California Proposition 56, Tobacco Tax Increase (2016)

California Proposition 56
Election date November 8, 2016
Topic Tobacco
Status a Approved
Type Amendment & Statute	Origin Citizens

2016 measures
June 7
Proposition 50 a
November 8
Proposition 51 a
Proposition 52 a
Proposition 53 d
Proposition 54 a
Proposition 55 a
Proposition 56 a
Proposition 57 a
Proposition 58 a
Proposition 59 a
Proposition 60 d
Proposition 61 d
Proposition 62 d
Proposition 63 a
Proposition 64 a
Proposition 65 d
Proposition 66 a
Proposition 67 a
Polls
Voter guides
Campaign finance
Signature costs

California Proposition 56, the Tobacco Tax Increase Initiative, was on the November 8, 2016, ballot in California as a combined initiated constitutional amendment and state statute. It was approved.

A "yes" vote favored increasing the cigarette tax by $2.00 per pack, with equivalent increases on other tobacco products and electronic cigarettes.

A "no" vote opposed increasing the cigarette tax by $2.00 per pack, with equivalent increases on other tobacco products and electronic cigarettes.

The tobacco tax increase went into effect on April 1, 2017.

Initiatives to increase taxes on tobacco products were also on the ballot in Colorado as Amendment 73, Missouri as Proposition A and Amendment 3, and North Dakota as Measure 4 in 2016.

Election results

Proposition 56
Result		Votes	Percentage
a Yes		8,980,448	64.43%
No		4,957,994	35.57%

Election results from California Secretary of State

Overview

Status of the tobacco tax in California

California had a tobacco excise tax of $0.87 per pack of cigarettes in 2016. The average state tobacco tax was $1.65 in 2016. Fourteen states had lower tobacco taxes than California, while 34 states and D.C. had higher taxes. The federal government levied a $1.01 tobacco tax in 2016.

Prior to the passage of Proposition 56, revenue from the state tax on tobacco went to the General Fund, tobacco prevention, healthcare services for low-income persons, environmental protection, breast cancer screenings and research, and early childhood development programs.

Changes to state law

Proposition 56 increased the tobacco tax by $2.00, bringing the total tobacco tax up to $2.87 per pack of cigarettes. The tobacco tax was levied on other tobacco products and e-cigarettes as well. Revenue from the additional $2.00 tax was allocated to physician training, prevention and treatment of dental diseases, Medi-Cal, tobacco-use prevention, research into cancer, heart and lung diseases, and other tobacco-related diseases, and school programs focusing on tobacco-use prevention and reduction.

State of the ballot measure campaigns

No on 56 outraised supporters two-to-one. Yes on 56 had received $35.53 million, while opponents had raised $70.98 million. Two of the largest cigarette manufacturers in the U.S., Philip Morris USA, R.J. Reynolds Tobacco Company, and their affiliates, together contributed over $69 million to No on 56. Supporters’ biggest donor was Tom Steyer, who contributed over $11.55 million. Prior to the election, polls showed support for Proposition 56 around 60 percent. The California Democratic Party backed the measure, and the California Republican Party opposed it.

Initiative design

Tax allocation in 2016

California levies an excise tax on tobacco products. In 2016, the tobacco tax was 87 cents per pack of cigarettes. Revenue from the tax was distributed as follows:

• 10 cents to the General Fund. About $84 million was raised for the fund in fiscal year 2015-2016 due to this allocation.
• 25 cents towards tobacco prevention, healthcare services for low-income persons, and environmental protection. Proposition 99 of 1988 created this portion of the tax. About $259 million was raised for these services in fiscal year 2015-2016.
• 2 cents towards breast cancer screenings and research. For fiscal year 2015-2016, $20 million was raised for these services.
• 50 cents towards early childhood development programs. Proposition 10 of 1998 created this portion of the tax. About $447 million was raised for these programs in fiscal year 2015-2016.

The federal government also levied a tobacco tax at $1.01 per pack of cigarettes.

Changes made by Proposition 56

Proposition 56 did not change how the 87-cent tobacco tax is allocated. Rather, the measure added an additional $2.00 tax, bringing the total tobacco tax up to $2.87 per pack of cigarettes. It increased the excise tax on other tobacco products equivalently. Proposition 56 changed the definition of "other tobacco products" in state law to include e-cigarettes. Therefore, Proposition 99 and Proposition 10 taxes apply to e-cigarettes.

Revenue distribution

Revenue from the $2.00 tax levied by Proposition 56 was distributed through a four-step process:

• Step 1: use new revenue to replace old revenue lost due to lower tobacco consumption resulting from tobacco tax increase.
• Step 2: use next 5 percent of revenue to pay the costs of administering the tax.
• Step 3: allocate $48 million to enforcing tobacco laws, $40 million to physician training to increase the number of primary care and emergency physicians in the state, $30 million toward preventing and treating dental diseases, and $400,000 to the California State Auditor to audit funds from the new tax.
• Step 4: allocate 82 percent of remaining funds toward services related to Medi-Cal; 11 percent of remaining funds toward tobacco-use prevention; 5 percent of remaining funds toward research into cancer, heart, and lung diseases and other tobacco-related diseases; and 2 percent of remaining funds toward school programs focusing on tobacco-use prevention and reduction.

