California lawmakers are considering a controversial new cigarette tax increase as a solution to bring in some much-needed state revenue. Check out the following article on the debate surrounding the issue courtesy of the LA Times.com.
For years tobacco companies have successfully fought off attempts by California lawmakers and health groups to increase the cigarette tax. But next month, as the state grapples with the worst financial crisis in recent history, that may change.
Lawmakers will consider a proposal to hike cigarette taxes by $1.50 per pack and raise $1.2 billion annually. During the last decade, cigarette makers have spent tens of millions of dollars to kill 14 straight attempts to make smokers pay more.
But with the state facing a staggering $21.3-billion deficit and due to run out of cash in July, the tobacco tax could have a better chance of passing the Legislature.
"Given the serious budget shortfall we face, this is the year to pass the tobacco tax," said Sen. Alex Padilla (D-Pacoima). "It is needed now more than ever."
Padilla wrote the current proposal with Senate leader Darrell Steinberg (D-Sacramento), but even with Steinberg's support, it faces an uphill battle. The tobacco industry sees California as a crucial market and a trendsetter for anti-tobacco ideas that can spread through the country, said Beverly May, regional director of Campaign for Tobacco Free Kids, a Washington anti-smoking group.
"The tobacco companies view California very much as a battleground state," she said. "California is a state that they look at as important to do everything they can to have influence in any way they can."
Frank Lester, a spokesman for Reynolds American Inc., said proposals to raise tobacco taxes in California have failed in part because the state's residents are compassionate and see the tax as unfair.
"When people realize who the burden falls on -- the tax tends to be one of the more regressive taxes, meaning it falls on people of lesser means and working families -- they tend to think twice about it," Lester said.
He also said California voters are "dubious" about how past tobacco taxes have been spent. He cited media reports about the use of Proposition 10 tobacco proceeds, approved by voters in 1998 for childhood development programs, to pay for political ads promoting another ballot measure.
Forty-five states have raised tobacco taxes during the last decade, but not California.
Despite California's health-conscious image and laws that ban smoking just about everywhere, including bars and beaches, the state's cigarette tax of 87 cents per pack is lower than such taxes in other states. In Rhode Island, where tobacco taxes are highest, the levy is $3.46 a pack.
