TAX ON CIGARETTES.
INITIATIVE CONSTITUTIONAL AMENDMENT AND STATUTE.
- Imposes additional 13 cent tax on each cigarette distributed ($2.60 per pack), and indirectly increases tax on
other tobacco products.
- Provides funding to qualified hospitals for emergency services, nursing education and health insurance to
eligible children.
- Revenue also allocated to specified purposes including tobacco-use-prevention programs, enforcement of
tobacco-related laws, and research, prevention, treatment of various conditions including cancers (breast,
cervical, prostate, colorectal), heart disease, stroke, asthma and obesity.
- Exempts recipient hospitals from antitrust laws in certain circumstances.
- Revenue excluded from appropriation limits and minimum education funding (Proposition 98) calculations.
Summary of Legislative Analyst’s Estimate of Net State and Local Government Fiscal Impact:
- Increase in new state tobacco excise tax revenues of about $2.1 billion annually by 2007–08, declining slightly
annually thereafter. Those revenues would be spent for various health programs, children’s health coverage, and
tobacco-related programs.
- Unknown net state costs potentially exceeding $100 million annually after a few years due to provisions
simplifying state health program enrollment rules and creating a new pilot program for children’s health
coverage.
- Unknown, but potentially significant, savings to the state Medi-Cal Program and counties from a shift of
children from other health care coverage to the Healthy Families Program (HFP); potential state costs that could
be significant in the long term for ongoing support of expanded HFP enrollment.
- Unknown, but potentially significant, savings in state and local government public health care costs over time
due to various factors, including an expected reduction in consumption of tobacco products.
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