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Small Tobacco Retailers Worry Prop. 29 Would “Shut Them Out”

Posted: Jun 04, 2012


SAN FRANCISCO—Carlos Solorzano, chief executive officer of the San Francisco-based Latin American and Caribbean Business Chamber of Commerce (LACBCC) says he firmly supports cancer research. He supports prioritizing smoking prevention education, especially for communities of color.

But neither he nor the LACBCC supports Proposition 29, a statewide tax increase proposal on cigarettes and tobacco products to be voted on in California’s presidential primary elections on Tuesday. The California Asian Pacific Chamber of Commerce and the California Black Chamber of Commerce are also against Proposition 29.

Interviews with Solorzano and other small business retailers who sell tobacco products in San Francisco revealed that most, but not all, oppose the measure.

The key reason for Solorzano’s opposition, he said, is that the California ballot initiative shuts small businesses out.

If it passes, he said, “You’re taxing big corporation, but not considering helping small businesses. They are hurting.”

“If the taxes were for California, we would understand, but that’s unclear. We need to invest in California small businesses--the state needs the money,” he said.

Solorzano’s concern is that the proposition’s language is misleading, lacks transparency and provides no guarantee that the $735 million annually in new taxes will “be spent in California to help the economy or fund education.”

Steep Prices to Pay

According to the Legislative Analyst’s Office of California, if Prop. 29 is passed, effective October 2012, the cost of cigarettes will increase by $1.87 per pack. Proposition 99 and Proposition 10, passed in 1988 and 1998 respectively, have generated the vast majority of tobacco-tax revenues.

If Prop. 29 passes, though, there will still be 22 states where cigarette-pack prices are higher than California’s. The average price of cigarettes in this state will increase to over $6. New York is ranked highest in the nation for cigarettes, where a pack costs nearly double that amount.

According to MapLight, a nonpartisan, nonprofit organization that tracks campaign finance, those opposing Prop. 29 have raised $46.7 million, with funding led by Philip Morris ($27.5 million contributed) and R.J. Reynolds ($11.2 million) tobacco companies.

The Yes on 29 Campaign, in contrast, has raised a total of $12.2 million, with The American Cancer Society and the Lance Armstrong Foundation giving $1.5 million. The bicycle champion has also appeared in the campaign’s advertisements.

According to the Public Policy Institute of California poll released May 23, just over half of likely voters say they would support Proposition 29, a big decline from March.

However, survey results from the Field Poll released last Thursday show that 50 percent of likely voters would support the measure, versus 42 percent opposed and 8 percent undecided.

Things Will Stay the Same”

John, a tobacco shop owner in San Francisco’s Civic Center Plaza, who declined to state his surname, but said he is an Afghan American, thinks passing Proposition 29, would be a “mistake.”

“I don’t support this cigarette tax or any cigarette tax,” he said.

Stressing that he is following the issue closely—and believes the proposition will pass—John asserted, “I think there is enough tax as it is. The truth is, if they want to make America safe, increase alcohol tax. Someone is involved in an automobile accident every 10 seconds, and a lot of that is because of drunk driving.”

“It wouldn’t solve anything,” he said. “What it’s [Proposition 29] trying to fix will stay the same.”

Tino Vercetti, a convenience store employee of European and Iraqi descent on Fillmore Street was also concerned that the government was not focusing on other health issues, such as obesity.

“You just keep raising taxes on cigarettes--nobody does anything about the fatty foods,” he contended.

Other small business owners, such as Moe Khatib, who owns the Smoke Shop on Haight Street, are more supportive of the proposition, although they acknowledge it won’t be good for business.

“This will hurt small businesses in general,” he said. “I can’t really predict where the money will go, but I assume there will be monitoring.”

“If money is going to treatment and research, it’s worth it,” Khatib said.

“Separate Issues”

Data on California tobacco use from the U.S. Center for Disease Control and Prevention show there are 3.6 million adult smokers and 200,000 youth who say they light up.

The statistics suggest smoking is greater in minority communities. For instance, the highest level of smokers in the Golden State is 18.9 percent among African American men.

The next highest rates are Hispanic men, 15.5 percent, and black women, 15.2 percent. Smoking among whites is slightly lower, at 14.3 percent for both men and women, with Asian males at 13.1 percent.

There are approximately 36,700 licensed tobacco retail stores in California. Research published in 2009 in the American Journal of Public Health, revealed that California has a higher density of tobacco retailers within one mile of urban schools and in predominately low-income, ethnic minority communities.

But “you need to separate these issues,” contended Allen Gutierrez, chief executive officer of The Latino Coalition, among the groups opposing Prop. 29.

“We are all for research. That is first and foremost,” he said. “However this proposition, it’s flawed,” Gutierrez insisted, asserting that the measure lacks “accountability and efficiency.”

Julian Canete, president and CEO of the California Hispanic Chamber of Commerce, commented, “We don’t oppose cancer research; there’s not a single family or individual who hasn’t been affected by this disease--we want to find a cure. The federal government spends $6 billion on cancer research--it’s not enough, but this is not the answer,” he said. 

Canete suggested that politicians raising campaign funding could also support fundraising for cancer research. Noting that Barack Obama and Hillary Clinton each raised close to $400 million for their 2008 primary campaigns, he said, “That’s almost a billion. Why can’t you do the same in cancer research?”

For small business owners and advocates alike, another essential component missing from Proposition 29 is smoking-cessation education with funds specifically allocated to California.

“In the past,” Solorzano of LACBCC said, “tobacco companies were obligated to give money to promote smoking cessation. Schools didn’t want the money because it was tobacco money, but we should use it for education. The research can only go so far,” he said.

“If there were a better-written proposition I think the opposition would be different, but right now there are too many red flags,” said Gutierrez of The Latino Coalition.

New America Media’s Zaineb Mohammed provided additional reporting for this article.





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