Text of measure

Ballot title

The official ballot title was as follows:

“

Cigarette Tax to Fund Healthcare, Tobacco Use Prevention, Research, and Law Enforcement. Initiative Constitutional Amendment and Statute.

”

Ballot summary

The long-form ballot summary was as follows:

“

Increases cigarette tax by $2.00 per pack, with equivalent increase on other tobacco products and electronic cigarettes containing nicotine. Allocates revenues primarily to increase funding for existing healthcare programs; also for tobacco use prevention/control programs, tobacco-related disease research and law enforcement, University of California physician training, dental disease prevention programs, and administration. Excludes these revenues from Proposition 98 funding requirements. If tax causes decreased tobacco consumption, transfers tax revenues to offset decreases to existing tobacco-funded programs and sales tax revenues. Requires biennial audit.

”

The shorter ballot label summary was as follows:

“

Increases cigarette tax by $2.00 per pack, with equivalent increase on other tobacco products and electronic cigarettes containing nicotine. Fiscal Impact: Additional net state revenue of $1 billion to $1.4 billion in 2017-18, with potentially lower revenues in future years. Revenues would be used primarily to augment spending on health care for low-income Californians.

”

The long-form, official ballot summary for Proposition 56 was identical to the initial summary provided to initiative proponents for the purpose of circulating the initiative for signature collection.

Full text

The full text of the measure could be found here.

Fiscal impact

Note: The fiscal impact statement for a California ballot initiative authorized for circulation is jointly prepared by the state's legislative analyst and its director of finance. The statement was as follows:

“

Increased net state revenue of $1 billion to $1.4 billion in 2017-18, with potentially lower annual revenues over time. These funds would be allocated to a variety of specific purposes, with most of the monies used to augment spending on health care for low income Californians.

”

Constitutional changes

Proposition 56 added a Section 23 to Article XVI of the California Constitution:

SEC. 23. The tax imposed by the California Healthcare, Research and Prevention Tobacco Tax Act of 2016 and the revenue derived therefrom, including investment interest, shall not be considered General Fund revenues for purposes of Section 8 and its implementing statutes, and shall not be considered “General Fund revenues,” “state revenues,” or “General Fund proceeds of taxes” for purposes of subdivisions (a) and (b) of Section 8 and its implementing statutes.

Proposition 56 added a Section 14 to Article XIII B of the California Constitution:

SEC. 14. “Appropriations subject to limitation” of each entity of government shall not include appropriations of revenue from the California Healthcare, Research and Prevention Tobacco Tax Act of 2016 Fund created by the California Healthcare, Research and Prevention Tobacco Tax Act of 2016. No adjustment in the appropriations limit of any entity of government shall be required pursuant to Section 3 as a result of revenue being deposited in or appropriated from the California Healthcare, Research and Prevention Tobacco Tax Act of 2016 Fund.

Background

Below is a chart detailing the state tobacco excise tax in all 50 states, plus the District of Columbia, as of August 1, 2016. The federal government levied a $1.01 tobacco tax in 2016. In 2016, New York had the highest tobacco tax at $4.35 per pack of cigarettes. Missouri had the lowest tobacco tax at 17 cents per pack of cigarettes. The mean or average tobacco tax was $1.65.

State	2016 tobacco taxes	Rank
Alabama	$0.675	40
Alaska	$2.00	13
Arizona	$2.00	13
Arkansas	$1.15	33
California	$0.87	37
Colorado	$0.84	38
Connecticut	$3.90	2
Delaware	$1.60	24
Florida	$1.339	29
Georgia	$0.37	49
Hawaii	$3.20	5
Idaho	$0.57	45
Illinois	$1.98	18
Indiana	$1.00	36
Iowa	$1.36	28
Kansas	$1.29	31
Kentucky	$0.60	43
Louisiana	$1.08	34
Maine	$2.00	13
Maryland	$2.00	13
Massachusetts	$3.51	4
Michigan	$2.00	13
Minnesota	$3.00	8
Mississippi	$0.68	39
Missouri	$0.17	51
Montana	$1.70	21
Nebraska	$0.64	41
Nevada	$1.80	19
New Hampshire	$1.78	20
New Jersey	$2.70	9
New Mexico	$1.66	23
New York	$4.35	1
North Carolina	$0.45	47
North Dakota	$0.44	48
Ohio	$1.60	24
Oklahoma	$1.03	35
Oregon	$1.32	30
Pennsylvania	$2.60	10
Rhode Island	$3.75	3
South Carolina	$0.57	45
South Dakota	$1.53	26
Tennessee	$0.62	42
Texas	$1.41	27
Utah	$1.70	21
Vermont	$3.08	6
Virginia	$0.30	50
Washington	$3.025	7
Washington, D.C.	$2.50	12
West Virginia	$1.20	32
Wisconsin	$2.52	11
Wyoming	$0.60	43

This map is current as of September 18, 2016.

Support

Yes on 56 - Save Lives California led the campaign in support of Proposition 56.

