Ventura County Star

Lawmaker introduces $2 per-pack increase in cigarette taxes

August 26, 2015

By Timm Herdt

Hoping to avert a ballot initiative campaign next year, backers of a proposed $2 per-pack increase in California's cigarette tax rallied behind a bill introduced Wednesday that would enable lawmakers to approve the tax increase in their special session on health care.

The bill's introduction came on the same day the Field Poll released survey results indicating two-thirds of California voters support the proposal.

The bill, as well as the proposed ballot initiative, would dedicate the estimated $1.5 billion a year the tax increase would generate to Medi-Cal, which provides health care services to low-income families, and to smoking reduction programs.

Sen. Richard Pan, D-Sacramento, a pediatrician, said he introduced the bill "with one goal in mind — to save lives."

Pan noted California spends an estimated $18.1 billion each year to treat smoking-related illnesses and that 40,000 Californians die prematurely each year as a result of such illnesses.

He pointed to studies that have shown tobacco-tax increases invariably lead to a slight reduction in the overall smoking rate and a more pronounced reduction in smoking rates among teenagers.

"Tobacco companies know that if they don't catch people by the time they're 18 or in their early 20s, they won't start smoking," he said.

The state's 87-cent per pack tax on cigarettes has been unchanged since 1998, and California now ranks 38th among the states in that area. Pan noted that every bordering state has a higher tax on cigarettes, as does Texas. A $2 per pack increase would lift California's tax to the 8th highest in the nation.

Supporters know that legislative approval of a tax increase is unlikely, as it would require two-thirds majority support in both houses of the Legislature. That would mean at least a few Republican lawmakers would have to vote yes, but nearly all have pledged opposition to any tax increase.

It was noteworthy that Wednesday's news conference announcing the bill's introduction was attended by state Department of Health Care Services Director Jennifer Kent. She said in an interview that her presence indicated "deliberate interest" on the part of Gov. Jerry Brown's administration.

Brown called the special session primarily to deal with Medi-Cal funding, and said at the time he would consider tax increases for that purpose.

Doctors and other health care providers have long called for increases in rates paid to Medi-Cal providers, saying existing rates are so low that many providers cannot afford to treat Medi-Cal patients.

The coalition backing the proposed initiative, called "Save Lives California," includes the California Medical Association, California Dental Association, Blue Shield of California and Service Employees International Union. The SEIU has already committed $2 million to qualify an initiative for the ballot.

The tax increase bill will be considered in the special session alongside a package of six tobacco-regulation bills that have now been approved by committees in the Senate and Assembly. Those measures include bills that would define e-cigarettes as tobacco products and also raise the legal age to purchase tobacco products from 18 to 21.

Some legislative observers believe the tobacco-regulation measures could potentially be used as negotiating leverage with the tobacco industry, and at least some could be dropped in exchange for the industry removing its opposition to a tax increase.