California Proposition 86, Cigarette Taxes (2006)

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California Proposition 86 was on the November 7, 2006 ballot in California as an initiated constitutional amendment, where it was approved. The measure was designed to increase the tax on cigarettes with revenues from the tax going to various services such as hospital care for children and anti-smoking campaigns. It failed, with 51% of the electorate voting against it. The largest contributor to the cause was the "No on 86- Stop the $2 Billion Tax Hike" committee which raised $39,352,501. [1]

Objectives of the Proposal

The objectives of the proposal were to

  • Impose additional 13 cent tax on each cigarette distributed ($2.60 per pack), and indirectly increases tax on other tobacco products.
  • Provide funding to qualified hospitals for emergency services, nursing education and health insurance to eligible children.
  • Revenue also allocated to specified purposes including tobacco-use-prevention programs, enforcement of tobacco-related laws, and research, prevention, treatment of various conditions including cancers (breast, cervical, prostate, colorectal), heart disease, stroke, asthma and obesity.
  • Exempt recipient hospitals from antitrust laws in certain circumstances.
  • Revenue excluded from appropriation limits and minimum education funding (Proposition 98) calculations. [2]

Arguments for the initiative

  • Will prevent teen smoking
  • Will lower amount of cigarettes consumed each year
  • Will provide health insurance for children
  • Is endorsed by major anti-smoking groups

Main proponent: Carolyn Rhee Chair American Cancer Society, California Division

Arguments against the initiative

  • 40% of money goes to hospitals while less than 10% goes to anti smoking programs
  • Tax increase excessive and unfair
  • Will encourage smuggling of cigarettes, an already large source of income for gangs

Main opponents: Larry McCarthy; President California Taxpayers’ Association, James G Knight MD; Past President San Diego County Medical Society [3]

Campaign finance

Donors for the campaign for the measure:[4]

  • YES ON PROPOSITION 86: $16,357,128
  • TOBACCO FREE KIDS ACTION FUND (YES ON 86): $250,000
  • Total: $16,607,128

Donors for the campaign against the measure:

  • NO ON 86-STOP THE 2 BILLION TAX HIKE: $39,352,501
  • CALIFORNIANS AGAINST UNACCOUNTABLE TAXES: $27,177,258
  • CALIFORNIA ASSOCIATION OF LIBERTY AND CHOICE NO ON PROP 86: $123,140
  • CITIZENS FOR RESPONSIBLE ELECTIONS: $30,000
  • Total: $66,682,899
  • Overall Total: $83,290,027

References

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