Supporters

Officials

• U.S. Rep. Karen Bass (D-37)
• U.S. Rep. Ted Lieu (D-33)
• Secretary of State Alex Padilla (D)
• Controller Betty Yee (D)
• Insurance Commissioner Dave Jones (D)
• State Superintendent Tom Torlakson
• Sen. Kevin de Leon (D-24)
• Sen. Ben Allen (D-26)
• Sen. Bill Monning (D-17)
• Sen. Carol Liu (D-25)
• Sen. Richard Pan (D-6)
• Sen. Ed Hernandez (D-22)
• Sen. Fran Pavley (D-27)
• Sen. Jerry Hill (D-13)
• Sen. Jim Beall (D-15)
• Sen. Mark Leno (D-11)
• Sen. Marty Block (D-39)
• Sen. Ricardo Lara (D-33)
• Asm. Anthony Rendon (D-63)
• Asm. Autumn Burke (D-62)
• Asm. Bill Quirk (D-20)
• Asm. Das Williams (D-37)
• Asm. David Chiu (D-17)
• Asm. Ed Chau (D-49)
• Asm. Evan Low (D-28)
• Asm. Joaquin Arambula (D-31)
• Asm. Lorena Gonzalez (D-80)
• Asm. Mark Stone (D-29)
• Asm. Miguel Santiago (D-53)
• Asm. Rob Bonta (D-18)
• Asm. Susan Bonilla (D-14)

Parties

• California Democratic Party
• Green Party of California
• Los Angeles County Democratic Party
• Democratic Party of the San Fernando Valley
• Santa Monica Democratic Club
• Harvey Milk LGBT Democratic Club

Organizations

Civic and environmental organizations Alliance San Diego African American Tobacco Control Leadership Council AltaMed Action Fund State PAC Asian & Pacific Islander American Health Forum Asian Americans Advancing Justice – Los Angeles Asian American Senior Citizens Service Center (AASCSC) Asian Pacific Community Fund Asian Pacific Partners for Empowerment, Advocacy and Leadership (APPEAL) Asian Resources Inc. (ARI) California Environmental Justice Alliance Action California League of Conservation Voters California Pan-Ethnic Health Network California Partnership CAPITAL (Council of Asian and Pacific Islanders Together for Advocacy & Leadership) The Center on Policy Initiatives (CPI) Chinese America Citizen Alliance (CACA) Coalition of Lavender-Americans on Smoking and Health (CLASH) Consumer Action Courage Campaign EqualityCA Filipino Advocates for Justice The Greenlining Institute HONOR PAC InnerCity Struggle Koreatown Immigrant Workers’ Alliance (KIWA) Korean Community Center of the East Bay Korean Churches for Community Development (KCCD) Latino Coalition for a Healthy California MarinLink Mexican American Legal Defense and Educational Fund (MALDEF) NAACP, California National Asian Pacific American Families Against Substance Abuse (NAPAFASA) National Korean American Service & Education Consortium (NAKASEC) NextGen California PICO California San Francisco AIDS Foundation Save The Bay Services Immigrant Rights and Education Network (SIREN) Sierra Club Social Justice Learning Institute, Inc. Vietnamese Reach for Health Coalition (VRHC) William C. Velasquez Institute Education organizations and school districts California Faculty Association California School Board Association California State PTA Firebaugh-Las Deltas Unified School District Oakland Unified School District San Diego Unified School Board Sacramento City Unified School District Sonoma County Board of Education Child advocate organizations Campaign for Tobacco Free Kids Children’s Defense Fund — California Children Now The Children’s Partnership Common Sense Kids Action El Camino Children and Family Services, Inc. Special Needs Network, Inc. Business associations Artesia Chamber of Commerce Bay Area Council Beverly Hills Chamber of Commerce BizFed – Los Angeles County Business Federation Crenshaw Chamber of Commerce Cupertino Chamber of Commerce El Monte/South El Monte Chamber of Commerce Hollywood Chamber of Commerce Inland Empire African American Chamber of Commerce Los Angeles Area Chamber of Commerce Los Angeles Latino Chamber of Commerce North Orange County Chamber of Commerce San Gabriel Valley Economic Partnership Silicon Valley Leadership Group Southern California Hispanic Chamber of Commerce The Asian American Small Business PAC Unions Alameda Labor Council American Federation of State, County and Municipal Employees (AFSCME) Butte – Glenn Counties CLC California Labor Federation Central Labor Council of Contra Costa County Five Counties CLC Fresno-Madera-Tulare-Kings CLC Humboldt and Del Norte Counties CLC Kern, Inyo and Mono Counties CLC Los Angeles County Federation of Labor Marysville Central Labor Council Merced-Mariposa CLC Monterey Bay CLC Napa-Solano CLC North Bay Labor Council North Valley Labor Federation Orange County Labor Federation Sacramento CLC San Bernardino-Riverside CLC San Diego-Imperial CLC San Francisco Labor Council San Joaquin-Calaveras CLC San Mateo County CLC Service Employees International Union California (SEIU) SEIU 2015 SEIU 721 SEIU Local 99 Education Workers United SEIU United Service Workers West South Bay AFL-CIO Labor Council Stanislaus-Tuolumne CLC Tri-Counties CLC

Individuals

• Former Mayor Michael Bloomberg, New York City
• Tom Steyer

Arguments

Yes on 56’s “Save Lives” ad

Supporters made the following arguments in support of Proposition 56:

• The proposition would reduce tobacco-related healthcare costs and would help pay for those costs.
• The proposition would prevent youth smoking and would also address tobacco marketing aimed at youth as a target customer.
• The proposition includes transparency and accountability safeguards for use of the tax revenue generated.

