More than 200,000 Californians are going to quit smoking rather than pay the new higher tax on tobacco products, state fiscal analysts are predicting.
Proposition 99, approved by voters last November, raises the excise tax on cigarettes from the current 10 cents a pack to 35 cents, and on other tobacco products by about 40 percent.The initiative, which went into effect Sunday, is expected to raise about $600 million a year, money earmarked for medical and environmental programs to be be determined by the legislature and the governor.
At least a fifth of the money will be used to educate children on the dangers of smoking and for programs to reduce smoking.
Some retailers and wholesalers reported that cigarette sales were up last week, apparently because smokers stockpiled the product before the new tax went into effect.
State analysts believe there will be an 8 percent overall reduction - or 160 million fewer packs sold in the state - during the upcoming year because of the new tax.
The reduction will not come from smokers smoking less but from some smokers quitting altogether, according to Dan Rabovski, a revenue and taxation expert with state legislative analyst's office, who cited studies on the impact of previous price increases on cigarettes.
If an average California smoker puffs two packs a day, an 8 percent reduction would mean that 228,000 smokers are going to quit this year in California.
Californians already smoke less than residents of other states, according to a recent California Health Care Poll.
The statewide public opinion poll found that 26 percent of the state's residents smoked, compared with a national average of 37 percent.
Also, the poll found, of those Californians who do smoke, 45 percent said they had tried to quit within the past year. The survey was taken before the passage of Proposition 99.
Under the terms of the initiative, 20 percent of the revenue collected through the tax increase must be spent on "programs for the prevention and reduction of tobacco use, primarily among children, through school and community health education programs."
The initiative requires that 35 percent of the money be deposited in a "hospital services" account to pay for the treatment of patients who cannot afford medical care. The care is not limited to medical conditions resulting from tobacco use.
Ten percent of the money will be used to pay doctors treating patients who cannot afford to pay, 5 percent must be used for research into tobacco-related diseases, and 5 percent for various park and wildlife projects.
The remaining 25 percent may be used for any of the other medical or environmental purposes already receiving a portion of the revenue.
Gov. George Deukmejian's budget proposal for the 1989-90 fiscal year will include proposals for spending the $600 million expected to be raised during that fiscal year, according to his staff.
The spending plan, to be made public Jan. 9, also suggests appropriations for the $300 million expected to be raised during the last half of the current fiscal year, which ends June 30.
The governor, who does not smoke, opposed the initiative because he said he was opposed to any increase in taxes.