr. Bloomberg, the proposition is backed by the American Heart Association and the American Lung Association, among other groups.

Mr. Armstrong said he thought many people were “shocked by the amount of money that big tobacco is spending.” But he said he remained optimistic.

“This is our best opportunity, we think,” he said.

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