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Wednesday, Sep 28, 2022
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Proposition 86 Fails; Would Have Changed the Business of Hospitals

The statewide Proposition 86, which could have raised $2 billion annually for health care, failed with roughly 52 percent of voters opposed in the Nov. 7 election.

Proposition 86 would have raised the price of a pack of cigarettes by $2.60, bringing the average price of a pack to almost $7. California’s current tax on cigarettes is lower than about half the states.

Some 52 percent of California voters, or 3,492,048 people, voted against the measure, which would have helped hospitals improve emergency care and fund smoking cessation programs.

R.J. Reynolds Tobacco Co., the Cigar Association of America and Philip Morris USA Inc. had laid down at least $7 million as of August to defeat the measure.

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Commercials aired by the anti-Proposition 86 campaign said the ballot measure included antitrust language that would allow hospitals to price-fix.

Jesse Markham Jr., who oversees the firmwide antitrust practice at Morrison & Foerster LLP and is an adjunct professor of antitrust law at the University of San Francisco Law School, has said the language in the initiative would have exempted hospitals from some parts of federal and state antitrust law to allow them to share specialists, especially emergency personnel. However, he said the exemption could not likely allow price fixing.

Voting for the proposal were 3,211,946 Californians, or 47.9 percent of voters.

Besides big tobacco, those opposing the tax included mostly retailers, taxpayer groups and some law enforcement agencies worried about increased smuggling. The Food and Beverage Association of San Diego and the Deputy Sheriffs Association of San Diego County opposed the tax.

Funding for the tobacco tax initiative came from the California Hospital Association, the American Cancer Society, the American Heart Association, the California Emergency Nurses Association and the Campaign for Tobacco Free Kids.

, Katie Weeks

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