Prop 29 Votes Still Being Tallied

Uncounted absentee ballots keeping cigarette tax hike possibility alive in California

SACRAMENTO, Calif. -- More than 300,000 uncounted ballots in a California tax referendum may dictate the future of Proposition 29, which seeks to more than double the taxes on a pack of cigarettes in the Golden State, according to a Bloomberg report.

On June 6, Secretary of State Debra Bowen's California Presidential Primary Election website showed that with 100% of precincts reporting, 50.8% of voters voted against the ballot measure, while 49.2% voted in favor of the ballot measure. It was initially behind by about 63,000 votes of 3.9 million cast June 5.

(See Related Content below for previous CSP Daily News coverage.)

But counting of absentee ballots has narrowed the margin to 17,571 as of Tuesday, with about 371,000 untallied, according to the Secretary of State's office.

Investors such as Bill Black at Invesco Ltd., whose company manages $20 billion in municipal debt, said that a higher tax may lower sales underpinning the payments that states receive from tobacco companies under a 1998 settlement of smoking-related litigation.

"If the measure succeeds, that would probably encourage other states to raise their taxes as well," Black told the news agency.

California's proposed $1-a-pack increase would boost the tax to $1.87, with the additional revenue slated for cancer research and anti-smoking programs.

A victory for the tax's proponents may inspire other states to follow suit, Jack Pitney, a political science professor at Claremont McKenna College in Claremont, Calif., told Bloomberg.

Voters in Missouri, with the lowest state cigarette tax in the U.S. at 17 cents a pack, go to the polls in November on a $1 increase. Illinois Governor Pat Quinn (D) signed a law June 14 that raised the levy there by $1 a pack, to $1.98.

Bill Phelps, a spokesperson for Altria Group, told the news agency that the company opposes "additional, targeted taxes on tobacco." Jane Seccombe, a spokesperson for Reynolds American, referred questions to Beth Miller, a hired spokesperson for the campaign to defeat the measure.

"We are cautiously optimistic that Prop. 29 will be defeated when all is said and done," Miller told Bloomberg.

Opponents of the tax led 50.2% to 49.8% as of 12:47 p.m. California time Tuesday, the latest tally available on the secretary of state's website, said the report.

Richard Larkin, director of credit analysis for Herbert J. Sims & Co. in Iselin, N.J., told the news agency that the measure could decrease smoking by 10% in the state and 2% nationally.

Rejection of the California measure might discourage anti-smoking advocates, Pitney added. California has the second-lowest proportion of smokers of any state, 12.8%, compared with 20.6% of adults nationwide, he said. "A failure in California would make it harder to pass such measures in other states," he said. "If the tobacco companies can beat it here, then they can beat it anywhere."