Editorial Board Memo: California Leaders Should Increase Tobacco Tax by $1.50, Earmark 20 Cents for California Tobacco Control Program

5/2/2003

From: Paul Knepprath of the American Lung Association of California, 916-442-4446, ext. 13

WASHINGTON, May 2 -- The following is a memorandum on the California tobacco tax:

Memorandum To Editorial Boards

From: American Cancer Society, American Heart Association and American Lung Association of California

Re: California leaders should increase the tobacco tax by $1.50 and earmark 20 cents for the California Tobacco Control Program -- It's a Win-Win-Win budget solution

California's leaders face difficult policy decisions to close a record budget shortfall and protect essential state services. We believe that one policy decision stands out as a relatively easy choice because it would significantly improve both the fiscal health of California and the health of Californians. This policy is to increase the tobacco tax by $1.50 per pack and dedicate 20 cents of this increase to fund the California Tobacco Control Program, our state's highly successful tobacco prevention and cessation effort.

In addition to its fiscal and health benefits, this proposal is supported by two-thirds of California voters, according to a recent poll. While some in the Legislature have expressed opposition to any tax increase, we hope they will take a second look at our proposal and conclude that this tax increase is different and deserving of support. A tobacco tax increase with an earmark for anti-smoking programs has significantly greater benefits and significantly greater public support than other tax proposals.

We urge you to use your editorial voice to call on policymakers to adopt this plan.

The plan has the strong endorsement of the major public health groups, including the American Cancer Society, the American Heart Association, the American Lung Association of California, Americans for Nonsmokers' Rights, the Campaign for Tobacco-Free Kids and Next Generation California Tobacco Control Alliance. Increasing the cigarette tax, with 20 cents earmarked for anti-tobacco programs, would be a win-win-win for California and its taxpayers.

-- It will improve health by preventing kids from starting to smoke and helping smokers to quit. As California's own example has shown, effective anti-smoking efforts should include both a tobacco tax increase and well-funded, sustained tobacco prevention and cessation programs.

-- It will raise more than a billion dollars in much-needed revenue to balance the state budget and protect vital services, such as education, health care and law enforcement.

-- It will save taxpayers money by reducing smoking-caused medical costs, which total $8.6 billion a year in California, including $3.7 billion paid by government health care programs. Skyrocketing medical costs are a major contributor to the budget deficit, so it makes more sense than ever to reduce the costly heart attacks and lung cancer treatments caused by smoking.

In addition, our proposal would fund the Tobacco Control Program without taking a single penny from any other program in the Governor's budget.

Our plan is also fair. If we tax smokers more, it is only fair that a portion of the tobacco tax be used to fund programs to help smokers quit and to prevent kids from starting in the first place.

An earmarked tobacco tax has worked everywhere it has been tried, first here in California and then in other states across the country that followed our pioneering anti-tobacco efforts. Every state that has increased its tobacco tax and funded effective prevention and cessation programs has raised significant new revenue even while reducing smoking.

Since 1988, when Californians approved Proposition 99 to increase the tobacco tax and earmark a portion of the funds for the Tobacco Control Program, cigarette consumption has declined by more than 60 percent. In 2002, only 16.6 percent of California adults still smoked, compared to about 23 percent nationally. Smoking rates among California eighth graders are 40 percent lower than the national rate, while smoking among our twelfth graders is 14 percent lower. Most important, California's anti-smoking efforts have saved tens of thousands of lives by reducing smoking-caused lung cancer and heart attacks, according to studies. And the program has been extremely cost effective, saving more than three dollars in direct health care costs for every dollar spent.

The tobacco companies, some of which recently sued the California Tobacco Control Program, are working hard to defeat these policies. The industry would like nothing more than for policymakers to cut or eliminate funding for effective anti-smoking programs. But now would be the worst time to give in to the industry. While funding for the Tobacco Control Program has been declining, the tobacco industry is spending more than ever -- about $1.2 billion a year -- to market its deadly products in California. When the Tobacco Control Program started in 1990, the ratio of tobacco marketing expenditures to anti-smoking program spending was about three to one. Today, that ratio is more than thirteen to one.

If the California Tobacco Control Program doesn't get more funding and become more competitive with the tobacco industry, smoking rates will surely rise again. That is why the state's Tobacco Education and Research Oversight Committee has recommended that $200 million from any tobacco tax increase -- about 20 cents per pack -- be allocated to reinvigorate the program. This expert committee's recommendation is the basis of our proposal.

To counter the tobacco industry, it is important that we have both a tobacco tax increase and effective tobacco prevention and cessation programs. While a tax increase can be effective on its own, the industry has ways to undermine its impact, mainly through price discounting. Combining the two policies, as we are proposing, will greatly accelerate the declines in smoking, save more lives, and achieve dramatic cost savings to the state. According to the Center for Tobacco Control Research and Education, University of California, San Francisco, the combination of the price increase and a reinvigorated Tobacco Control Program would have the following benefits:

-- 640,000 California smokers would be spurred to quit.

-- In its first year, this plan would prevent 270 deaths by cardiovascular disease, 440 low-birth-weight births, 580 new cases of childhood asthma, and 20 cases of Sudden Infant Death Syndrome. It would save about $33 million in direct medical costs.

-- Over the long term, this plan each year would prevent about 6,900 smoking-caused deaths from cancer, cardiovascular disease and lung disease. It would save about $2.62 billion annually in medical costs.

We hope you will editorialize in support of our proposal.