PROP 10: Smokers Buying 30% Fewer Cigarettes This Year
Since Proposition 10 kicked in Jan. 1, shooting the price of cigarettes up by 50%, California stores have sold 30% fewer cigarettes to smokers, according to tax receipts. Filmmaker Rob Reiner, who championed the Prop. 10 push, called the preliminary evidence "beyond our expectations. I think it's terrific. We clearly are reducing smoking" (Johnson, San Jose Mercury News, 9/14). The initiative raised California's tobacco tax from 37 cents to 87 cents a pack, giving the state the third highest tobacco tax in the nation behind Alaska and Hawaii. Smokers also have been hit hard by a 45-cent-per-pack price increase levied by tobacco companies to help pay for the $206 billion settlement the companies must pay 46 states.
The Los Angeles Times reports that "California officials agreed that price hikes are causing consumption to decline among the state's 4 million smokers, but they suspect a market shift -- to both legal and illegal sources -- is at work as well" (Warren, 9/14). Further, the San Jose Mercury News points out, the sales receipts might not tell the whole story about the amount of smoking still going on. As a pack of cigarettes costs $4 in California, smokers may be turning to other outlets -- such as the Internet, other states and even Mexico -- for cheaper prices. Vic Day, a supervisor with the state Board of Equalization, added that smokers also anticipated Prop. 10, accounting for high sales toward the end of 1998 and lower returns in early 1999 (Johnson, San Jose Mercury News, 9/14).