Term limits and a cigarette tax

Proposition 28 is California’s latest attempt to address the issue of term limits, at face value reducing the total amount of time a person may serve in the State Legislature from 14 years to 12 years.

However, it also replaces an earlier law—1990’s Proposition 140—that restricted legislators from spending more than six years in the Assembly and eight in the Senate. If Proposition 28 passes, legislators could spend all 12 years in either house—six two-year terms in the Assembly or three four-year terms in the Senate.

As it is, many lawmakers termed out of one house go on to run for the other house and end up serving 14 years.

Proposition 28 affects only future members of the State Legislature. Legislators first elected on or before June 5, 2012, would continue to be restricted by existing term limits.

Proponents of Prop. 28 claim the 1990 term-limits law isn’t working. Six years in the Assembly, they argue, isn’t sufficient time to learn the ropes, nor does it give Assembly leaders time to prepare for their jobs and carry them out. As a result, legislators become overly dependent on lobbyists and staffers, the only people who know how the system works.

Supporters include the California Chamber of Commerce, the California Democratic Party, California Teachers Association, and the League of Women Voters of California. Prop. 28’s largest contributor—with more than $600,000 contributed to the Yes on 28 fund—is the Los Angeles County Federation of Labor.

Those who oppose Prop. 28 claim it is a scam by special-interest groups to trick voters into weakening term limits, which they say have worked well at keeping legislators in check. They include California Tea Party Groups, the Humboldt County Republican Party, the Southern California Tax Revolt Coalition and the organization U.S. Term Limits.

The proposition has no immediate fiscal effect, but could dramatically change the composition of the state legislative bodies, thus having an effect on future decisions.

Proposition 29 would impose an additional 5-cent tax on every cigarette sold, which amounts to an extra dollar a pack, to be marked for cancer and other medical research and tobacco-cessation programs. The state’s current cigarette tax—as established by similar measures approved by voters in 1988 and 1998—is 87 cents per pack, so the new rate would more than double these excise taxes to $1.87 a pack.

The federal government also imposes an excise tax on cigarettes and other tobacco products, with a 62-cent-per-pack hike in 2009 raising the federal tax to a total of $1.01 per pack. Funds from the latest federal hike go to help fund the Children’s Health Insurance Program. Other state excise taxes are generally passed along to the consumer in the price of cigarettes nationwide, as well.

The American Cancer Society, American Heart Association and American Lung Association wrote Prop. 29 with the expressed intent to “save lives, stop kids from smoking, and fund cancer research.” The American Cancer Society has contributed nearly $5 million to the “Yes on 29” cause thus far, with the Lance Armstrong Federation contributing $1.5 million.

The two biggest opponents of Prop. 29 are R. J. Reynolds and Phillip Morris, the country’s two largest tobacco companies. Together they have contributed more than $30 million to defeat Prop. 29, and subsidiaries of these companies have given even more. They say Prop. 29 is flawed in that the $735 million in annual new revenues will not stay in California, and the measure creates more bureaucracy by duplicating existing programs.

Expenditures on this proposition thus far equal about $40 million from opponents and $8.5 million total in support of the action, a nearly 5-to-1 ratio. Political analysts have predicted that, by voting day, tobacco companies may spend as much as 16 times more money than the pro camp is able to raise.