Democrats Propose Increase in State’s Cigarette Tax To Cover Budget Deficit
As part of the Legislature's continuing efforts to pass a budget plan for the fiscal year that began July 1, Assembly Speaker Herb Wesson (D-Culver City) yesterday outlined a proposal that would increase the state's tax on cigarettes to $3 per pack, the Los Angeles Times reports. Lawmakers thus far have been unable to agree on a budget that would offset a $23.6 billion shortfall (Tamaki, Los Angeles Times, 8/7). While Democrats favor increasing taxes to cover the shortfall, doing so requires a two-thirds majority vote, meaning that at least four Assembly Republicans would need to support any budget plan that includes a tax hike. The San Francisco Chronicle reports that no Republicans have indicated they will agree to such a plan (Lucas, San Francisco Chronicle, 8/7). Wesson's proposal aims to win Republican support by dropping a provision from earlier spending proposals that would increase the state's vehicle licensing fees. Wesson's plan would instead increase the state's cigarette tax from 87 cents to $3 (Los Angeles Times, 8/7). The nearly 250% tax increase would boost the retail price of a pack of cigarettes to $7 and would generate an estimated $1.7 billion each year (Sanders, Sacramento Bee, 8/7). Studies have indicated that increasing tobacco taxes 10% or higher reduces the smoking rate by 4%, Wesson said, adding, "This is the only tax that saves lives" (Los Angeles Times, 8/7). Further, an increased tobacco tax would save the state $7 billion annually on health costs related to tobacco use, Democrats said (San Francisco Chronicle, 8/7). Republicans, however, disputed that claim, the Times reports. Although they supported the move to drop the vehicle fees, Assembly member John Campbell (R-Irvine) said, "If smoking drops off, the state's position becomes worse [because of declining revenues]. So if you don't smoke, the state is in trouble" (Los Angeles Times, 8/7).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.