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A record amount of advertising underwritten by the tobacco industry overwhelmed supporters of expanding health coverage to children in Oregon Tuesday, as voters rejected an 84.5-cent-a-pack increase in cigarette taxes. The resounding defeat for the tobacco tax -- which lost 60-40 percent -- in a predominantly Democratic state is a boost for an industry that is pressing Republicans to hang firm in the congressional debate over the State Children's Health Insurance Program. Democratic attempts to expand SCHIP are funded with a proposed 61-cent-per-pack increase in the federal cigarette tax, which would bring the federal tax total to $1 per pack. "You'll be hearing about it everywhere," predicted Stanton Glantz, director of the Center for Tobacco Control Research and Education at the University of California, San Francisco, and a longtime foe of the tobacco companies.
Philip Morris and Reynolds American, two giants of the tobacco industry, spent at least $11.8 million on what became the most expensive campaign in Oregon history. That amounts to about $6 per registered voter, which Glantz said was probably the highest rate ever spent by the industry fighting any anti-smoking ballot measure. The industry spent $4.17 a voter defeating a proposed $2.60-cent-a-pack increase in California in 2006. Democratic Gov. Ted Kulongoski had pushed hard for the tobacco tax, which he wanted to use to extend healthcare coverage to the estimated 116,000 children in Oregon who are without it. Supporters raised $3.3 million for their campaign. Little objection was raised to expanding health care to children. Instead, the opposition raised doubts about whether the money would indeed go to children's health care and slammed the measure for putting the tobacco tax in the state constitution.
Leaders of the Democratic-controlled Oregon Legislature resorted to a constitutional referral to voters only after they could not muster enough Republican votes to simply raise tobacco taxes or to refer it to the ballot as a statutory measure. In Oregon, a three-fifths majority is needed for the Legislature to pass tax increases or refer proposed statutory tax increases to the ballot. But constitutional tax referrals only need a simple majority.
In an interview with the Associated Press, Kulongoski said he still thinks most Oregonians support an expansion of children's health care but were heavily influenced by the advertising. "What happened was, the tobacco industry bought the election," he charged. He said he would continue to press to expand coverage. But Russ Walker, who heads the Oregon chapter of FreedomWorks, an anti-tax group, argued that it was not the expensive campaign that made Oregonians skeptical. "The primary reason is there's not an appetite out there for more taxes," he told the Portland Oregonian. In fact, despite the state's Democratic leanings, voters almost always vote down tax increases at the state level. The only exceptions in recent years were smaller tobacco tax hikes in 1996 and 2002.