California Lawmaker Renews Efforts for $2 Tobacco Tax Increase

On Wednesday, state Sen. Richard Pan (D-Sacramento) renewed efforts to increase California's tobacco tax by $2 per pack, the AP/Sacramento Bee reports (AP/Sacramento Bee, 8/26).

The current state tax on a pack of 20 cigarettes is 87 cents, plus a $1.01 federal tax (California Healthline, 5/5). In comparison, the average state tax is $1.60 per pack.

Details of Bill

Pan introduced a bill (SB 13) to raise the tobacco tax during the special legislative session on health care (AP/Sacramento Bee, 8/26). It joins a package of bills aimed at curbing smoking rates in the state (Nichols, "KXJZ News," Capital Public Radio, 8/26).

According to the AP/Bee, the bill's distribution tax would apply to both traditional and electronic cigarettes.

If approved, the tax increase is projected to raise about $1.5 billion in the first year. The money would go toward:

• Anti-smoking programs;
• Health services for low-income families; and
• Tobacco-related medical research (AP/Sacramento Bee, 8/26).

According to "KXJZ News," the state Senate could vote on the bill as soon as Thursday ("KXJZ News," Capital Public Radio, 8/26). If approved, it would be the state's first tobacco tax increase since 1998 (AP/Sacramento Bee, 8/26).

Bill Garners Support, Opposition

Opponents of the bill say it would impose an unnecessary burden on consumers and small businesses.

However, supporters say the bill could reduce tobacco use and save the state billions of dollars in health care costs (AP/Sacramento Bee, 8/26).

The bill is supported by a coalition of groups that includes the:

• California Medical Association;
• California Hospital Association; and
• Service Employees International Union.

The coalition also hopes to use the tax increase to help boost reimbursement rates for Medi-Cal providers, the Sacramento Bee's "Capitol Alert" reports. Medi-Cal is California's Medicaid program.

Pan said, "This bill really is about not just funding the Medi-Cal program but also to try and reduce smoking overall, which costs us more money than we're ever going to raise with this bill" (White, "Capitol Alert," Sacramento Bee, 8/26).

Supporters noted that if the measure fails in the Legislature, they will take the issue to the 2016 state ballot (AP/Sacramento Bee, 8/26).

Brown Administration's Comments

According to "Capitol Alert," Gov. Jerry Brown's (D) administration signaled support for the Legislature's effort to fund health care programs through a higher cigarette tax.

Jennifer Kent, director of the California Department of Health Care Services, said, "Everything's on the table from the standpoint that Medi-Cal consumes $93 to $94 billion in funds a year, both state and federal," so "if people are legitimately willing to take a hard look at doing an additional tobacco tax to support those services then we are willing to talk about ways that we would target it to better provide access."

She noted that any additional revenue would need to be designed to encourage:

• More doctors to accept Medi-Cal patients; or
• Doctors who already accept Medi-Cal patients to treat more (White, "Capitol Alert," Sacramento Bee, 8/26).

Voters Support Tobacco Tax

In related news, 67% of California voters support increasing the state's tobacco tax by $2 per pack, according to recent Field Poll, the Los Angeles Times' "PolitiCal" reports (McGreevy, "PolitiCal," Los Angeles Times, 8/26).

Specifically, the poll found that:

• 50% of respondents said they strongly support the tax increase;
• 17% said they somewhat support it; and
• 30% said they oppose it (Cadelago, "Capitol Alert," Sacramento Bee, 8/26).