California Tobacco, E-Cig Tax Goes to Voters

Proposal would increase price by $2 per pack or equivalent for OTP, vaping

By 
Thomas A. Briant, NATO Executive Director

ballot box

SACRAMENTO, Calif. -- Last week, the California secretary of state certified that petitions filed by advocacy groups contained the required number of voter signatures to place on the November 2016 general election ballot a question about increasing the state cigarette tax by $2 per pack, with equivalent tax increases on other tobacco products and a new OTP tax on electronic cigarettes containing nicotine. 

If passed by voters, the additional revenues would be used primarily to increase funding for existing health-care programs, tobacco-use prevention/control programs, tobacco-related research and law enforcement, University of California physician training, dental prevention programs and administration. A financial analysis compiled by the office of the California legislative analyst and director of finance shows that these proposed tax increases could result in an increase in excise tax revenues in the range of $1.1 billion to $1.6 billion annually by 2017-2018, with revenues decreasing slightly in subsequent years.

This notice that the tax question was certified to be placed on the November ballot comes one month after California Gov. Jerry Brown signed into law an increase in the legal age to purchase tobacco products from 18 to 21. With the intent of the new ballot question to make it more expensive and, therefore, more difficult for underage youth to obtain tobacco, the new purchase age of 21 makes it less likely that minors will obtain tobacco products, nullifying to a significant extent the purpose of the proposed tax increase.

Ballot questions to raise the cigarette and tobacco taxes have been voted on by California residents numerous times since the late 1990s, with the outcome the same both times. The ballot questions were defeated due to “no” votes by a majority of the voters voting on Election Day.

According to news reports, an opposition campaign committee already has been formed to educate the public about the negative consequences of such a large tax increase. The campaign is called “Stop the Special Interest Tax Grab” initiative.

The general election will be Nov. 8.