Update November 8, 2006
Proposition 86 was rejected by 52.1% of voters.
Proposition 86 in Plain English
This proposition would add $2.60 in excise taxes to each pack of cigarettes purchased in the state of California. Monies would fund hospital emergency services, health insurance for children and new and existing health education activities. A combination of cigarette taxes already exists that total 87 cents per pack. Prop. 86 is estimated to bring in $2.1 billon per year.
Official Title and Summary
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.
Analysis
- Official Legislative Analysis, California Legislative Analyst’s Office (PDF)
- In Depth Nonpartisan Analysis, League of Women Voters Ca.
- MoneyWatch, healthvote.org
Articles
- Cigarette tax plan would insure kids, reimburse ER care. Tobacco firms call Prop. 86 a power grab by hospitals. San Francisco Chronicle
- Peter Schrag: Bad guys vs. ‘free’ goodies at the ballot box. Sacramento Bee
- Prop. 86: Cigarette taxes: No, Measure would dun smokers to fund a panoply of health-care special interests. Orange County Register
- Advocates disguise measure’s primary goal. San Diego Union-Tribune
- Tobacco and oil ballot issues draw big money. San Francisco Chronicle