SAN DIEGO (AP) — A California ballot measure that would increase taxes on cigarettes by $2 a pack and start taxing electronic cigarettes was leading in early returns Tuesday.
Proposition 56 was ahead with 63 percent of the vote in favor out of more than 4.5 million ballots counted.
The measure calls for adding $2 to the current 87-cents-a-pack state tax on cigarettes. It would also start taxing e-cigarettes, including vapor products.
The state has not passed tobacco taxes since 1998. If Proposition 56 is approved California would be one of only about a half dozen states that tax e-cigarettes.
Tobacco companies contributed more than $71 million to defeat the measure, saying it would simply benefit insurance companies and hospital corporations. Supporters of the initiative raised more than $34 million.
Proposition 56 calls for much of the increased revenue to go to California’s Medi-Cal. The state-run program pays insurance providers and hospitals for costs of treating low-income residents.
The revenue would also fund anti-smoking campaigns and medical research.
The tobacco industry — one of the biggest spenders in a record year of initiative fundraising in the state — was criticized for misleading voters.
The San Jose Mercury News said opponents ran “a supremely sleazy advertising campaign designed to kill Proposition 56” by claiming it would take money from schools and give it to greedy insurance companies.
California’s legislative analyst and the state’s finance director say Proposition 56 could raise as much as $1.4 billion in state revenue by the 2017-2018 fiscal year.
No on 56 coalition spokeswoman Beth Miller said the vast majority of the $1.4 billion would go toward hospitals and health insurance providers contracting with the state for Medi-Cal.
The measure was backed by billionaire environmentalist Tom Steyer, medical groups and educators, and former New York City Mayor Michael Bloomberg, who also supported an attempt to raise tobacco taxes in 2012 that was narrowly defeated amid big spending by tobacco interests.
Proponents of the measure note that California and Hawaii recently increased the legal age to purchase tobacco or e-cigarettes to 21.
However, California ranks 37th in the country on per-pack taxes, according to Campaign for Tobacco-Free Kids, an advocacy group.
E-cigarettes heat liquid nicotine into a vapor, delivering the chemical that smokers crave without by-products generated from burning tobacco. Proponents say e-cigarettes are a potentially useful tool to help smokers — a benefit that could be threatened if the products are taxed.
This story has been corrected to show that California would become one of only about a half dozen states that tax e-cigarettes, not that it would become the fifth state.