On November 8, Californians head to the polls. Among the 17 ballot propositions they are voting on is Prop 56, “Cigarette Tax to Fund Healthcare, Tobacco Use Prevention, Research, and Law Enforcement. Initiative, Constitutional Amendment, and Statute.”

According to California’s official voter guide, this is what Prop 56 entails:

Increases cigarette tax by $2.00/pack, with equivalent increase on other tobacco products and electronic cigarettes containing nicotine.


Allocates revenues primarily to increase funding for existing healthcare programs; also for tobacco use prevention/control programs, tobacco‚Äźrelated disease research/law enforcement, University of California physician training, dental disease prevention programs, and administration. Excludes these revenues from Proposition 98 education funding calculation requirements.

But in reality...

Hidden in the language of Prop 56 is an extension of the definition of tobacco products, subjecting vaping products to tobacco tax for the first time. E-cigarettes that contain nicotine or liquid with nicotine (known as e-liquid) are now classified as tobacco products for the purpose of this ballot measure. Changing the definition in this way causes the $3.37 equivalent tax to apply to these items as well.

When you do the math...

Prop 56 will result in a 68% rise in tax on e-liquids, nearly tripling the price.

This measure targets the vaping industry in a misguided effort to passively close them down. It will shutter small businesses for good, disregarding the potential for reduced harm in traditional smokers.

The projected revenue from Prop 56 is $1.4 billion dollars. So where is that money going? The language sounds straightforward enough, and who doesn’t want to help smokers? Except that’s not quite the case.

Backers of the measure claim it will raise $1.4 billion for health care, and tobacco cessation and prevention education. They use words like "double" and "triple" the funding. The truth? Prop 56 designates only 13% of the revenue for these programs. In contrast, the remaining 82% is reserved for the very same backers. Health insurance companies and hospitals. And, up to 10% - nearly the same amount for education - is designated for administrative costs with little to no oversight.   

The yes vote claims that the measure will prevent fraud and misuse of taxpayer money by requiring audits of bureaucrats and politicians charged with dispersing the funds. However, they fail to mention that health insurance companies are specifically exempt from any audits or accountability on how the money is spent.

Prop 56 claims that the tax will work like a "user fee," effectively requiring smokers and other tobacco users to defray the medical costs of smoking-related diseases, with most money going to Medi-Cal, California's low-income health provider. Except there are no requirements to add new patients. And, provisions are written into the state budget to increase the existing payments to insurance companies.

There is no way to measure monies going to patient care, and no accountability for spending.

In addition, this "user fee" disproportionately targets poor and at-risk communities, the largest demographic of smokers and tobacco users. In California, making under $25,000 a year doubles the risk of smoking when compared to those Californians who earn more than $50,000 a year. (According to the federally funded Health Education Council). While a sharp increase in taxes does cause a small decrease in the number of smokers, it has not been shown to be a true deterrent for heavy smokers. Instead, it places an outsized financial burden on an already burdened population.

And finally, research from the non-partisan Tax Foundation shows a sharp increase in tax on tobacco products doesn’t always deter people, and in fact, results in defacto prohibition, increasing black market and criminal activities surrounding the sale of tobacco products.

Next, supporters of Prop 56 claim to protect children by adding funding for smoking prevention and control and taxing e-cigarettes and e-liquid. What they don’t mention is that Prop 56 is expressly written to circumvent Prop 98, a measure requiring 43% of tax revenue to go education. By doing this, they cheat California's schools out of $600 million yearly. Only 13% of the revenue raised is allocated for actual cessation programs, with the rest of the money spread among health insurance companies and hospitals.

It is important to note here that it is disingenuous and misleading to claim that the vaping industry is specifically advertising to children when there is a myriad of adult products designed with sweet flavors and palates in mind. The number one youth issue in America is alcohol abuse, and no one is suggesting an outright ban or prohibitive tax on sweet alcoholic beverages. The simplest way to discourage youth smoking and vaping is regulation of the sales to and use by minors (Which has been done in California.)

By targeting the vape industry as a way to prevent teen smoking...

Prop 56 undercuts the positive impact vaping has had on smokers looking to quit.

Lastly, it is important to note the potential hidden and disastrous effects on the vaping industry if Proposition 56 passes. Including vape products into the language of Prop 56 triggers a 2009 floor stock tax. If the tax on vaping products increases by 68%, that requires store owners to make a one-time payment of 68% of inventory. Most small businesses are not in a position to make this kind of large cash payment. Passing Prop 56 effectively shuts doors on these small businesses in the community, and, as mentioned, contributes to an uptick in black market and criminal activity.

At this point, if you don't vape, or smoke, you might be thinking, "Why do I care?" If Prop 56 passes, what prevents the state government from levying taxes on products deemed a health risk? If the focus is on reducing health care-related costs by raising taxes, what stops them from taxing fast food, soda, and candy to prevent obesity? Prop 56 opens the door to any number of arbitrary "nanny taxes."  Your vote matters!

Conclusion: Vote NO on special interest groups interested in more money for existing patients, rather than helping California's children, keeping healthcare affordable and expanding coverage, and addressing realistic ways (vaping) to help smokers quit.