Yes on 56, the organization that led the fight in support of Proposition 56, focused on three points:

“

Protect children. Thousands of youth become addicted to tobacco each year. Now tobacco companies are targeting kids with candy-flavored electronic cigarettes containing nicotine. It has been proven that higher tobacco taxes reduce teen smoking. Saves lives. Smoking is the number one cause of preventable death in California. This initiative will save lives by preventing kids from getting hooked on tobacco, improving health care, and fighting cancer and other tobacco-related diseases. Asks smokers to pay their fair share to improve health care and fight cancer. This is simply a user fee on those who continue to use tobacco. It will mean smokers help pay for cancer treatment, smoking prevention, health care, and research to fight cancer and other tobacco-related diseases.

”

Official arguments

JoAnna Morales, former chair of the Board of the American Cancer Society in California, Tami Titteletiz, leadership board member of the American Lung Association in California, and David Lee, president of the American Heat Association Western States Affiliate, wrote the official argument in support of Proposition 56 found in the state voters guide. Their argument was as follows:

The American Cancer Society Cancer Action Network, American Lung Association in California and American Heart Association are sponsoring Prop 56 because taxing tobacco saves lives by getting people to quit or never start smoking. Get the facts at YesOn56.org. VOTE YES ON PROP 56 TO KEEP KIDS FROM SMOKING AND REDUCE TOBACCO- RELATED HEALTHCARE COSTS Tobacco remains a DEADLY, COSTLY product that hurts all Californians — even those who don't smoke. Each year, tobacco causes more deaths than guns, car accidents, HIV, alcohol, and illegal drugs combined. Tobacco is the #1 cause of preventable death — killing 40,000 Californians annually. Each year, tobacco-related healthcare costs Californian taxpayers $3.58 BILLION. At the same time, Big Tobacco has made billions in profits off California and is still trying to hook future generations into a lifetime of addiction. They know Prop 56 will prevent youth smoking. That's why they'll spend millions of dollars to defeat Prop 56: to protect their profits at our expense. PROP 56 WORKS LIKE A USER FEE, TAXING TOBACCO TO HELP PAY FOR TOBACCO-RELATED HEALTHCARE COSTS Prop 56 increases the tax on cigarettes and other tobacco products, including electronic cigarettes. The only people who will pay are those who use tobacco products, and that money will fund already existing programs to prevent smoking, improve healthcare and research cures for cancer and tobacco-related diseases. PROP 56 IS ABOUT FAIRNESS — IF YOU DON'T USE TOBACCO, YOU DON'T PAY California taxpayers spend $3.58 BILLION every year — $413 per family whether they smoke or not — paying medical costs of smokers. Prop 56 is a simple matter of fairness — it works like a user fee on tobacco products to reduce smoking and ensure smokers help pay for healthcare costs. PROP 56 HELPS PREVENT YOUTH SMOKING Increasing tobacco taxes reduces youth smoking according to the US Surgeon General. Yet California has one of the lowest tobacco taxes nationwide. This year alone, an estimated 16,800 California youth will start smoking, one-third of whom will die from tobacco-related diseases. In every state that has significantly raised cigarette taxes smoking rates have gone down. Prop 56 is so important because it helps prevent youth from becoming lifelong addicts and will save lives for future generations. PROP 56 FIGHTS BIG TOBACCO'S LASTEST SCHEME TO TARGET KIDS Electronic cigarettes are Big Tobacco's latest effort to get kids hooked on nicotine. They know that 90% of smokers start as teens. Teens that use e-cigarettes are twice as likely to start smoking traditional cigarettes, That's why every major tobacco corporation now owns at least one e-cigarette brand, Some e-cigarettes even target children with predatory themes like Barbie, Minions and Tinker Bell, and flavors like cotton candy and bubble gum. Prop 56 taxes e-cigarettes just like tobacco products, preventing our kids from getting hooked on this addictive, costly, deadly habit. PROP 56 INCLUDES TOUGH TRANSPARENCY AND ACCOUNTABILITY MEASURES Prop 56 has built-in safeguards, including independent audits and strict caps on overhead spending and administrative costs, And Prop 56 explicitly prohibits politicians from diverting funds for their own agendas. SAVE LIVES. VOTE YES ON 56.

Campaign advertisements

The following video advertisements were produced by Yes on 56:

A Yes on 56 ad titled "Why Yes?"

A Yes on 56 ad titled "Trust"

A Yes on 56 ad titled "Butterfly"

Opposition

No on 56 - Stop the Special Interest Tax Grab led the campaign in opposition to Proposition 56.

