California Proposition 86, Cigarette Tax Increase Initiative (2006)

California Proposition 86
Election date November 7, 2006
Topic Tobacco and Taxes
Status d Defeated
Type Amendment & Statute	Origin Citizens

California Proposition 86 was on the ballot as a combined initiated constitutional amendment and state statute in California on November 7, 2006. It was defeated.

A "yes" vote supported increasing sales tax on cigarettes by $2.60 per pack and increasing the sales tax on other tobacco products.

A "no" vote opposed increasing sales tax on cigarettes by $2.60 per pack and increasing the sales tax on other tobacco products, thereby maintaining the existing tax rate of $0.87 per pack.

Election results

California Proposition 86
Result		Votes	Percentage
Yes		4,136,358	48.31%
No		4,425,689	51.69%

Results are officially certified.

Source

Measure design

Proposition 86 would have increased the tax on cigarettes by $2.60 per pack with revenues from the tax going to various services such as hospital care for children and anti-smoking campaigns.

Text of measure

Ballot title

The ballot title for Proposition 86 was as follows:

“

Tax on Cigarettes. Initiative Constitutional Amendment and Statute.

”

Ballot summary

The ballot summary for this measure was:

“

• Increase in new state tobacco excise tax revenues of about $2.1 billion annually by 2007–08, declining slightly annually thereafter. Those revenues would be spent for various health programs, children’s health coverage, and tobacco-related programs. • Unknown net state costs potentially exceeding $100 million annually after a few years due to provisions simplifying state health program enrollment rules and creating a new pilot program for children’s health coverage. • Unknown, but potentially significant, savings to the state Medi-Cal Program and counties from a shift of children from other health care coverage to the Healthy Families Program (HFP); potential state costs that could be significant in the long term for ongoing support of expanded HFP enrollment. • Unknown, but potentially significant, savings in state and local government public health care costs over time due to various factors, including an expected reduction in consumption of tobacco products.

”

Full Text

The full text of this measure is available here.

Constitutional changes

If Proposition 86 had been approved, it would have added a new Section 14 to Article XIII B of the California Constitution.

Fiscal impact

See also: Fiscal impact statement

The fiscal estimate provided by the California Legislative Analyst's Office said:

“

Increase in new state tobacco excise tax revenues of about $2.1 billion annually by 2007–08, declining slightly annually thereafter. Those revenues would be spent for various health programs, children’s health coverage, and tobacco-related programs. Unknown net state costs potentially exceeding $100 million annually after a few years due to provisions simplifying state health program enrollment rules and creating a new pilot program for children’s health coverage. Unknown, but potentially significant, savings to the state Medi-Cal Program and counties from a shift of children from other health care coverage to the Healthy Families Program (HFP); potential state costs that could be significant in the long term for ongoing support of expanded HFP enrollment. Unknown, but potentially significant, savings in state and local government public health care costs over time due to various factors, including an expected reduction in consumption of tobacco products.

”

Support

Website banner of the "Yes on 86" campaign

Supporters

• Mila Garcia, R.N., member, American Heart Association (Western States Affiliate)
• Willie Goffney, M.D., FACS, president, American Cancer Society (California Division 2006–07)
• Rick Donaldson, Ph.D., RCP, chair, American Lung Association of California

Official arguments

The official voter guide arguments in favor of Proposition 86 were signed by Carolyn Rhee, chair, American Cancer Society (California Division); P.K. Shah, M.D., president, American Heart Association (Western States Affiliate); and Timothy A. Morris, M.D., board member, American Lung Association of California:

“

Smoking Kills. Public health experts agree: Taxing tobacco will save lives. The Tobacco Control Section of the California Department of Health Services has issued an analysis of Proposition 86 titled 'Economic and Health Effects of a State Cigarette Excise Tax Increase in California.' The California Department of Health Services has determined that: Proposition 86 Will Save Lives: Prevent nearly 180,000 deaths due to smoking among California kids now under the age of 17. Prevent approximately 120,000 additional deaths due to smoking among current California adult smokers who quit smoking. Proposition 86 Will Reduce and Prevent Smoking: The tax increase alone would prevent more than 700,000 kids now under the age of 17 from becoming adult smokers. 120,000 high school students and 30,000 middle school students would either quit or not start smoking. More than half a million smokers in California would quit smoking. Californians would consume 312 million fewer packs of cigarettes each year. Proposition 86 Saves Money: Nearly $16.5 billion saved in healthcare costs. Increases state revenue by over $2.2 billion per year. [See the report for yourself at www.yesprop86.com.] That’s why Proposition 86 is supported by a broad coalition, including: American Cancer Society American Heart Association American Lung Association of California American Academy of Pediatrics/California Chapter The Children’s Partnership American College of Emergency Physicians, California Chapter California Emergency Nurses Association Association of California Nurse Leaders California Hospital Association League of United Latin American Citizens California Black Health Network Children Now California Primary Care Association Tobacco-Free Kids Action Fund Los Angeles Chamber of Commerce The initiative specifically raises the tax on a pack of cigarettes by $2.60 to help fund some of California’s critical healthcare needs, including emergency care services; health insurance for children; nursing education; tobacco use prevention programs; enforcement of tobacco-related laws; and research, prevention, and treatment of serious health problems, including cancers, heart diseases, stroke, asthma, and obesity. Proposition 86 includes tough financial safeguards, including annual detailed public reporting of the use of tax funds, independent audits, limits on administrative costs, and a strict prohibition against the Legislature raiding the trust funds for any other government program. This means the money will go exactly where voters intend. This measure will save lives. With smoking-related illnesses driving up our healthcare costs and overloading our healthcare system, Proposition 86 will help discourage smoking and ease some of the problems caused by preventable, smoking-related illnesses. SAVE LIVES. TAX TOBACCO. VOTE YES ON PROPOSITION 86.

