Commentary: Big Tobacco fires up campaign against taxes

The Sacramento BeeApril 19, 2012 

Tobacco is different.

In the coming weeks, Californians once again will witness the industry's formidable power. Cigarette makers Altria and R.J. Reynolds will spend tens of millions of dollars telling us why Proposition 29, the latest attempt by anti-smokers to raise tobacco taxes, is a terrible idea.

In slick television ads, shills will explain how the $735 million that would be raised by the measure annually would be wasted on the creation and operation of a bloated bureaucracy. The industry probably will succeed. It usually does.

Ordinarily, I agree with arguments against initiatives. Proposition 29 on the June 5 ballot has its problems. But my decision is easy any time I have to choose between tobacco companies and cancer researchers, doctors who treat cancer and public health experts who try to prevent cancer.

The industry has "lied, misrepresented and deceived the American public, including smokers and the young people they avidly sought as 'replacement' smokers, about the devastating health effects of smoking and environmental tobacco smoke."

Those words didn't come from some anti-smoking fanatic. U.S. District Judge Gladys Kessler wrote them in 2006. After spending six years presiding over a Justice Department suit against the industry, Kessler concluded the industry violated civil provisions of the Racketeer Influenced and Corrupt Organizations Act, a law intended to combat the Mafia.

Given that only 11.9 percent of adults in this state smoke, you'd think tobacco would be on the run. But just as its products kill its customers, the industry is efficient at killing new taxes. This is one of only three states that haven't raised tobacco taxes since the start of the 21st century, and it's no accident.

The industry has spent $102 million on campaigns in California since 2000, including $66 million to defeat the last tax initiative in 2006. Tobacco companies have shelled $23 million to destroy the latest measure so far. More will come.

It makes good business sense. Proposition 29 would tack $1 to the cost of a pack of smokes, pushing the state tobacco tax to $1.87. Whenever prices rise, usage drops, particularly among young people, a coveted market; if people don't start smoking young, they probably never will.

Proposition 29 would earmark 60 percent of the new money, $441 million, for research into cancer and other tobacco-caused diseases. Another 15 percent would create "California research facilities" focused on prevention, detection, treatment and cures for tobacco-related illness. About $120 million would go to existing anti- tobacco programs.

To oversee the money, there'd be be a nine-member board that would include, among others, three UC chancellors and three directors of National Cancer Institute-designated cancer centers in California.

Presumably, the board would tilt to California researchers. The initiative says the measure's purpose would be to fund "research in California."

But the measure also contains a sentence suggesting that research money could go outside the state: "All qualified investigators, regardless of institutional affiliation, shall have equal access and opportunity to compete for funds in this act." The tobacco industry homes in on that line, contending that tax money raised in California would be spent outside California.

Jim Knox of the American Cancer Society, one of the initiative's main supporters, called the claim "another tobacco industry lie" and added that the "explicitly stated purpose" of the measure is to keep the money in California.

Initiatives are a terrible way to make laws. They are ambiguous. Promoters load them with their fondest wishes. But initiatives serve a function. Voters can step in when powerful forces block reasonable legislation.

The Legislature hasn't approved a tobacco tax increase since 1993, and that was a 2-cent boost to fund breast cancer research. Lawmakers have failed no fewer than 30 other times to raise tobacco taxes in the past 30 years, according to a body count of dead tobacco bills compiled by Proposition 29's backers.

The industry won't take an out-front role as it fights Proposition 29. It will pay for others to do that. Its use of fronts is a tactic laid bare in once-confidential tobacco industry documents housed in an online repository at UC San Francisco. The documents have become public as a result of various lawsuits against the industry.

One prominent opponent of Proposition 29 is Americans for Tax Reform, the nonprofit corporation headed by professional conservative Grover Norquist. Norquist pushes candidates for office to sign pledges vowing to oppose all tax increases – including tobacco tax hikes.

Norquist has a rich history of involvement with the tobacco industry. Industry documents show Americans for Tax Reform received upward of $1 million from cigarette companies between 1995 and 2000.

Patrick Gleason, a Norquist aide, didn't answer my question about whether Americans for Tax Reform still accepts tobacco money. I took that as a yes.

It's a close call whether tobacco is less popular than career politicians. But to tar the initiative, industry spokespeople write in the California voter guide that a "career politician" is promoting Proposition 29. That'd be former Senate President Pro Tem Don Perata.

Perata had his difficulties; he faced a federal criminal investigation during his time in the Senate, though no one was charged. Now 67, having survived prostate cancer, Perata sees Proposition 29 as a part of his legacy.

"No, no, no," Perata said, when I asked if he plans to seek a paid job within the bureaucracy the initiative would create. But he'd happily take an unpaid slot on the board "to make sure it gets launched correctly."

I'll be surprised if he gets the chance. People who might ordinarily support the tax hike won't have much reason to go to the polls in June. Many will find reasons to vote against it, courtesy of tobacco-funded ads. The $441 million fund for research is one reason to vote for Proposition 29, so long as the money stays in California. If that's not reason enough, here's another: The tobacco industry doesn't want it.

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