We the People — Part 7

“Democracy: The state of affairs in which you consent to having your pocket picked, and elect the best man to do it.  ~Benjamin Lichtenberg

By Alden Benton

Tobacco use has a long history.  It has grown wild in the Americas for over 8,000 years.  When Christopher Columbus brought tobacco to Europe, tobacco use grew quickly.  Discussions about the issues surrounding tobacco use have continued for centuries.

Proposition 56 asks voters to increase taxes on tobacco products consumed by the public, including e-cigarettes.

Beginning next year, Proposition 56 increases the tax on cigarettes $2 to $2.87 per pack.  Current law requires the tax on other tobacco products to increase as taxes on cigarettes increase.  Therefore, Proposition 56 also increases taxes on other tobacco products by $2 to $3.37.

This measure also redefines what “other tobacco products” are to include e-cigarettes that contain nicotine or liquid containing nicotine.

This measure will generate between $1.27 billion and $1.61 billion in 2017.  Revenues will decline if tobacco sales decline as anticipated. 

Proposition 56 excludes the revenues it generates from being counted as part of the general fund.  The amount in the general fund is the basis for calculating the minimum level of state school funding.

Of the anticipated revenue, between $200 million and $230 million will to replace sales tax and tobacco fund money lost from decreased tobacco sales.

The California Board of Equalization (BOE) receives up to 5% of Proposition 56 revenue to administer the implementation of this measure.  In 2017, the estimated administrative cost ranges from $50 million to $70 million.

Proposition 56 allocates fixed annual amounts for specific purposes.  In 2017, this measure allocates $48 million for enforcement.  Additionally, the University of California will receive $40 million annually for physician training programs and the California Department of Public Health receives $30 million annually for the state dental program.

At least every other year the state auditor must audit the agencies receiving the funds raised by Proposition 56 to ensure the funds are properly used.  This measure requires posting the results of these audits on the internet.  The state auditor will receive $400,000 to perform these audits.

Proposition 56 creates the Healthcare Treatment Fund (HTC).  Only facilities licensed by the state may receive money from this fund.

After making the required distributions, the remaining funds go into the HTC.  Medi-Cal receives 82 per cent of these funds to increase payments for healthcare services.  The 2017 estimates for Medi-Cal funding are between $710 million and $1 billion.

The California Tobacco Control Program receives 11 per cent of the HTC.  The Tobacco Control Program, operated by the Department of Public Health, is a variety of prevention and control programs aimed at reducing illness and death from tobacco-related diseases.  In 2017, these programs will receive between $100 million and $130 million.

Five per cent of the remaining funds go to the University of California Tobacco-Related Disease Program.  This program conducts medical research on prevention, early detection, treatments, and potential cures of all types of cancers, cardiovascular and lung diseases, and other tobacco-related diseases.  This program will receive an estimated $40 million to $60 million dollars in 2017 from this measure.

The California Department of Education will receive 2 per cent of the remaining funds generated by this measure to fund school programs to prevent and reduce the use of tobacco products by young people.  In 2017, these programs will receive $20 million from Proposition 56 revenue.


“When I was young, I kissed my first woman and smoked my first cigarette on the same day.  Believe me, never since have I wasted any more time on tobacco.”
~Arturo Toscanini

© 2016 A. L. Benton/Independence Creek Enterprises
All Rights Reserved
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