California Cigarette Sales Plunge After New Tax
Anti-smoking activists Monday hailed news that cigarette sales in California fell by 30 percent in the first half of 1999, as higher state taxes and tobacco company price hikes pushed up the cost of cigarettes to as much as $4 per pack
``It's beyond our expectations,'' said movie director Rob Reiner, who led the ballot battle to pass Proposition 10, the extra 50-cent-per-pack tax California implemented in January to help fund children's educational programs.
``I think it's terrific. We clearly are reducing smoking,'' Reiner told Monday's San Jose Mercury News.
Figures released by the California Board of Equalization, a tax supervisory board, showed that based on tax receipts the number of cigarette packs sold during the first six months of 1999 was about 30 percent less than the number sold during the same period in 1998. In June 1999, about 117 million packs were sold around the state.
Officials attribute part of the drop to the rise in cigarette prices, which may have persuaded smokers to quit.
Along with the new state tax, tobacco companies have raised prices by some 63 cents per pack to help pay their $206 billion health claims settlement with 46 states -- meaning that cigarettes that cost an average of about $2.55 a year ago now can cost as much as $4.
But the board also said that some California smokers may be trying to avoid the new tax by buying cigarettes over the Internet or out of state.
``I would think there is a major increase in evasion,'' said Vic Day, a supervisor with the equalization board.
Even before the new tax went into effect, California cigarette sales peaked at almost 200 million packs in December 1998 as smokers stockpiled in anticipation of the price rise