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Sacramento Bee
December 14, 2005
By Clea Benson
Hospitals, children's advocates and anti-smoking
groups announced Tuesday that they will join forces to seek
voter approval for a new $2.60-a-pack tax on cigarettes, averting
a potential showdown between two separate measures that were
headed for the ballot next year.
If it qualifies for the November ballot and
passes, the new initiative would provide an estimated $2.27
billion annually for universal children's health insurance,
emergency-room care, smoking prevention, disease research,
and other health-related programs. It would raise the average
price of a pack of cigarettes, now selling for close to $4,
to more than $6.50.
Almost half of states have enacted tobacco
surcharges higher than California's, currently 87 cents per
pack of cigarettes. If the proposed increase were to go into
effect, California would have the nation's highest tobacco
tax, advocates said Tuesday.
Before Tuesday's announcement, the California
Hospital Association had collected enough voter signatures
to place a $1.50 tobacco tax on the June 2006 ballot, with
the proceeds largely to fund emergency rooms.
But the measure could have competed with
another $1.50 tobacco tax that other groups were hoping to
place on the November ballot to fund disease prevention and
insurance for children. Citing that and other concerns, the
California Medical Association, the California Nurses Association
and consumer advocates opposed the hospitals' measure.
On Tuesday, C. Duane Dauner, president of
the hospital association, said the schism had ended after
an intense, 11-day round of negotiations leading right up
to Monday, the deadline for submitting signatures to qualify
measures for the June ballot. The hospitals had already spent
about $4 million to collect signatures for their measure,
which they have dropped.
"The solution we've come up with is
far more important than the money we've already spent,"
Dauner said.
Darrell Steinberg, a lawyer and former Democratic
assemblyman from Sacramento, helped broker the deal.
"This is a huge opportunity to begin
to deal with our health-care funding crisis in California,
and do it in a way that brings together a coalition you don't
always see together," Steinberg said.
Linking the two efforts has advantages for
all of the groups. The organizations supporting children's
health insurance and disease prevention can take advantage
of the relatively deep pockets of the hospitals. And hospitals
can benefit from the popularity of anti-cancer and children's
health groups, rather than working at cross-purposes.
The groups are hoping their joint strength
will help them if they face opposition from the tobacco industry,
which historically has fought tax increases.
Bill Phelps, a spokesman for tobacco manufacturer
Philip Morris USA, said the company has not yet taken an
official position on the new measure. But Phelps said Philip
Morris is generally opposed to excessive taxation, and "we
would view this proposal as excessive."
Phelps said the new taxes could lead to increased
illegal smuggling and counterfeiting of cigarettes. And,
he said, "We think excessive excise taxes are unfair
to adult smokers."
Supporters of the proposed measure said they
would provide new funds for crime fighting.
And they said they fully expected that the
new tax would decrease tobacco sales, ultimately leading to
lower tax revenues. But that, they said, would accomplish
their goal.
"Consumption decrease is where we want
to go," said Paul Knepprath, vice president of the American
Lung Association of California.
The Legislative Analyst's Office has documented
that tobacco tax revenue is a diminishing resource as more
and more Californians kick the habit. State revenue from Proposition
99, the original 25-cent tobacco tax that passed in 1988,
dropped from $573 million in the 1989-90 fiscal year to an
estimated $309 million in 2005-06, according to a February
report from the analyst.
Meanwhile, it is not clear where two of the
groups that first opposed the hospital ballot initiatives
will stand.
The California Medical Association, the state's
membership organization for doctors, has not yet taken a position,
said spokesman Peter Warren.
"One of our goals was to get the health-care
constituencies who had proposals to come together and agree,"
Warren said. "We've accomplished that. Now we have to
take a careful look at what they've agreed upon, and hopefully
we can endorse that."
The California Nurses Association has taken
no position and dislikes the idea of a new tax that would
affect the poor, said spokesman Charles Idelson.
In addition to the hospital association,
groups supporting the new measure include the American Cancer
Society, the Children's Partnership, the American Lung Association
of California, the California chapter of the American College
of Emergency Physicians, the California Emergency Nurses Association
and the American Heart Association.
TAX PROPOSAL
Here's how the proposed new tobacco tax would affect the cost
of cigarettes and allocate funding for health programs.
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Current average cost of a pack of cigarettes in California:
about $3.95, including 87 cents in tax.
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Proposed additional tax: $2.60 per pack.
Here's where the new tax money would go every year:
- Hospital emergency care services: 36 percent
- Children's health insurance: 18 percent
- Cancer, heart and asthma prevention and control programs:
13 percent
- Tobacco control, education, enforcement: 8 percent
- Funding for Proposition 10 programs (early childhood
health care and education): 7 percent
- Medical research: 5 percent
- Nursing education: 4 percent
- Community clinics: 3 percent
- Emergency physicians: 3 percent
- Prostate cancer treatment: 1 percent
- Tobacco cessation services: 1 percent
- Physician education fund: less than 1 percent
- Administrative costs: less than 1 percent
Source: Coalition for a Healthy California,
California Hospital Association
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