Opponents

Officials

• U.S. Rep. Tom McClintock (R-4)
• Mayor Robert Pacheco, Walnut

Parties

• California Republican Party
• Libertarian Party of California
• California Peace and Freedom Party

Organizations

• California Taxpayers Association
• Howard Jarvis Taxpayers Association
• California Manufacturers and Technology Association
• California Black Chamber of Commerce
• California Retailers Association
• Hispanic Leadership Fund
• Hispanic 100
• National Tax Limitation Committee
• California Taxpayer Protection Committee
• Alliance of Contra Costa Taxpayers
• Calaveras County Taxpayers Association
• Napa County Taxpayers Association
• Fullerton Association of Concerned Taxpayers
• Humboldt County Taxpayers League
• Inland Empire Taxpayers Association
• Sacramento Taxpayers Association
• San Joaquin County Taxpayers Association
• Silicon Valley Taxpayers Association
• Solano County Taxpayers Association
• Sutter County Taxpayers Association
• California State Fraternal Order of Police
• Association of Orange County Deputy Sheriffs
• Orange County Coalition of Police & Sheriffs
• Taxpayers Protection Alliance
• San Diego Tax Fighters
• Big Bear Chamber of Commerce
• Industry Manufacturers Council

Businesses

• Philip Morris USA Inc.
• R.J. Reynolds Tobacco Company

Individuals

• Kevin Drum, political blogger for Mother Jones

Arguments

No on 56's “Stop the Special Interest Tax Grab.”

Opponents made the following arguments in opposition to Proposition 56:

• The proposition would fund insurance companies and special interests more than it would fund treatments for smoking-related illnesses and youth smoking prevention.
• The proposition would not allocate funds for improving schools.
• The tax revenue that would be generated by the proposition should address other issues.
• The proposition would waste money on overhead and bureaucracy.

No on 56, the group leading the fight against Proposition 56, made the following arguments against the measure:

“

Prop 56 is a $1.4 billion “tax hike grab” by insurance companies and other wealthy special interests to dramatically increase their profits by shortchanging schools and ignoring other pressing problems. 1. Prop. 56 cheats schools out of at least $600 million per year. 2. Prop. 56 doesn’t solve problems facing California families. 3. Prop. 56 fattens insurance company profits. 4. Prop. 56 spends up to $147 million per year on overhead and bureaucracy.

”

Official arguments

Tom Bogetich, former executive director of the California State Board of Education, Arnold M. Zeiderman, former director of maternal health and family planning at the Los Angeles County Department of Health, and Tom Dominguez, president of the Association of Orange County Deputy Sheriffs, wrote the official argument against Proposition 56 found in the state voters guide. Their argument was as follows:

WE ALL WANT TO HELP THOSE WHO WANT TO STOP SMOKING, BUT PROP. 56 IS NOT WHAT IT APPEARS TO BE. Prop. 56 is a $1.4 billion "tax hike grab" by insurance companies and other wealthy special interests to dramatically increase their profits by shortchanging schools and ignoring other pressing problems. Prop. 56 allocates just 13% of new tobacco tax money to treat smokers or stop kids from starting. If we are going to tax smokers another $1.6 billion per year, more should be dedicated to treating them and keeping kids from starting. Instead, most of the $1.6 billion in new taxes goes to health insurance companies and other wealthy special interests, instead of where it is needed. PROP. 56 CHEATS SCHOOLS OUT OF AT LEAST $600 MILLION PER YEAR. California's Constitution (through Proposition 98), requires that schools get at least 43% of any new tax increase. Prop. 56 was purposely written to undermine our Constitution's minimum school funding guarantee, allowing special interests to deceptively divert at least $600 million a year from schools to health insurance companies and other wealthy special interests. Not one penny of the new tax money will go to improve our kids' schools. PROP. 56 DOESN'T SOLVE PROBLEMS FACING CALIFORNIA FAMILIES. We have many pressing problems in California, like fully funding our schools, repairing roads, solving the drought and fighting violent crime. If we are going to raise taxes, we should be spending this new tax revenue on these problems. PROP. 56 FATTENS INSURANCE COMPANY PROFITS. In another deception, health insurance companies and wealthy special interests wrote Prop. 56 and are spending millions to pass it so that they can get paid as much as $1 billion more for treating the very same Medi-Cal patients they already treat today. They are not required to accept more Medi-Cal patients to get this money. Instead of treating more patients, insurance companies can increase their bottom line and more richly reward their CEOs and senior executives. In fact, the Prop. 56 spending formula gives insurance companies and other health care providers 82% of this new tax. PROP. 56 SPENDS OVER $147 MILLION PER YEAR ON OVERHEAD AND BUREAUCRACY. This $147 million can be spent each year with virtually no accountability to taxpayers. This could lead to massive waste, fraud, and abuse. In fact, Prop. 56 spends nearly as much money on administration and overhead as it does on tobacco prevention efforts! NO ON PROP. 56 NO to wealthy special interests using our initiative process just to increase their profits. NO to cheating schools out of at least $600 million per year. NO to millions of new tax dollars going to overhead and administration with the potential for waste, fraud, and abuse. NO to rewarding health insurance companies and wealthy special interests with even bigger profits, instead of solving real problems like roads, violent crime and fully funding our schools. PLEASE READ IT FOR YOURSELF AND FOLLOW THE PROP. 56 MONEY AT: www.noonproposition56.com

Campaign advertisements

The following video advertisements were produced by No on Prop 56:

A No on Prop 56 ad titled "Cheats Our Kids' Schools"

A No on Prop 56 ad titled "Stop the Special Interest Tax Grab"

Campaign finance

The campaign finance information on this page reflects the most recent scheduled reports that Ballotpedia has processed, which covered through December 31, 2016.

See also: Campaign finance requirements for California ballot measures

Five committees registered to support Proposition 56. Together they reported over $34.5 million in contributions. Three committees registered to oppose Proposition 56. Together they reported over $70.9 million in contributions.

