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Ventura County Star
December 14, 2005
By Timm Herdt
SACRAMENTO--Hospitals and healthcare advocacy
groups in California, which had been headed toward an intramural
fight over dueling tobacco-tax initiatives, on Tuesday united
behind a single, massive tax measure they hope to put before
voters in November.
The measure would seek a $2.60-per-pack tax
increase on cigarettes, which would raise the price of a pack
of cigarettes by about 65 percent and give California by far
the highest tobacco taxes in America. The increase alone is
higher than the current top state tax rate of $2.46 in Rhode
Island. Along Tobacco Road in North Carolina, the tax is just
a nickel a pack.
When added to the existing 87 cents per pack
in California, it would bring the state taxes on a single
pack of cigarettes to $3.47.
The only jurisdiction that comes close is
New York City, where the city and state each impose a $1.50
tax for a combined tax of $3 per pack.
Retail prices in California now average slightly
less than $4 per pack. For a pack-a-day smoker, the proposal
would amount to a $949 a year tax increase.
For the money, Californians would get an
estimated $2.27 billion in new revenue that would be divided
among a smorgasbord of health-related programs, including
$828 million a year for hospital emergency room services and
$405 million a year for an expansion of children's health
insurance programs that would ensure that every child in California
is insured.
Wendy Lazarus, head of the Children's Partnership,
said the initiative, planned for the November ballot, would
answer the question Gov. Arnold Schwarz-enegger posed last
year when he vetoed a bill to provide health insurance to
100 percent of California children: Where will the money come
from?
"With the revenue from this initiative,
we're going to get that," she said. "It is well
within our reach, finally, to insure all the kids in California."
Lazarus said the measure would have "a
double benefit" for children because research has shown
that the most effective way to keep teenagers from smoking
is to substantially increase the price of cigarettes.
"We're raising the tax high enough,
hopefully, to keep kids from smoking," she said.
Jim Knox, vice president of the state chapter
of the American Cancer Society, said research has shown that
for every 10 percent increase in cigarette prices, the youth
smoking rate declines by about 7 percent. If that guideline
were to hold true, the envisioned California increase could
be expected to yield more than a 30-percent drop in youth
smokers.
Although Ted Lempert, president of Children
Now, acknowledged that the proposed tax increase is ambitious,
he noted that the unified effort prevents the prospect of
two separate $1.50 per-pack increases going before voters
next year -- and that polling suggested both would likely
have passed.
The California Hospital Association reached
agreement with the other groups at the last minute, just in
time to prevent it from submitting the 1 million signatures
it had already gathered for a stand-alone initiative that
would have benefited only hospital emergency rooms.
That measure had been targeted for the June
ballot, and the signatures would have had to have been submitted
on Monday.
C. Duane Dauner, president of the hospital
group, said his organization had already spent $4 million
on its initiative effort but that the combined proposal makes
more sense for California.
The Hospital Association also was facing
embarrassing political opposition, as over the last several
weeks an alliance of health-advocacy groups, including the
Cancer Society and the Lung Association, had announced opposition
to the measure on the grounds that the revenues were too narrowly
targeted for the benefit of hospitals.
Paul Knepprath, vice president of the American
Lung Association of California, noted that the proposal includes
a provision to protect early childhood development programs
funded by existing tobacco taxes from losing money as a result
of the anticipated decline in cigarette sales.
The Board of Equalization each year would
determine how much revenue programs funded by Proposition
10, a 50-cent-per-pack tax approved by voters in 1998, would
have otherwise received. Money from the new tax would then
be used to backfill any losses to programs such as those administered
by county First 5 commissions.
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