Cigarette tax proposition drawing business opposition: amount called steep; allocation questioned.

The way Providence Holy Cross Medical Center Chief Administrator Kerry Carmody sees it, Proposition 86--a measure on the Nov. 7 ballot to almost triple the tax on cigarettes to fund, among other things, emergency care--will benefit everyone, smokers and non-smokers.

"It's a user tax," he said. "If people don't smoke, they won't feel it other than they'll potentially have better coverage in the emergency room when they show up for care, which is where this money is designated to go to."

If passed, the measure would apply an additional tax of $2.60-per-pack on cigarettes to pay for health insurance for children, emergency care and anti-smoking programs.

The new tax, which would take effect Jan. 1 and bring the total tax on cigarettes to $3.47 per pack, is expected to generate $2.1 billion annually.

But a look at the proposition shows that the vast majority of funds outlined in the measure will actually go towards funding hospitals and health programs not directly related to either treating the medical affects of smoking or preventing the habit.

About 52 percent of the cash--or $1.02 billion per year--will be divvied up to pay for health treatment and services, of which $756 million will pay for hospital emergency and trauma care, $91 million for nursing education programs and $58 million for nonprofit clinics.

Only 1.75 percent--$18 million--will fund tobacco cessation services, according to a July breakdown of the proposition by the Legislative Analyst's Office.

About $810 million of the money generated from the tax will go towards another category for health programs and health insurance, but only about 21 percent--$171 million--will fund programs directly related to smoking.

Five percent of the total fund will pay for health and disease research, about $95 million, with the remaining $180 million backfilling the California Children and Families First Trust Fund.

That type of disparity is one of the major reasons Proposition 86 has drawn criticism.

Some think the measure forces smokers--who make up just 14 percent of the population in California--to unfairly pay for the care of others.

Some business groups and chambers of commerce also worry the new tax will decrease how many packs are sold.

"We feel it will be overly burdensome to consumers. It's so excessive," said Gary Olson, executive director of the Burbank Chamber of Commerce, which opposes Prop. 86.

"It's not that we're advocates for smoking, don't get me wrong," said Olson, who is a non-smoker. "We just think the amount is pretty steep."

Others in opposition include the Thousand Oaks-Westlake Village Regional Chamber of Commerce, Woodland Hills Chamber of Commerce and United Chambers of Commerce of the San Fernando Valley.

It is also causing concern from hospital officials who say voters may see the proposition as a one-time solution to a complex problem.

"My concern is that if Prop. 86 passes, then the public says, 'We just took care of the hospital problem," said Albert L. Greene, president and CEO of Valley Presbyterian Hospital in Van Nuys. "Prop. 86 is not an entire fix."

By CHRIS COATES

Staff Reporter