Lines drawn in battle over cigarette tax

Backers of $2-per-pack hike confident they can snuff out Big Tobacco offensive

Three-and-a-half years after California voters rejected a $1per-pack increase in the state’s cigarette tax, Big Tobacco and health advocates are preparing to duke it out once again over a proposed $2-per-pack hike likely to appear on next November’s ballot.

But having been outspent almost 4-1 by tobacco companies to lose by just four-tenths of a percentage point — the nar-

rowest defeat of any statewide measure in California’s history — backers of the tax hike now believe they have the upper hand.

Even though a group of moderate Democrats, many of whom had accepted Big Tobacco’s money, helped snuff out a $2-per-pack tax in the Legislature this year, polls show the public favors the proposal by more than 2-1. A powerful union has already pumped $3 million into the campaign, and billionaire environmentalist Tom Steyer has kicked in another million.

And because the measure will appear on a presidential ballot rather than a primary ballot like last time, the bigger electorate will be more left-leaning.

Taxing e-cigs, too

With all of that, proponents believe they’re poised to put another nail in the coffin of Big Tobacco in the Golden State — not only by hiking taxes on regular cigarettes but also by imposing, for the first time, taxes on electronic cigarettes.

“Is it a last nail? Boy, we hope so,” said Laphonza Butler, California president of the Service Employees International Union. “We see it as an opportunity to do what’s right for California.”

Unlike 2012’s measure, which would have dedicated 75 percent of its revenue to cancer research, the measure proposed for next year would put 82 percent of its revenue toward the state’s often-struggling health care programs, including Medi-Cal. SEIU represents many public health care workers.

“There’s no reason that we should not try to reduce smoking rates and add revenue to long-term health costs — and do that by taxing one of the most expensive health habits that contribute to those costs,” Butler said.

Steyer, a former hedge fund mogul who has brought his fortune to bear on environmental politics, told this newspaper that his mother “was a multipack-a-day smoker who died of lung cancer” at age 78 in 2002.

“This is the No. 1 cause of preventable death in the state of California … more deaths than from traffic accidents, murder and illegal drugs combined,” he said. “This is as straightforward a need to stand up for our kids and protect them as anything I can think of.”

Opponents put up almost $47 million to defeat the 2012 measure, including $27.5 million from Altria, parent company of Philip Morris USA and other tobacco concerns and $11.2 million from R.J. Reynolds.

“We are reviewing the ballot initiative and considering our options,” Altria spokesman David Sutton said. “We are opposed to large, excessive cigarette tax increases like this one proposed in California.”

Altria’s website says such taxes are regressive, affecting poorer tobacco users more than richer ones; help create a black market for cigarettes; hurt legitimate businesses; and do little to help state budgets. R.J. Reynolds didn’t answer calls and emails seeking comment.

Though often seen as tough on smokers, California’s current 87-cent-perpack cigarette tax ranks it 35th among the states. And a Field Poll conducted last summer found voters back a $2-per-pack hike in the cigarette tax 67 percent to 30 percent.

But Field Poll Director Mark DiCamillo said that’s more of a “concept test,” surveyed long before the measure’s language is finalized and the campaign begins. “I expect it to be a closer election than what the first poll indicated.”

Generally, most measures that start out ahead in the polls are ultimately approved, and most that start out behind fail, he said. But DiCamillo noted that 2006’s Proposition 86 — which would’ve raised cigarette taxes by $2.60 per pack — started out leading by 31 percentage points yet failed by 3.4 points after tobacco companies waged a $67 million campaign against it.

California Attorney General Kamala Harris is expected to issue the new initiative’s official title and summary by Dec. 15. Then proponents will begin gathering the 365,880 voter signatures they need to qualify it for next November’s ballot.

‘Tell the truth’

The initiative also would direct the state Board of Equalization to set an “equivalent tax” on electronic cigarettes. Most e-cigs contain nicotine, which is derived from tobacco and is highly addictive, proponents claim, and many are being marketed in candy flavors that appeal to minors. Use among middle- and high-school students tripled from 2013 to 2014, according to the federal Centers for Disease Control and Prevention.

But Cynthia Cabrera, president of the SmokeFree Alternatives Trade Association, wrote to Harris this month to complain that the proposed initiative’s language “is misleading to voters by falsely implying that the harmful health effects of tobacco are similar to those of vapor products” when studies have shown that’s not true.

The 2012 measure failed because backers didn’t adequately confront the tobacco companies, preferring instead to emphasize the money for cancer research, said Stanton Glantz, director of UC San Francisco’s Center for Tobacco Control Research and Education.

“They learned a lot of lessons in the last campaign, and they’re likely not to make the same mistakes again,” he said.

Even if outspent again in 2016, he said, “you don’t have to match these guys dollar for dollar because it’s much easier to tell the truth than to sell a lie.”