California Tobacco Tax Fails by Less Than a Percentage Point

A closely-watched effort to impose a new tax on tobacco to pay for cancer research in the nation's most populous state has failed by less than a percentage point after remaining too close to call for more than two weeks. The measure failed by 50.3 percent to 49.7 with about 5 million votes cast, The Associated Press determined Friday. The measure was losing by about 27,000 votes with 150,000 ballots remaining to be counted; too few for the 'yes' side to pull ahead. Lighting up the airwaves with campaign ads, the tobacco industry was able to cut support for a $1-a-pack cigarette tax backed by cycling legend Lance Armstrong from a two-thirds majority in March to a dead heat on Election Day. 

Since the June 5 voting, Proposition 29 has seemed headed for defeat by razor-thin margins, generally trailing by less than a percentage point. Opponents of the measure, which would have used tax revenue to fund cancer research, raised $47 million to fight it, a large haul for even the most heated state races. By comparison, Jerry Brown spent about $36 million in his successful 2010 bid to become governor of California and Wisconsin Gov. Scott Walker and his allies spent $47 million to beat back his recall challenge. Mr. Armstrong and a coalition of anti-smoking groups raised about $12 million to bolster the measure. New York City Mayor Michael Bloomberg made headlines when he kicked in $500,000 to help offset donations opposing the measure from tobacco companies. Chris Lehman, campaign manager for the coalition supporting the tax, said the groups are conceding defeat.

"It's mathematically pretty tough" to expect a last-minute victory though thousands of votes have yet to be counted, he said. Doug Ulman, chief executive of the Lance Armstrong Foundation called the defeat "a genuine tragedy." "With 100,000 votes still left to be counted, we are obviously encouraged with the way things are going, but we are going to wait until every last vote is counted," said Beth Miller, a spokeswoman for the opposition campaign. While raising the price of tobacco has been shown to reduce smoking rates, especially in young people, campaign ads sponsored by tobacco companies instead focused on trouble the state could run into in trying to distribute the revenue, and pointed to a loophole in the law that might allow some research to be done outside California. California was once at the forefront of smoking restrictions and taxes, but the famously health-conscious state has not raised tobacco taxes since 1998. If the new tax had passed, California would have had the 16th highest tax rate in the nation.