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Tobacco is often the target of politicians seeking money for state programs, with mixed success across the country. In California, voters have rejected multiple ballot box attempts over the years to raise taxes on cigarettes, and the state is among those with the lowest taxes on tobacco. The growing popularity of e-cigarettes and vapor products adds a new dynamic to the debate.
What would it do?
Prop. 56 would add a $2 tax to cigarettes, electronic cigarettes containing nicotine, and other tobacco products to primarily increase funding for existing health care programs.
What would it cost the government?
Nothing; this measure would add revenue to the state budget. It would provide an estimated $1billion to $1.4billion in 2017-18, with potentially lower revenues in future years.
Why is it on the ballot?
Prop. 56 is sponsored by a coalition of healthcare groups that could stand to see a boost in Medi-Cal funding if it passes. The measure is one of three on the November ballot that would increase Medi-Cal funding, which healthcare advocates say has yet to recover from cuts the Legislature made during the recession.
What supporters say:
Prop. 56 is a user fee paid only by smokers to help pay for healthcare, cancer treatment, smoking prevention, and research to cure cancer and tobacco-related diseases. Taxing tobacco saves lives with a proven reduction in youth smoking. California’s current tax on cigarettes—87 cents per pack—is low compared to most states.
What opponents say:
This measure is a tax grab by insurance companies, labor unions and hospitals, with just a fraction of the money set aside for smoking prevention. More pressing problems like the drought, education, road repairs and violent crime should benefit from any tax increases.
California Hospitals Association
The American Cancer Society Cancer Action Network
American Lung Association in California
Tom Steyer, major Democratic donor
Howard Jarvis Taxpayers Association
Philip Morris USA Inc.
R.J. Reynolds Tobacco Co.
Smoke-Free Alternatives Trade Association
Show me the money:
- Prop. 56 is shaping up as one of the most expensive ballot measures this November as the San Francisco Chronicle reports.
- At the heart of Prop. 56 is an ongoing struggle over how much the government reimburses health care professionals who treat Medi-Cal payments, the Sacramento Bee reports.
- Not all business groups oppose the tax hike in Prop. 56. Read this report by the Sacramento Business Journal.
- Democratic mega-donor Tom Steyer says he’s supporting Prop. 56 as part of a bigger mission to use his wealth to fight corporate dominance in politics.
- What would Prop. 56 mean for Californians who vape? Puffing onelectronic cigaretteswould get a lot more costly.