Tobacco Tax

Ballot Summary
Adds $2.60 per pack to the state tax on cigarettes and indirectly increases the tax on other tobacco products. Revenues would fund hospital emergency services, children's health insurance, and other health programs. Exempts recipient hospitals from antitrust laws in some circumstances. Fiscal Impact: Increase in state tax revenues of about $2.1 billion a year by 2007-08, declining slightly thereafter. Unknown net state costs that could reach the low hundreds of millions annually after a few years. Unknown but potentially large savings to county, state, and local governments over time.

Outcome: Prop. 86 received 48.3 percent of the vote, thus losing by a slim 3.4 percentage points. Had it passed, smokers would have faced a tax increase of $2.60 per pack of cigarettes. Other tobacco users would also have seen a tax increase. Funds from the tax would have supported various health programs.