Alan Young, Staff Writer
Sacramento Business Journal
August 22, 2016
Two large business organizations in San Francisco and Los Angeles are backing a tax measure that will appear on the November ballot that would hike the cost of cigarettes by $2 a pack.
Their endorsements may not make a difference, however, as tobacco companies and other opposing business groups have outspent backers of the initiative by more than two-to-one so far.
The Bay Area Council and the Los Angeles County Business Federation, which together represent thousands of companies in California, defend the proposed tax as a way to lower health care costs on businesses and improve worker productivity by reducing sick days due to tobacco-related illness.
The “Yes on Prop. 56” coalition, which is largely made up of health care groups like the American Lung Association, could certainly benefit from an injection of business-backed campaign cash.
So far, tax supporters have raised $17 million, compared to $35.5 million raised in opposition, with much of the latter spending coming from Philip Morris USA Inc. and R.J. Reynolds Tobacco Co., according to state records.
Tracy Hernandez, CEO of the Los Angeles County Business Federation, an umbrella group of business associations that represents a combined 325,000 employers in the county, said her members would likely contribute to the “Yes on Prop. 56” campaign, although she couldn’t estimates spending levels.
“Lots of stakeholders came together and said we need to support this. The next step will be figuring out how we get engaged,” she said.
The Business Federation also represents multiple health care providers that have a direct financial stake in the outcome of the measure, Hernandez noted. Proceeds raised from the tax would go toward health care.
The Sacramento Metro Chamber of Commerce has not taken a position on Proposition 56, nor have other large Sacramento-area business groups.
Opposition to the measure includes the Sacramento Taxpayers Association and multiple statewide business organizations headquartered in Sacramento, including the California Retailers Association and the California Manufacturers and Technology Association.
Proposition 56 would also raise the tax on electronic cigarettes.
Similar measures to raise taxes on cigarettes failed in 2006 and 2012.
