A push for higher excise taxes on buy cigarette online will be tested once again by a ballot initiative in California.

Proposition 29, which is on the June 5 presidential-primary ballot, would raise the state's excise tax on discount cigarettes by $1, making it $1.87 per pack.

The proposition is pivotal to cigarettes for sale companies, given that Californians are responsible for about 6.6 percent of the cigarette and snuff volume consumption in the United States. The impact of the increase on companies' bottom lines would be comparable to a 7-cent cigarette tax increase nationwide.

Proponents of the California Cancer Research Act say the tax would raise $855 million annually for health care research focused on cancer and tobacco-related diseases, including heart disease, and spending on smoking cigarettes-cessation initiatives.

Opponents, including R.J. Reynolds Tobacco Co. and Philip Morris USA, say the proposition is flawed because the money raised is not guaranteed to be spent in California and it will not go toward reducing the state's budget deficit, which is more than $10 billion.

"At a time when California continues to face enormous economic challenges, and critically needed programs like education and public safety struggle for funding, we should not be starting another autopilot government spending program," said Teresa Casazza, president of the California Taxpayers Association.

The challenge is daunting for Prop 29 supporters, given that California voters have turned down all 14 attempts to pass an excise-tax increase. The last try was in November 2006, when voters rejected 52 percent to 48 percent raising the excise tax by $2.60 a pack.

Supporters believe the lower tax-increase target could sway voters this time.

The 2006 ballot initiative was one of the most intensely fought campaigns.

Reynolds and Philip Morris, along with committees connected to the manufacturers, spent about $65 million on advertising to defeat Proposition 86. Reynolds spent about $40 million altogether in 2006 to fight or support cheap cigarettes initiatives.

Supporters spent about $13 million, according to anti-smoking cigarettes advocacy groups.

By comparison, with more than three months left in the 2012 campaign, the spending has been significantly lower.

Philip Morris and its affiliates had spent about $2.6 million as of Feb. 12; Reynolds has not disclosed its campaign spending. Officials with the Lance Armstrong Foundation said Feb. 15 that the organization would give $1.5 million to support Prop 29.

John Matsusaka, president of the Initiative & Referendum Institute at the University of Southern California, said the manufacturers drove home the point in 2006 that they will spend whatever it takes to defeat cigarette-tax initiatives they target.

That said, Matsusaka added that he is surprised there has been such a small amount of marketing on Prop 29.

"I suppose there is still a fair amount of time before the election, but I don't see the signs of a big run-up coming," he said.

Reynolds is contributing to Californians against Out-Of-Control Taxes and Spending, which includes taxpayers, labor, small businesses and law enforcement among its more than 3,000 members.

"We will communicate the strong feeling of these partners about this flawed ballot measure," Reynolds spokesman David Howard said.

Christopher Growe, an analyst with Stifel Nicolaus, said that "while other excise-tax proposals are likely and possible, none are as threatening as California" because the industry is trying to offset lower demand with higher prices.

Reynolds has been a major benefactor of consumers buying more discount cigarettes, with its Pall Mall brand surging to the No. 3 market share nationwide.

"While the current political environment would indicate 2012 is likely to be a soft year for excise-tax increases, historical precedent, state budget shortfalls and current state excise-tax increase proposals already in place suggest this is very much a risk to the fundamental performance of the industry," Growe said.

Bill Godshall, executive director of SmokeFree Pennsylvania, said he thinks the $1-a-pack increase stands a "very good chance of passage" considering the narrow margin of defeat for Prop 86.

"Cigarette manufacturers, distributors and retailers — in collaboration with manufacturers — fight all proposed cigarette tax hikes," Godshall said.

"The greater the likelihood of passage — if proposed by a governor, if proposed by majority party leaders, if governor, state Senate and House are controlled by same party, if proposed in state budget legislation, if state is facing deficit, etc. — the more money Altria and Reynolds spend lobbying against it."

Godshall supports a lower excise-tax rate for smokeless discount cigarette online as incentive to smokers to try products he considers a reduced-risk alternative to cigarettes.

Some states are taking into account those potential harm differences in their tax-increase efforts, while other states propose raising smokeless tobacco excise taxes to the level of that on cigarettes.

"Altria and Reynolds lobby against proposed smokeless tobacco tax hikes in states," Godshall said.

"Altria also lobbies to change ad valorem tax rates — percentage of price — to per-weight tax rates (per ounce or per pound) since Altria's Skoal and Copenhagen snuff brands typically cost twice as much of Reynolds' Grizzly brand of snuff."

Missouri is the only state besides California where there's the possibility of a vote on a tobacco tax increase.

There's an effort to get an initiative on the November ballot that would raise Missouri's cigarette excise tax by 73 cents to 90 cents. The roll-your-own tax would go from 10 percent of the manufacturer's price to 35 percent, and the other tobacco products tax would go up to 25 percent of the manufacturer's price.

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