Bill Would Increase State Cigarette Tax to Reduce Deficit and Boost Anti-Smoking Programs

Sen. Debra Ortiz (D-Sacramento) has proposed legislation that would increase California's cigarette tax by 65 cents per pack in order to trim the state's $17.5 billion budget deficit and expand anti-tobacco programs, the San Diego Union-Tribune reports. The bill would boost the state's tax on cigarettes from 87 cents to $1.52 per pack, making it the highest such tax in the country. According to a state tax analyst, the tax rate on other tobacco products, such as cigars, pipes and chewing tobacco, would increase from about 53% to 71% under the bill. The tax increase is projected to generate about $750 million, more than half of which would go toward medical services for the working poor, "the community most affected by tobacco use," Ortiz said. She added, "The tax will encourage smokers to quit, and the revenues will be used to help them quit or to help care for them if they cannot quit." The state already collects hundreds of millions of dollars annually in tobacco taxes and payments from the national tobacco settlement. Brendan McCormick, a spokesperson for Philip Morris, said the more than $500 million the state receives from the settlement, not higher tobacco taxes, is the "most logical source of funding for anti-tobacco programs." The Union-Tribune reports that Ortiz's measure "appears to face long odds in an election year," and Gov. Gray Davis (D) has said he does not favor any new tax increases to help balance the state budget (Sweeney, San Diego Union-Tribune, 3/22).