	Cash Contributions	In-Kind Contributions	Total Contributions	Cash Expenditures	Total Expenditures
Support	$33,128,370.92	$1,379,416.29	$34,507,787.21	$34,893,669.40	$36,273,085.69
Oppose	$69,231,144.00	$1,747,201.45	$70,978,345.45	$68,801,508.21	$70,548,709.66
Total	$102,359,514.92	$3,126,617.74	$105,486,132.66	$103,695,177.61	$106,821,795.35

Support

The following table includes contribution and expenditure totals for the committees in support of the ballot measure.

Committees in support of Proposition 56
Committee	Cash Contributions	In-Kind Contributions	Total Contributions	Cash Expenditures	Total Expenditures
Yes on 56 - Saves Lives California, a coalition of Doctors, Dentists, Health Plans, Labor, Hospitals and Non-profit Health Advocate Organizations	$30,270,078.10	$1,337,862.37	$31,607,940.47	$29,488,167.40	$30,826,029.77
Million Voter Project Action Fund - Yes on 55, 56, 57, 58, 62, and No on 66	$2,080,964.45	$0.00	$2,080,964.45	$2,080,964.45	$2,080,964.45
Million Voter Project Action Fund - Yes on 55 and 57	$426,035.55	$0.00	$426,035.55	$2,971,957.38	$2,971,957.38
California Kids Campaign, Yes on Props 55 & 56	$295,000.00	$0.00	$295,000.00	$268,333.93	$268,333.93
Fight Cancer - Yes on 56	$56,292.82	$41,553.92	$97,846.74	$84,246.24	$125,800.16
Total	$33,128,370.92	$1,379,416.29	$34,507,787.21	$34,893,669.40	$36,273,085.69

Donors

The following table shows the top donors to the committee registered in support of the ballot measure.

Donor	Cash Contributions	In-Kind Contributions	Total Contributions
Thomas F. Steyer	$10,300,000.00	$0.00	$10,300,000.00
California Hospitals Committee on Issues	$10,000,000.00	$0.00	$10,000,000.00
California State Council of Service Employees Issues Committee	$2,000,000.00	$99,895.50	$2,099,895.50
Thomas Steyer	$1,750,000.00	$0.00	$1,750,000.00
California Dental Association	$1,000,000.00	$10,655.05	$1,010,655.05

Opposition

The following table includes contribution and expenditure totals for the committees in opposition to the ballot measure.

Committees in opposition to Proposition 56
Committee	Cash Contributions	In-Kind Contributions	Total Contributions	Cash Expenditures	Total Expenditures
No on 56 - Stop the Special Interest Tax Grab	$69,195,500.00	$1,747,201.45	$70,942,701.45	$68,765,864.21	$70,513,065.66
California Citizens Against Special Interests and Wasteful Taxes, No on Prop. 56	$32,050.00	$0.00	$32,050.00	$32,050.00	$32,050.00
Protect Small Business and Smoke Free Alternatives, No on 56	$3,594.00	$0.00	$3,594.00	$3,594.00	$3,594.00
Total	$69,231,144.00	$1,747,201.45	$70,978,345.45	$68,801,508.21	$70,548,709.66

Donors

The following table shows the top donors to the committee registered in opposition to the ballot measure.

Donor	Cash Contributions	In-Kind Contributions	Total Contributions
Philip Morris USA Inc.	$42,777,900.00	$1,292,048.63	$44,069,948.63
R.J. Reynolds	$24,767,100.00	$115,262.73	$24,882,362.73
Fontem Ventures USA, Inc.	$1,500,250.00	$0.00	$1,500,250.00
McLane Company, Inc.	$100,000.00	$700.00	$100,700.00
Core-Mark International, Inc.	$50,000.00	$9,307.09	$59,307.09

Methodology

To read Ballotpedia's methodology for covering ballot measure campaign finance information, click here.

Media editorials

Support

• The Bakersfield Californian: "The present anti-smoking efforts and the tax money to support them are victims of their own success. As the number of smokers declines, so does the volume of cigarettes sold and the amount of taxes collected. Without an infusion of cash, California’s anti-smoking efforts and treatment may plateau, or even worse reverse. Californians should vote YES on Prop. 56 to maintain and expand the state’s anti-smoking and treatment programs."

• East Bay Express: "We don’t always embrace regressive taxes, but a smart thing about this $2-per-pack increase on cigarettes and comparable tax on other tobacco products is that there is a limit on administrative expenses, and it would inject nearly $1 billion into the Medi-Cal program, which provides health-care coverage to low-income residents."

• The Highlander: “It is the belief of this editorial board that the increase on the current taxes on these products will benefit public health by discouraging many people from ever starting to use them. The revenue generated by these taxes will also be used to the benefit the public more directly by funding medical care for lower-income groups in the form of Medi-Cal.”

• Los Angeles Times: "That’s too bad because tobacco taxes are really a brilliant and beautiful thing: They not only bring in revenue for government but also serve a social good in the process. On average, peer-reviewed studies have shown, a 10% increase in the total price of cigarettes will yield a 3% to 4% reduction in adult consumption — and a 7% reduction among young smokers."

• Marin Independent Journal: "A $2-per-pack tax on cigarettes and electronic smoking devices sounds like a lot. But California’s tax on cigarettes is far less than other states charge. Proposition 56 would raise the state tax to $2.87 per pack. New York’s tax is $4.35 per pack."

