The Friends of Lung Cancer

Posted on 21 May 2012

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By Peter Schrag

There are lots of good reasons to support Proposition 29, the tobacco tax initiative on the June 5 ballot, not least those named Philip Morris and R.J. Reynolds. Together, the two tobacco giants have so far kicked in about $40 million to the sleazy campaign to defeat it. If you count the nearly $700,000 that the Republican Party contributed to their cause you have yet another reason.

They call themselves Californians Against Out-Of-Control Taxes and Spending but it’s probably easier to remember them as the Friends of Lung Cancer.

But because Proposition 29, another instance of ballot box budgeting, takes a revenue source off the table, and because the feds are already funding cancer research to the tune of some $5 billion annually, the issue is not all that simple.

Proposition 29 would increase the state cigarette tax from 87 cents a pack to $1.87. That would bring California from 33rd among the states in tobacco taxes– well below the national average – to 16th. Most of the additional money  – roughly $810 million in the first full year after it goes into effect, probably less if it succeeds in reducing tobacco use  – would go to cancer research and research on other tobacco-related diseases and smoking prevention.

All worthy goals. But given the state’s horrendous budget problems -- our underfunded schools and universities, our shredded social programs -- is this really the way we want to spend that money?

The measure’s biggest backers, as might be expected, are the American Cancer Society, the American Lung Association the American Heart Association and the Texas-based Lance Armstrong (Cancer) Foundation, plus a half million kicked in last week by New York Mayor Michael Bloomberg.  All told that comes to about $6 million to date, a tidy sum but peanuts next to what the tobacco industry is spending against it.

The star of the No on 29 campaign is a Sacramento-area family physician named La Donna Porter who appears wearing a white lab coat in TV and radio commercials declaring that the initiative creates "a huge new research bureaucracy with no accountability run by political appointees who can spend our tax dollars out of state."  That’s all predictable anti-tax boilerplate.

What’s interesting in all this is Porter’s role. She and her husband have vehemently denied that she’s getting paid by the industry. In statements to a reporter for the Bay Area News Group, they insisted that she is in fact a “volunteer”, which, in a multi-million dollar campaign like this must make her nearly unique.

In 2006, she appeared in another ad opposing an increase in the tobacco tax. In 2002, she supported the chemical industry in its opposition to a proposed EPA regulation of the water pollutant perchlorate. She’s twice filed for bankruptcy.

Hardly anyone still denies the damage and the costs – personal and public – inflicted by tobacco use. Tobacco taxes hit poor people, our heaviest smokers, especially hard.  But if Proposition 29 further reduces the consumption of cigarettes in California – already sharply down, from 130 packs per capita in 1970 to 26 in 2010 — there’ll be few complaints.

Yet if we’re going to increase tobacco taxes, which haven’t been raised since 2000, there are more urgent current needs for the money than cancer research and smoking prevention. Given the profile of the electorate and its common “don’t tax me” voting patterns, tobacco taxes are among the easiest taxes to increase. Why then pin it to this purpose?

Equally important, earmarking yet another revenue source to a specific objective, no matter how worthy, merely reinforces California’s long-standing autopilot spending pattern. If we’re ever going to break the state’s dysfunctional governing system that’s a habit we badly need to break.

We all know the familiar argument: voters don’t trust politicians, especially not the politicians they send to Sacramento. But the electorate can’t manage the budget at the ballot box – certainly not a budget as large and complex as ours is now. Direct democracy wasn’t designed for it.

The real problem, of course, lies in our crazy political structure – in the hyper-democracy of the initiative process, on the one hand, and the strait-jacket of super-majority voting requirements and the other impediments that ham-string representative democracy, on the other.

And under that lies a dysfunctional political culture that wants generous services at no cost, hamstrings government and then complains when it can’t address the state’s problems.  Each attempt to accommodate that dysfunctional system by earmarking yet another revenue stream for a specific purpose adds to the mess.

Proposition 29 is a tough call. Increasing the California tobacco tax is long overdue, and it ought to give us all great pleasure to do it. Anything that big tobacco is against – or big pharma or big oil – is usually good enough to be for. But let’s save it for a more worthy purpose next time around. There’s a long list of underfunded programs that can badly use the money.


Peter Schrag, whose exclusive weekly column appears every Monday in the California Progress Report, is the former editorial page editor and columnist of the Sacramento Bee. He is the author of Paradise Lost: California’s Experience, America’s Future and California: America’s High Stakes Experiment. His newest book, Not Fit for Our Society: Nativism, Eugenics, Immigration is now on sale. View his archived columns here.

I've personally known only two people with lung cancer. Neither of them smoked. If smoking "caused" lung cancer, we'd have 10 to 15% of the state's population dying at any given time. It can be a contributing factor, but it doesn't "cause" cancer.

Smoking may not "cause" lung cancer, but what's your point? That it's a splendid thing to do? There is no doubt any more -- none -- that smoking is a major contributing cause of lung cancer, plus a host of other preventable ailments. So your quibble is nonsensical.

good thing we have you and your personal experience to tell us what is and isn't true! thanks!! say, i'd like to know the weather...can you do me a favor and look out the window and tell me what you see?

Big Tobacco has spent $40,000,000 thus far to fight P29. It could have been donated to children's education and health care. Instead the tobacco syndicate earmarks it towards their lawyers and spin machines.

