SACRAMENTO, Calif. -- In what is being hailed as a victory for the tobacco industry as a whole and for tobacco retailers, Proposition 29, California's referendum to raise the tax on cigarettes by five cents per cigarette ($1 per pack, for a total of $1.87 per pack--a 115% increase) and an equivalent tax increase on other tobacco products to fund cancer research (click here to view the full text of the proposition), has been defeated.
According to Secretary of State Debra Bowen's California Presidential Primary Election website, with 100% of precincts reporting, 50.8% of voters voted against the ballot measure, while 49.2% voted in favor of the ballot measure (click here to view an interactive map breaking the vote down statewide and by county).
"With a majority of Californians who voted in the June 5 electing to vote 'no' on Proposition 29, retailers that sell tobacco products will avoid the negative ramifications that result from a large increase in the cigarette tax and the tax on other tobacco products," Thomas Briant, executive director of the National Association of Tobacco Outlets (NATO) told CSP Daily News and Tobacco E-News. "This means that retailers will not be faced with an increase in illegal bootlegging of cigarette and tobacco products that would otherwise materialize in a much higher tax environment or a surge in adults traveling to Nevada and Oregon to buy cigarettes and other tobacco products at much lower tax rates."
The nonpartisan California Legislative Analyst's Office estimated that if passed, the tax would raise $735 million per year, said an ABC News report. That amount would likely decrease in time, as more smokers are expected to quit the habit because of the cost increase.
The Los Angeles Times favored a "no" vote on the referendum: "Proposition 29 is well intentioned, but it just doesn't make sense for the state to get into the medical research business to the tune of half a billion dollars a year when it has so many other important unmet needs."
On the side favoring the tax increase, the referendum had high-profile support from people such as Lance Armstrong and Mike Bloomberg.
The vote was expected to be close, but recent polling had shown voters favoring the measure by a narrow majority. The results signaled a sizable decrease in support over the past several months. In March polling showed two-thirds of voters supporting the referendum.
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