• The Mercury News: "The need is urgent: E-cigarettes have increased teen smoking at an alarming rate. The Centers for Disease Control reported last year that vaping by middle- and high-school students tripled from 4.5 percent in 2013 to 13.4 percent in 2014. It's an easy slip from there to tobacco, and the harm is similar. The proposition raises the tax on e-cigarettes, as well as on other tobacco products, at levels equivalent to the per-pack cigarette hike. It's way past time for California to do this. Voters should resoundingly approve Proposition 56."

• The Record: “Vote yes. Our concern is that this tax would impact poor smokers more than those well-to-do smokers, but the tax would increase funding to health programs.”

• The Sacramento Bee: "In 1988, one in four Californians smoked. That was the year voters approved Proposition 99, a landmark initiative that raised tobacco taxes by 25 cents per pack, primarily to fund what then was a unique state-run anti-tobacco campaign. It has been a public health success. Now, 12 percent of Californians smoke."

• San Diego City Beat: “Hiking tobacco taxes is a proven way to deter smoking habits, so guess which industry is against it.”

• San Diego Free Press and OB Rag endorsed Proposition 56.

• The San Diego Union-Tribune: “Giving a significantly higher percentage of revenue to anti-smoking programs would have been preferable. But especially because the higher price is likely to deter smoking — and to deter young people from starting smoking — we offer our strong support. Yes on Proposition 56.”

• San Francisco Chronicle: "The case for a specific excise tax on tobacco is overwhelming. The drafters of Prop. 56 have done a responsible job of apportioning the up to $1.4 billion in new revenue from the tax to efforts to either prevent or offset the public burden caused by smoking. The major beneficiary would be the Medi-Cal program, which would receive between $710 million and $1 billion in 2017-18, according to the Legislative Analyst’s Office. Smaller amounts would go into education and cessation programs. It would limit administrative spending to no more than 5 percent."

• San Francisco Examiner: "Revenue from the tax would help fund physician training, prevention and treatment of dental diseases, Medi-Cal, tobacco-use prevention, research into cancer, heart and lung diseases, and other tobacco-related diseases, and school programs focusing on tobacco-use prevention and reduction."

• Ventura County Star: "Empirical evidence shows that if the price of tobacco is raised dramatically, it results in a decline in teen-age smoking, because cost is one of the primary forces controlling teens who start experimenting with smoking."

Opposition

• San Mateo Daily Journal recommended a "No" vote on Proposition 56.

• Southern California News Group, which includes the Orange County Register, LA Daily News, and Long Beach Press-Telegram: "Prop. 56 fails to meet these basic expectations, however. In addition to taxing demonstrably harmful products like cigarettes, the initiative imposes a new $2 tax on electronic cigarettes, which are not tobacco products and which might actually serve as a less harmful alternative to real cigarettes. Even more troublingly, the initiative does not allocate funds in manner [sic] consistent with its promise to 'save lives.'”

Other opinions

• The Mercury News published an editorial on the "No" campaign's advertisements:

“

Nobody blows smoke in the face of voters better than the tobacco industry. … The ads are insidious. They tug at parents’ heartstrings, claiming the proposition takes money away from schools — a flat-out lie — and gives it to greedy insurance companies. In fact it goes to pay doctors to treat poor people who are newly-insured under Covered California. … But the tobacco industry’s despicable campaign is working. Bankrolled mainly by R.J. Reynolds and Philip Morris, the No on Prop. 56 campaign has spent more than $50 million to blanket the airwaves with scurrilous ads.

”

Polls

See also: Polls, 2016 ballot measures

• A USC Dornsife and Los Angeles Times joint poll found support at 63 percent for Proposition 56 in early September 2016.
• In September 2016, SurveyUSA surveyed voters on Proposition 56. Approximately 60 percent of respondents supported the initiative. Asking respondents about their demographic, political, and lifestyle characteristics, SurveyUSA found that 54 percent of smokers opposed the initiative. Of all the other groups surveyed, at least 50 percent supported the measure.
• A Field Poll/IGS Poll surveyed 943 likely voters and found support for Proposition 56 to be 53 percent. The biggest demographic difference was between age cohorts, with 79 percent of persons 18-29 and 46 percent of persons 65 and over supporting the measure.
• In mid September 2016, the Public Policy Institute of California found support for Proposition 56 to be around 59 percent.
• CALSPEAKS surveyed 622 likely voters on Proposition 56 in mid October 2016. Support among respondents was 62 percent.
• In mid October 2016, SurveyUSA found support for the initiative around 57 percent and opposition to the initiative around 35 percent.
• The Public Policy Institute of California (PPIC) surveyed 1,016 likely voters in mid- to late October 2016 and found support at 46 percent. PPIC broke respondents down into three racial/ethnic categories, "White," "Latino," and "Other." Latinos in the sample had the most favorable view, at 80 percent, of Proposition 56. Whites had the least favorable view, at 49 percent. Respondents classified as "Other" favored the measure 65 to 28 percent.
• The Field Poll/IGS Poll surveyed 1,498 likely voters between October 25 and October 31, 2016, and found support for the measure at 55 percent.

