SACRAMENTO -- In what is quickly turning into another high-stakes policy battle to be decided by California voters, tobacco giants Philip Morris and R.J. Reynolds are forking over tens of millions of dollars to defeat a new tobacco tax on the June ballot.
Proposition 29, which would boost taxes by $1 a pack of cigarettes to $1.87, would raise about $735 million annually, most of which would go toward cancer research.
It would also mean a $1 billion annual loss in California sales to the tobacco industry because the extra buck a pack will cause more people to quit smoking or not start in the first place, experts say. But tobacco companies plan to keep a low profile during the no-on-29 campaign, hoping their anti-tax allies can win the battle for them by appealing to anti-tax sentiments -- rather than trying to garner sympathy for an unpopular industry.
"I don't think it's a secret that tobacco is funding this," said Joel Fox, president of the Small Business Action Committee and a member of the coalition opposing Proposition 29, Californians Against Out of Control Taxes and Spending. "But if the tobacco folks are out there, everybody wants to say the evil tobacco companies are behind this. But there are important policy issues that have to be discussed, and it's not surprising that taxpayer groups are out front talking about this."
What does the tobacco industry have to say?
Apparently nothing. When this newspaper asked the no-on-29 campaign for a tobaccoindustry representative to give the industry's take on the issue, the anti-tax coalition wouldn't provide one.
The coalition has already begun airing radio and television advertisements targeting what it believes is a vulnerability in the initiative: a provision that allows out-of-state organizations to bid on research dollars.
In the ads, Dr. LaDonna Porter, a Sacramento-area physician who starred in anti-tobacco-tax campaign ads in 2006, depicts the measure as a ballot-box boondoggle that would create "a huge new research bureaucracy with no accountability run by political appointees who can spend our tax dollars out of state."
Health care advocates say the criticism is a smoke screen for the opposition's true motive: to protect the tobacco industry's market in California. They insist that virtually all the research dollars would be spent in California but that they wanted to keep the bidding process open to avoid accusations of cronyism.
Proponents also contend that of the $1 billion the tobacco industry would lose in sales if voters approve Proposition 29, $800 million would be profits that would have gone out of state to R.J. Reynolds' base in North Carolina and Philip Morris' in Virginia. Proponents predict that California's smoking rate would gradually be reduced from 12 percent of the population to 8.5 percent if the initiative passes.
Big tobacco firms have a "real strong economic motivation to spend what it takes," said Stanton Glantz, a UC San Francisco professor of medicine who wrote "Tobacco War, Inside the California Battles."
"Even if they spend $100 million, that's one-tenth of what they'll lose every year," he said. "These companies will do everything humanly possible to kill this. They might lose because the public rejects them, but they're not going to lose this because they were cheap."
Tobacco companies have poured $21 million into this year's campaign so far -- $8.9 million in the past month alone -- and could wind up surpassing the $66 million they spent in 2006 to defeat another tobacco tax-hike proposal.
How much they spend may depend on whether they can move voters in coming polls with the barrage of ads that have only just begun. An early March survey by the Public Policy Institute of California showed 67 percent of likely voters in support of the tobacco tax initiative.
The health groups spearheading the initiative -- the American Cancer Society, the American Heart Association and others -- have raised $2.5 million, $1.5 million from the foundation of cyclist and cancer survivor Lance Armstrong, who is co-heading the effort with former state Senate leader Don Perata, also a cancer survivor.
Heavy spending to persuade voters to reject a ballot measure is typically effective because voters are already inclined to vote no on initiatives, said Tracy Westen, CEO of the Center for Governmental Studies in Los Angeles. But, he said, it's tougher to defeat initiatives when voters are knowledgeable about the issues -- and tobacco campaigns have a steeper climb.
"Generally, Californians tend to oppose smoking and support restrictions, so the cigarette industry will have to spend their advertising budget talking about other issues," Westen said.
Well-endowed campaigns run by big industrial interests often succeed by the sheer volume of advertising. But Proposition 29 supporters are pinning their hopes on the fact that California voters have shown an ability to reject corporate advances, which are often machine-like in their highly sophisticated, poll-tested campaigns -- much like their product advertising.
Two years ago, voters turned down initiatives sponsored by PG&E and Mercury Insurance despite their lopsided funding advantages. In 1988, California's voters were also the first in the nation to pass a tobacco tax. And they approved another one 10 years later, despite massive expenditures by the tobacco industry.
Still, it has been 14 years since Californians approved a tobacco tax. Four years ago, voters rejected, on a 52 to 48 percent vote, a $2.65-per-pack increase after tobacco companies poured $66 million into the opposition campaign.
