On June 5, 2012, Californians will go to the polls and on the election ballot will be a question known as Proposition 29, the California Cancer Research Act, which, if passed, would raise taxes by $735 million per year to create a new state bureaucracy that will be overseen by political appointees. The $735 million would result from a $1 per pack increase in California's cigarette tax.
Moreover, since California's tax on other tobacco products is tied to the state's cigarette tax rate, a higher California cigarette tax would translate into higher OTP tax rates as well. All California tobacco-related business owners, their employees and customers need to vote "NO" on Proposition 29 on June 5.
A new nine-member commission including six political appointees would control the annual $735 million in tax money raised under the California Cancer Research Act. This commission would operate without oversight from voters, the executive branch or the legislative branches of California's state government.
Only 20% of the new tax money would be spent on smoking cessation and tobacco prevention, while 15% can be used to purchase buildings and equipment, and over $15 million a year can be spent on overhead and administration, including excessive salaries and pensions. This $15 million in administrative costs would include spending on consultants, travel, conventions, pensions and other overhead expenses. The tax revenue raised could be spent outside of California and will not be used to reduce the state's current $10 billion budget deficit.
This higher cigarette tax could increase cigarette smuggling and other contraband activities in California. With cigarettes being higher priced due to the tax increase, theft of cigarettes in stores may also increase putting the safety of store personnel at risk.
California already faces a significant amount of contraband trafficking in cigarettes and a $10 per carton tax increase is likely to increase this kind of illegal behavior to the detriment of law-abiding tobacco retailers.
NATO opposes Proposition 29 and urges all tobacco retailers and tobacco wholesalers in California, including NATO members, to ensure that they mark their calendars with a reminder to vote "NO" on Proposition 29 on June 5. To learn more about the impact of Proposition 29 and why tobacco retailers, tobacco wholesalers and consumers should vote "NO" on Proposition 29, please visit www.NoOn29.com. Also, if you are a tobacco retailer and need a special kit with information to display in your store about opposing Proposition 29, NATO can send a store kit to you. Please submit your request for a store kit to firstname.lastname@example.org.