Tobacco Companies Spend $55 Million to Fight Calif. Ballot Measure

Reynolds American Inc. and Philip Morris USA have spent at least $55 million in an attempt to defeat a California ballot proposal that would raise taxes on cigarettes by $2.60 per pack, the Wall Street Journal reported Oct. 10.

Industry-funded ads accuse the backers of the California tax increase -- which includes an association of hospitals -- of self-interest, since the revenues from the tax would go toward health programs. California is just one of several states where tobacco companies are aggressively fighting against tax increases and public-smoking bans.

California is a huge market for cigarette companies, which are following a familiar pattern of corporations spending big bucks in the state to fight ballot questions. In 2005, for example, the pharmaceutical industry spent $73 million to defeat a California prescription-drug discount plan.

Cigarette companies have outspent supporters of the California tobacco tax by a 3-to-1 margin. Big Tobacco also is spending millions fighting ballot measures in Missouri, Arizona, South Dakota, and Ohio. That's a big change from recent history, when the industry did little to oppose past tax hikes in Missouri, Arizona, and Florida.

"In the last political round, the tobacco giants basically conceded the issue," said Dan Smith, a University of Florida political-science professor. "I think they've decided to make a last stand. These proposals are going to keep coming if they're not knocked down."

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