Polls with margins of error

California Proposition 56 (2016)
Poll	Support	Oppose	Undecided	Margin of error	Sample size
Public Policy Institute of California 10/14/2016 - 10/23/2016	56.0%	38.0%	6.0%	+/-4.3	1,016
SurveyUSA 10/13/2016 - 10/15/2016	57.0%	35.0%	7.0%	+/-3.7	752
CALSPEAKS 10/7/2016 - 10/13/2016	62.0%	26.0%	12.0%	+/-7.0	622
Public Policy Institute of California 9/9/2016 - 9/18/2016	59.0%	36.0%	5.0%	+/-3.5	1,702
SurveyUSA 9/8/2016 - 9/11/2016	60.0%	33.0%	7.0%	+/-3.7	712
USC Dornsife/Los Angeles Times 9/1/2016 - 9/8/2016	63.0%	32.0%	6.0%	+/-3.0	1,912
AVERAGES	59.5%	33.33%	7.17%	+/-4.2	1,119.33
Note: The polls above may not reflect all polls that have been conducted in this race. Those displayed are a random sampling chosen by Ballotpedia staff. If you would like to nominate another poll for inclusion in the table, send an email to editor@ballotpedia.org.

Polls without margins of error

Note: The Field Poll/IGS Poll does not report a margin of error because "[polls] conducted online using an opt-in panel do not easily lend themselves to the calculation of sampling error estimates as are traditionally reported for random sample telephone surveys."

California Proposition 56 (2016)
Poll	Support	Oppose	Undecided	Sample size
The Field Poll/IGS Poll 10/25/2016 - 10/31/2016	55.0%	43.0%	2.0%	1,498
The Field Poll/IGS Poll 9/7/2016 - 9/13/2016	53.0%	40.0%	7.0%	943
AVERAGES	54%	41.5%	4.5%	1,220.5
Note: The polls above may not reflect all polls that have been conducted in this race. Those displayed are a random sampling chosen by Ballotpedia staff. If you would like to nominate another poll for inclusion in the table, send an email to editor@ballotpedia.org.

Path to the ballot

See also: California signature requirements

• Dustin Corcoran, Laphonza Butler, Olivia M. Diaz-Lapham, Tom Steyer, and Lance H. Olson submitted a letter requesting a title and summary on November 10, 2015.
• A title and summary were issued by California's attorney general's office on December 15, 2015.
• 585,407 valid signatures were required for qualification purposes.
• On February 12, 2016, petitioners reached the 25 percent mark in their signature gathering effort, collecting more than 146,352 signatures.
• On May 16, 2016, supporters submitted over one million signatures to the California secretary of state.
• Proposition 56 was certified for the ballot on June 30, 2016.
• Supporters had until June 13, 2016, to collect the required signatures.

Cost of signature collection:
Sponsors of the measure hired Boven Consulting, Kimball Petition Management, Inc., Bridge Street, Inc. and Million Voter Project Action Fund to collect signatures for the petition to qualify this measure for the ballot. A total of $4,524,176.13 was spent to collect the 585,407 valid signatures required to put this measure before voters, resulting in a total cost per required signature (CPRS) of $7.73.

State profile

Demographic data for California
	California	U.S.
Total population:	38,993,940	316,515,021
Land area (sq mi):	155,779	3,531,905
Race and ethnicity**
White:	61.8%	73.6%
Black/African American:	5.9%	12.6%
Asian:	13.7%	5.1%
Native American:	0.7%	0.8%
Pacific Islander:	0.4%	0.2%
Two or more:	4.5%	3%
Hispanic/Latino:	38.4%	17.1%
Education
High school graduation rate:	81.8%	86.7%
College graduation rate:	31.4%	29.8%
Income
Median household income:	$61,818	$53,889
Persons below poverty level:	18.2%	11.3%
Source: U.S. Census Bureau, "American Community Survey" (5-year estimates 2010-2015) Click here for more information on the 2020 census and here for more on its impact on the redistricting process in California. **Note: Percentages for race and ethnicity may add up to more than 100 percent because respondents may report more than one race and the Hispanic/Latino ethnicity may be selected in conjunction with any race. Read more about race and ethnicity in the census here.

Presidential voting pattern

See also: Presidential voting trends in California

California voted for the Democratic candidate in all seven presidential elections between 2000 and 2024.

More California coverage on Ballotpedia

• Elections in California
• United States congressional delegations from California
• Public policy in California
• Endorsers in California
• California fact checks
• More...

Recent news

The link below is to the most recent stories in a Google news search for the terms California tobacco tax Proposition 56. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.

California Proposition 56, Tobacco Tax Increase (2016) - Google News

Related measures

2016

Tobacco measures on the ballot in 2016
State	Measures
Missouri	Missouri 60 Cent Cigarette Tax, Constitutional Amendment 3 d
Colorado	Colorado Tobacco Tax Increase, Amendment 72 d
Missouri	Missouri 23 Cent Cigarette Tax, Proposition A d

External links

Basic information

• Initiative Petition for Proposition 56
• California 2016 Voter Guide

Support

• Yes on 56
• Yes on 56 Facebook
• Yes on 56 Twitter

Opposition

• No on 56
• No on 56 Twitter
• No on 56 Facebook

Other resources

• Upvote California Podcasts on Ballot Measures

See also

Suggest a link

• 2016 ballot measures
• California 2016 ballot propositions
• California ballot measures

Footnotes

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