The tobacco industry is an ugly evil empire that deals in addiction, pain and death throughout the world - nothing else.

I support Lance Armstrong and strongly endorse P29.

Mr. Schrag:

Your comments on Prop 29 were thoughtful as always. But I believe that a closer examination of the unique nature of the tobacco tax and the reality of tobacco politics in California would have made it easier to get to yes.

The reality is that the California legislature will not pass a tobacco tax for the General Fund – or for any other purpose. In the past thirty years, there have been 33 legislative attempts to increase the tobacco tax. All but one was defeated. The lone exception was back in 1993 when a paltry 2 cents was approved to pay for breast cancer research and treatment. The last time the Legislature increased the tobacco tax for General Fund purposes? 1967. Why? The two thirds vote requirement coupled with immense influence that the tobacco industry continues to wield at the Capitol. A tobacco tax increase could reasonably provide about $1 billion relief for the deficit. The American Cancer Society co-sponsored a $1.50 tobacco tax increase in 2009 to do precisely that. And it died the same death all tobacco taxes do. Recently Senate President Pro Tem Darrell Steinberg publically acknowledged that the legislature will never pass a tobacco tax and that it is potential revenue that will otherwise go untapped. He supports Prop 29.

While a tobacco tax alone stands no chance in the Legislature, it is unlikely to ever be part of a revenue package, either. Any effort to include a tobacco tax in a larger revenue package simply brings on an extremely formidable opponent in the form of tobacco interests. No one wants to take them on. You might remember that a tobacco tax was included in the health care reform package sponsored by Gov. Schwarzenegger and Speaker Fabian Nunez. After that effort died, the Speaker cited the tobacco opposition as a critical factor in the demise of the effort. And it is certainly not a coincidence that a tobacco tax is not part of the package Gov. Brown is offering to the voters. No one in their right mind is going to add something to a ballot package that would elicit tens of millions of dollars of opposition.

So there is really no opportunity cost to Prop 29. This is potential revenue that is not going to get raised any way except through an initiative. In fact, and I know you are no fan of the imitative process, I would submit that this is the highest and best use of the initiative. Increasing the tobacco tax is in and of itself good, important and long overdue public policy that is not likely to ever get done except through the imitative process. Unless, perhaps, the 2/3 rds requirement for a legislative tax increase is repealed.

If Prop 29 were to fund the General Fund, there would have been cries from editorial boards and pundits that 1) it is not fair to burden smokers with funding education and other general fund expenses…general government costs should be paid for by everyone and 2) it is not a good idea to use a declining revenue source to fund ongoing programs.

But the even harsher reality is that a tobacco tax initiative to fund the General Fund would be an easy mark for the tobacco companies. Convincing voters to oppose a big tax increase to "give Sacramento politicians a big blank check to spend however they want" would cost tobacco companies only a small fraction of what they are spending to try to defeat Prop 29. No interest group cares enough about the General Fund alone and has resources it would need to take on the tobacco companies to fight that fight. Don’t bother unless you have close to $50 million.

No, the only way to increase tobacco tax is to go to the voters and for there to be a nexus to the product. It is altogether fitting that revenue from a tobacco tax should address the public health and economic carnage tobacco generates. Smoking is the single largest cause of preventable death in California taking the lives of more than 36,000 every year in the state. And it has an immense financial impact. According to the CDC, tobacco costs Californians more than $19 billion every year in medical costs and lost productivity. That is higher taxes and insurance premiums for all individuals and businesses. For example, MediCal spends more than $3 billion annually treating tobacco related diseases. We know that an increase in tobacco tax will drive down smoking and costs to the state. A study of the tobacco control aspects of Prop 99, which Prop 29 seeks to rejuvenate, indicated that the program has saved nearly a million lives and $86 billion in its 24 year history.

And finally, a few words on “ballot box budgeting.” Unlike high speed rail and stem cell, which the opponents like to misleadingly offer as comparisons, Prop 29 does not in any way obligate the General Fund. It is self-funded. Nor does it create any minimum level funding for any new programs. As revenues gradually decline – which they will over time, the amount of funding available for tobacco control and cancer research diminishes accordingly. The two previous tobacco tax initiatives (Prop 99 and Prop 10) have never obligated the General Fund and Prop 29 won’t either. (Although there have been unsuccessful efforts the other way around - when a governor or legislators have tried to raid these funds).

Prop 29 does not even take tobacco tax “off the table.” A $1 increase is relatively modest and puts California nowhere near the top among states. Since the tax was last raised in California 14 years ago, 47 other states have collectively raised their tobacco taxes more than 120 times. Some have done it three years in a row. In the very unlikely event that the Legislature ever decides to seek a tobacco tax increase, there remains sufficient room to do so. Fifteen states have taxes over $2. Five have taxes over $3. New York’s is $4.35.

Forty five years of failure on the part of the Legislature to raise the tobacco tax for the General Fund provides compelling evidence that is not likely to happen any time soon. And defeating Prop 29 gets us no closer. If anything, it makes that prospect even more remote as it would provide recalcitrant legislators cover not to go against the "will of the voters."

Jim Knox
Vice President, Legislative Advocacy
American Cancer Society, California Division