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Proposition 99 Emerges
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The Coalition for a Healthy California

Several events in September and October 1986 gave the tax effort additional momentum and legitimacy. Mekemson persuaded Assembly Member Lloyd Connelly (D-Sacramento) to join the effort. Connelly, a highly respected figure in the Assembly, brought a significant leadership presence to the tobacco tax effort, both organizationally and politically. He was drafted into the effort over a breakfast. According to Mekemson,

Lloyd was along. Connelly was a longtime friend and acquaintance of mine and he called me up and said he wanted me to tell him Alaskan bear stories because he's into all this wilderness stuff. …So we had breakfast at the Fox and the Goose and I told Lloyd all the bear stories. And he wanted to know what I was doing. And I said, “Well Lloyd, I think I want to take on this tobacco tax issue.”…What caught Lloyd's attention…was the impact that increasing the tobacco tax would have on reducing tobacco use among kids. Bringing Lloyd on brought in a lot of credibility to the effort, and his own incredible energy and ability to organize things. …And he committed one of his staff people to working with us.[1]

Over breakfast, Connelly said it was hopeless to get a tobacco tax increase through the Legislature. He was willing to be involved only if the groups were willing to press ahead with an initiative.[3] Proposition 99 was born.

Meral used his political skills to broaden the range of groups interested in increasing the tobacco tax. He convinced the Senate Office of Research to hold an informal meeting on October 14, 1986, with representatives from the PCL, ALA, ACS, ANR, California Teachers Association, Senate Revenue and Taxation Committee, California Medical Association (CMA), Connelly's office, and the Senate Office of Research itself. This informal meeting served several purposes: it increased the tax effort's legitimacy, defined the potential participants of a coalition, and provided a forum in which to discuss strategies and goals early in the process.

Most of the research and organization, however, was still done by the ALA, ACS, PCL, and Connelly's office. Mekemson and Najera set the agenda for the meeting by preparing a draft paper that identified the specific issues and requirements for passing a tobacco tax increase.[4] Their paper raised the following questions.

  1. What was the case for increasing the tax? There were three distinct supportive arguments: the impact on smoking and health, the po
    enefits from programs supported by the new revenues, and the high economic costs of smoking. In addition, the time was ripe. California's cigarette tax of ten cents had not been increased since 1967. Every other state except Virginia had increased its tobacco tax since 1967; only six other states had lower taxes than California, and four of those were tobacco producing states.
  2. Which is the best approach for increasing the tax—an initiative or the Legislature? Because of the tobacco industry's lobbying power in Sacramento, enacting a tax increase through the Legislature seemed hopeless since it had defeated thirty-seven bills to do so since 1967. Although an initiative meant mounting a major election campaign against the tobacco industry, it seemed to be the only way to increase the tax. In spite of the failure of previous statewide initiatives—Propositions 5 and 10—conditions seemed favorable for this one. Public attitudes toward smoking were changing and there was a large societal cost associated with smoking. In addition, by using the initiative process, the proponents could decide the amount of the tax increase and how the money would be spent. Proponents felt that, with careful crafting of the initiative, it would be possible to build public support for the tax.
  3. How much should the tax be increased and how should the new revenues be allocated? Early discussion considered an increase of twenty cents to forty cents per pack. A high tax was favored because it was felt that it would have the largest impact on tobacco consumption and generate the most revenues, but too high a tax might invite criticism and loss of public support. The ALA estimated that a 10 percent increase in the price would lead to a 14 percent drop in tobacco consumption and that every one-cent increase would generate $25 million in new revenues. Three important points were raised regarding revenue allocation: How could the money be used to have the greatest impact on tobacco consumption? How could the money be allocated to gain support from interest groups whose backing would be necessary to win? How could the money be used to generate the broadest public support?
  4. What are the technical aspects involved in running an initiative? Qualifying the initiative would be a difficult task, followed by an even more difficult election campaign. This process would require employing a professional campaign director, conducting polling to determine campaign strategy, and hiring professional signature-gatherers, all of which represented substantial financial and organizational commitments.


From the beginning, the public health and environmental advocates had problems with the CMA. Jay Michael, CMA's vice president for government relations, tried to limit participants in the planning effort. From the beginning he tried to exclude the more politically sophisticated Connelly and the PCL so that he would have to deal only with the voluntary health agencies, which lacked the political muscle and sophistication that Connelly and Meral had. According to Mekemson, who was trying to help organize the coalition,

What we ran into with the CMA was they were concerned about the breadth of the coalition that we were developing. In other words, they didn't want Lloyd [Connelly] involved in it; Jay didn't want Lloyd involved in it. They didn't want the environmentalists involved in it. It seemed to be okay as long as it was Heart, Cancer, Hospitals, so forth and so on.