”

Opposition

Opponents

• Monica Weisbrich, RN, an operating room nurse
• Jaime Rojas, president, California Hispanic Chambers of Commerce
• Malcolm Simpson, a public school teacher

Official arguments

The official voter guide arguments opposing Proposition 86 were signed by Larry McCarthy, president, California Taxpayers Association; James G. Knight, M.D., past president, San Diego County Medical Society; and Steven Remige, president, Association for Los Angeles Deputy Sheriffs:

“

VOTE 'NO' ON PROPOSITION 86—STOP THE $2.1 BILLION TAX HIKE! We all want to improve our healthcare system, but Proposition 86 is the wrong solution. Prop. 86 is an unfair tax increase supported by special interests who are amending our Constitution to benefit themselves. Prop. 86’s proponents say it’s about encouraging people not to smoke, but it isn’t. It’s really a money grab by huge hospital corporations who will reap hundreds of millions of taxpayer dollars each year! Less than 10% of the tax revenues go toward helping smokers quit or keeping kids from starting. The largest share—almost 40%—goes to hospitals, many of which are funding the campaign for the new tax. HMOs will pocket millions from Prop. 86. WHY ARE HUGE HOSPITAL CORPORATIONS SPENDING MILLIONS TO PASS PROP. 86? Hospitals wrote Prop. 86 to give themselves an exemption to antitrust laws, giving them legal protection to divvy up and limit many medical services, and then raise prices without worrying about competition. Prop. 86 puts no limits on what hospitals can bill taxpayers for emergency services for the uninsured. Why should hospitals be allowed to charge taxpayers several times what they charge insurance companies for the same treatment? PROP. 86: ANOTHER LOTTERY MESS Like the state lottery, it will be nearly impossible for voters to know how the new taxes will be spent. Prop. 86 lists program after state program that gets a cut of the estimated $2.1 billion in new tax revenue. PROP. 86: NO ACCOUNTABILITY TO TAXPAYERS Prop. 86 throws millions of dollars at new bureaucratic state programs without adequate legislative or governmental oversight. There are NO GUARANTEES how the money will actually be spent or assurances the money won’t be wasted. PROP. 86: INCREASES OUR DEFICIT Prop. 86 contains 38 pages of spending mandates. But experts agree that the amount of money raised by this tobacco tax will decline over time. Declining revenues and demands to fund Prop. 86’s programs will only worsen our deficit. Other important programs like education, transportation, and law enforcement might have to be cut, or taxes raised further. PROP. 86: INCREASES CRIME Law enforcement groups oppose Prop. 86 because it will increase crime and smuggling. Stolen and smuggled cigarettes are already a big source of money for gangs and organized crime. If Prop. 86 passes, a single truckload of stolen cigarettes could be worth over $2 million to criminals. PROP. 86: UNFAIR Prop. 86 taxes smokers to pay for programs that have nothing to do with smoking, like obesity programs. Less than 10% of the tax revenues go toward helping smokers quit or keeping kids from starting. PROP. 86: LOCKED INTO OUR CONSTITUTION Proposition 86 amends our Constitution and statutes. When problems and abuses are discovered, it will be nearly impossible for the Governor or the Legislature to fix them. The Constitution should not be changed for a special interest money-grab. Please join health professionals, law enforcement, taxpayers, and small businesses in voting NO on Proposition 86.

”

Path to the ballot

See also: California signature requirements

In California, the number of signatures required for an initiated constitutional amendment is equal to 8 percent of the votes cast at the preceding gubernatorial election. For initiated amendments filed in 2006, at least 598,105 valid signatures were required.

Masterson & Wright was the petition drive management company hired to collect these signatures. They were paid $2,558,146.67 for this service.

See also: California ballot initiative petition signature costs

See also

Suggest a link

• California 2006 ballot propositions
• 2006 ballot measures
• List of California ballot measures
• History of Initiative & Referendum in California

External links

Suggest a link

• Official California Voter Pamphlet information about Proposition 86
• Full text of Proposition 86
• Summary of donors to and against 86 from Cal-Access
• Donors for and against Proposition 86 from Follow The Money
• Official declaration of the November 7, 2006 results on ballot propositions