There are good reasons why CalPERS divested in tobacco companies years ago, and those reasons haven’t changed.
Reinvesting in tobacco would pit CalPERS’ portfolio against the financial and physical well-being of its members and other Californians. The tobacco industry inflicts more than $23 billion a year in health care and lost productivity costs upon Californians, including $3.5 billion in direct costs to California taxpayers to pay for treating tobacco-related diseases afflicting Medi-Cal patients.
The board of the California Public Employees’ Retirement System voted last month in favor of looking at whether it should lift its historic ban on tobacco investments. On Monday, it will reconsider that decision.
The American Cancer Society Cancer Action Network joined with the American Heart Association and the American Lung Association to send a letter last month imploring CalPERS to put the health of California’s kids above tobacco profits.
To study something that only perpetuates the death and disease caused by tobacco is contrary to the leadership California has shown. In 1988 voters enacted Proposition 99, a tobacco tax that helped fund a new state tobacco control program. In the first 20 years, the state invested $2 billion – and got a $134 billion return in health care savings, according to a UC San Francisco study.
Half of smokers can expect to die from their addiction. Smoking is the single leading cause of preventable death in this nation and in this state, robbing 40,000 Californians of their lives annually.
Without a doubt, the tobacco industry is maximizing profits by luring the next generation through electronic cigarette brands that offer more than 7,770 flavors. It is no surprise that the popularity of e-cigarettes among teens tripled from 2013 to 2014 since they are really nicotine starter kits. As the state Department of Public Health points out in its “Wake Up” campaign, teen e-cigarette users are three times more likely to smoke traditional cigarettes a year later.
The tobacco industry may be discovering new products to hook young people to nicotine, but that doesn’t mean we should finance its business model.
To have the pension fund for the state’s workers invest in tobacco is like having one arm of the state trying to put out a fire while having another proposing to throw gasoline on it.
We ask that CalPERS rescind its decision to study the issue and drop any idea of revisiting tobacco investments. CalPERS should continue its long-standing commitment to protect the public’s health and taxpayers’ money.
Jim Knox is vice president of government relations for the American Cancer Society Cancer Action Network, the society’s nonpartisan advocacy affiliate. He can be contacted at Jim.Knox@cancer.org.