Capitol Alert

Tom Steyer spending for California cigarette tax

Tom Steyer in San Francisco, Feb. 13, 2014.
Tom Steyer in San Francisco, Feb. 13, 2014. NYT

The latest campaign to raise California’s cigarette tax will reach into some deep pockets.

A formidable and well-funded coalition of California labor and medical groups on Wednesday filed a health care-funding tobacco tax ballot initiative with a flourish, revealing that environmentalist mega-donor Tom Steyer had pledged to contribute some of his fortune to the campaign.

“The whole idea of justice for Californians is all over the place, and it isn’t just energy and climate,” Steyer said in an interview, calling the cause “irresistible.”

Health care groups have mounted a sustained campaign to increase the reimbursement rate for doctors who see patients on the low-income insurance program Medi-Cal, arguing that the current level is prompting doctors to drop out of the program and reducing access for patients. They sought a bill this year that would levy a cigarette tax to pay for a Medi-Cal bump but warned that, should lawmakers fail to act, they would go to the ballot. Now they’ve made good on that promise.

“Tobacco taxes have been very, very effective in deterring smoking and saving lives, so for us it’s a win-win,” said Dustin Corcoran, CEO of the California Medical Association, adding that tobacco companies “certainly cause their share of disease and health care conditions that need to be treated, so I think it’s appropriate to hold them accountable and ask them to pay their fair share.”

The initiative would impose a $2-a-pack tax that would largely fund Medi-Cal. It would also tax electronic cigarettes, products that typically heat nicotine-laced into a fine vapor. Health advocates have pushed to regulate e-cigarettes as tobacco products, pointing to the exploding popularity of “vaping” among teenagers.

It supplants previous tobacco tax initiatives filed by the same coalition, with new language sending more money to oral health programs and clarifying that smoking cessation products would not be taxed.

Should the measure get enough signatures to make the ballot, tobacco companies could spend tens of millions of dollars to extinguish it, as they did last time with Proposition 29. For this initiative, opponents will have to contend with Steyer’s money and the fundraising prowess of the California Medical Association, SEIU California and other backers.

A spokesman for Altria said the company was reviewing the proposal. Cynthia Cabrera of the Smoke-Free Alternatives Trade Association, an e-cigarette industry group, said members planned to combat the initiative but were still debating their strategy.

“Keeping (e-cigarettes) reasonably priced is important to incentivize adult smokers so they switch over,” said Cabrera, the organization’s executive director. “From a public health perspective we should be promoting all kinds of action to encourage people to move toward this product.”

Steyer has deployed his wealth to back environmentally friendly candidates and causes around the country. In 2012, he spent nearly $30 million championing Proposition 39, which changed how corporations calculate their tax burdens and channeled the extra revenue toward energy efficiency upgrades, and in 2010, he spent $5 million beating back a challenge to California’s cap-and-trade program. Earlier this year, he floated the idea of funding an oil extraction tax initiative, though he said on Wednesday he hasn’t made any decisions about potential 2016 campaigns other than the cigarette tax push.

On Wednesday, as Gov. Jerry Brown celebrated signing an ambitious climate bill ensuring California will derive half its energy from renewable sources, Steyer reported having spent $1.6 million waging a public relations war supporting Senate Bill 350. That money was not enough to overcome an oil industry blitz that led Brown and allies to abandon a provision to cut California’s oil and gas use in half.

“This is not the first time that we will be going against an industry that has virtually unlimited money,” Steyer said of the tobacco tax campaign, but “we actually are standing up for what Californians know is right.”

Jeremy B. White: 916-326-5543, @CapitolAlert