Decision looms for new cigarette taxes in California

A June 5th referendum in California will determine whether a one-dollar tax will be added to cigarette packs sold in the state. Right now, survey results suggest that voters support the measure by a slim margin: 50 percent of those polled were in favor, while 42 percent were opposed and 8 percent remained undecided.

ACSH's Dr. Elizabeth Whelan, for one, will be watching the voting outcome with interest. "Of course I'm in favor of any measure that could help prevent smoking," she says. "I d be concerned, however, that the equivalent tax on much-less-harmful smokeless products might yield unintended consequences." Regardless, Dr. Whelan notes that "this proposal may be in jeopardy not only because the people of California are currently in an anti-tax mood, but because voters have become justifiably skeptical about how the revenue from such anti-smoking taxes is ultimately used."

While the official plan is for a nine-member health expert committee to oversee the use of the tax revenue to fund prevention programs and medical research on tobacco-related illness, California residents may be dubious that the money will truly be used in this manner. The most notorious model of this re-channeling of ostensibly designated funds is the 1998 Tobacco Master Settlement Agreement, which arranged for seven tobacco companies to make billions of dollars of annual payments to 46 states. Although it was understood that the states would use the money for research on smoking prevention and treatment, few states actually devoted any significant portion of the fund to support such efforts.

Considering the current budget crisis in the state, one may well wonder about the fate of any additional tax income, adds ACSH s Dr. Ruth Kava.