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Philip Morris Targets California Cigarette Tax Measure

Supporters of a proposed $1-per-pack tax on cigarettes argue lives and billions of dollars could be saved by the ballot measure. But they are being outspent by a cigarette company that has mobilized to fight the campaign.

Backers of the California Cancer Research Campaign briefed lawmakers and staff last week, unveiling research showing that the ballot measure, if passed, could cut state health spending and the burden of cigarette-related illness.

The measure could raise $855 million in its first full year, with about half the funding going to cancer research and the rest to campaigns to cut discount cigarettes use and prevent illegal cigarette sales, according to the nonpartisan [PDF] Legislative Analyst's Office. Voters could get a chance to cast ballots on the measure [PDF] next year, or as soon as June if Gov. Jerry Brown succeeds in getting a special election set to extend some taxes.

University of California researchers predict the cigarette tax could lead to an 11 percent decline in the number of smokers in the state, studies show. Without the measure, the current smoking cigarettes rate of 12.9 percent could rise by 9 percent by 2016, researchers say.

The measure might save the lives of 4,174 Californians between 2012 and 2016, researchers concluded. Health cost savings might range from $3.3 to $28.2 billion, they said.

Researchers warn that cuts in California smoking cigarettes and lung cancer rates may begin to reverse if smoking cigarettes prevention efforts don't see sustained support.

The findings add a dollars-and-cents argument in favor of the ballot measure that already has the support of sports icon and cancer survivor Lance Armstrong and former California Senate Pro Tem and cancer survivor Don Perata, who is co-chairing the ballot committee with Armstrong.

Working against the measure is a group called Taxpayers Against Out-of-Control Spending, which is almost solely funded by the Altria Group, which owns the Philip Morris cigarette company.

The group's website lists other supporters and says "we all believe cancer research is important." But the group criticizes the per-pack tax, citing concerns about funds being spent out of state and accountability to taxpayers.

David Sutton, a spokesman for Altria, wrote in an e-mail that "we oppose additional targeted taxes on cigarettes" and funded the group to "evaluate our options regarding this measure."

During the first three months of this year, opponents outspent supporters by more than a 2-to-1 margin. Altria spent $1.2 million, far more than the supporters' $424,000.

Cigarette-maker money went to pollsters, campaign consultants and a prominent political attorney.

Also working against the measure is a current raid on other funds derived from cigarette taxes. Motivated by the deep budget shortfall, Gov. Brown is dipping into $1 billion in Proposition 10 funds, which taxpayers approved in a 1998 ballot measure meant for early childhood education and health programs. The budget raid wipes out about half of county funds for such efforts.

Rhys Williams, a spokesman for the California Cancer Research Act campaign, said supporters "would oppose" any effort to move the funds to solve state budget crises.

"The ultimate goal of CCRA is to end smoking cigarettes so at some point in the future we hope we don't get any revenue from CCRA, because no one's smoking cigarettes anymore," Williams said.

The legislative analyst raises another point that quashes one favorable financial argument: While some health costs may be saved in the short term, the state may pay more for long-term care if people live longer. The state analyst office did not account for the intangible benefits or boost in productivity related to Californians living longer, healthier lives.

California has among the lowest smoking cigarettes rates in the U.S. at 12.9 percent, compared to the highest rates of 25 percent in Kentucky and West Virginia, according to 2009 Centers for Disease Control data. The added tax is expected to increase cigarette prices to about $6 to $7 per pack, depending on the brand and vendor.

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