California Measure to Hike Cigarette Taxes Passes

California voters have approved a ballot measure that increases taxes on cigarettes by $2 a pack and places new taxes on electronic cigarettes.

Proposition 56 passed by a margin of 62 percent to 38 percent Tuesday with more than 5 million votes counted.

The measure adds $2 to the current 87-cents-a-pack tax. It's the first increase in California tobacco taxes since 1998.

Much of the money will fund California's Medi-Cal, a state program that covers health care costs for the poor. The revenue would also fund anti-smoking campaigns and medical research.

California also joins only about a half-dozen states that tax e-cigarettes and vapor products.

Opponents, led by tobacco companies, raised more than $71 million to fight Proposition 56. Opponents said the money would benefit insurance companies and hospital corporations.

Proponents cheered the increase as a victory for public health.

The tobacco industry — one of the biggest spenders in a record year of initiative fundraising in the state — was criticized for misleading voters.

The Mercury News said opponents ran "a supremely sleazy advertising campaign designed to kill Proposition 56" by claiming it would take money from schools and give it to greedy insurance companies.

California's legislative analyst and the state's finance director say Proposition 56 could raise as much as $1.4 billion in state revenue by the 2017-2018 fiscal year.

No on 56 coalition spokeswoman Beth Miller said the vast majority of the $1.4 billion would go toward hospitals and health insurance providers contracting with the state for Medi-Cal.

The measure was backed by billionaire environmentalist Tom Steyer, medical groups and educators, and former New York City Mayor Michael Bloomberg, who also supported an attempt to raise tobacco taxes in 2012 that was narrowly defeated amid big spending by tobacco interests.

Proponents of the measure note that California and Hawaii recently increased the legal age to purchase tobacco or e-cigarettes to 21.

However, California ranks 37th in the country on per-pack taxes, according to Campaign for Tobacco-Free Kids, an advocacy group.

E-cigarettes heat liquid nicotine into a vapor, delivering the chemical that smokers crave without by-products generated from burning tobacco. Proponents say e-cigarettes are a potentially useful tool to help smokers _ a benefit that could be threatened if the products are taxed.

Copyright AP - Associated Press
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