And of course, I insisted on continuing to involve Gerry [Meral], I mean it was Gerry's initial idea. And obviously Lloyd. Lloyd brought in his power and wonderful ability to analyze things from a political perspective, and his experience with initiatives as well as Gerry. …One day we had an incredible meeting. Jay called me up, and he said he didn't want Lloyd or Gerry at the meeting, and I insisted on it. And he insisted right back. So finally I had agreed that I would show up with Tony [Najera of ALA] and Betsy [Hite of ACS] and we could all sit down and work it out but they are going to be involved. Well, I just beat Gerry there. I waited outside CMA's offices on a hot day. I said, “Gerry, here's the situation.” Then Lloyd came along and I said, “Lloyd, here's the situation.”

And Lloyd just got that look in his eyes and said, “No way,” he marched in, left us standing outside. I don't know what he said to Jay, but when we walked in, Jay was pissed. Obviously absolutely infuriated. Because Lloyd comes back out and says, “Come on in, Gerry. I worked it out.”…That was the last meeting we had at the CMA building because…. put them right over here [at ALA of Sacramento–Emigrant Trails], not on neutral ground, on our ground.[1]

On November 20, 1986, Connelly sent a letter inviting potentially interested organizations to join the effort to increase California's tobacco tax and cited three objectives of the tax: to reduce teenage smoking, to raise revenues to fund public awareness campaigns, and to reduce the overall suffering and financial burden caused by tobacco.[5] On December 4, 1986, Connelly hosted a meeting to identify organizations that might support the tobacco tax effort.

Prior to this meeting, George Williams, executive director of the ALA of California, and the ALA board of directors set the standard of commitment by providing $50,000 to support the tobacco tax effort. This

very large (for a voluntary health agency) financial commitment showed the ALA's dedication to the effort and forced other agencies to be ready to make the same financial commitment. Mekemson saw this early and substantial commitment as a key factor in establishing a significant anti-tobacco education component of the emerging initiative. He observed,

It said to everybody out there, “This is really a serious proposition,” and that's what we had to accomplish. In other words, we had to show…that this was something that's going to happen. But the other important thing that the $50,000 does is that it really bought the American Lung Association a seat at the table. For any negotiations that took place or happened, we would be a key player. That became important, especially when we decided to divide up the pie…we kept running up against CMA, who would say, “Certainly some money should go into education. How about five percent [of tobacco tax revenues]?”…So between having the $50,000 contribution from ALAC, and the fact that we started the whole process, and the fact that the poll supported it, those were the chips I needed to get 20 percent set aside for prevention in that very intense battle that we had.[1]

The California Association of Hospital and Health Systems (CAHHS) and the CMA, both major political forces in the Legislature, were now willing to join the tobacco tax effort. The support of these two medical organizations was viewed as significant because of their credibility, their potential to provide money, and their link to individual hospitals and doctors throughout the state. Hite remembered that Jim Nethery, a dentist who was president of the ACS California Division, worked to involve the CMA.

There was a lot friction with all of the groups and CMA. Categorically it was the groups and CMA. The CMA changed their direction a number of times. We had verbal promises from their president [Dr. Armstrong] at the time. …He and Dr. Nethery, who was the president of the American Cancer Society at that time, had a number of discussions that CMA was completely behind us, they'd spend whatever it would take to get it through; it was a really good public health policy to try and discourage smoking by raising the tax and by dedicating some of those funds to education. As we went further and further along in the drafting over the next eight months, CMA became less willing to commit resources and more willing to take the benefits.[6]

The health groups did not know that key CMA leaders were actively working with tobacco interests on economic issues that were important to organized medicine, particularly malpractice and tort liability issues, at the same time as they were meeting with the health groups.[7] In the end, common economic interests with the tobacco industry would dominate the CMA's decision-making process. In the meantime, it was in the

CMA's interests to push the tobacco tax initiative, both as a way to increase the pool of money available to pay for medical services and as a bargaining chip with the tobacco industry in negotiations over malpractice reform and tobacco products liability.

Mekemson and others had approached ANR and the other leaders in the fights for Propositions 5, 10, and P, but they declined to get actively involved. As Hanauer explained, “We were deathly afraid that we couldn't win a statewide initiative. …I got snake bitten twice and I wasn't in the mood to try a third time…Fortunately there were other people who were willing to do that, and were able to bring fresh blood into that kind of campaign. Stan Glantz and I and Paul [Loveday] shuddered at the thought of even getting involved, much less working forty, fifty hours a week at that point on a statewide campaign.”[8]

ANR supported the concept of a tobacco tax but did not think it could pass.[1][9] ANR took the position that any new state-level initiative would meet the same fate as Propositions 5 and 10: the public's strong early support would wither in the face of the tobacco industry's expensive counter-campaign. ANR was also offended that the large, wealthy organizations that were setting up the campaign demanded a contribution of $25,000 from ANR (at the time, a four-person operation with a budget under $200,000) for the privilege of sitting on the Executive Committee.[10] In addition, the local ordinance strategy adopted by ANR and other grassroots organizations was producing important successes at the local level. As already noted, by the end of 1986, 263 local tobacco control ordinances were in place, 117 of which were in California, and ANR did not want to put its energies into a statewide campaign.

By early January 1987, an informal coalition was ready to attempt to increase California's tobacco tax. The Coalition for a Healthy California consisted of the ALA, AHA, ACS, CMA, PCL, CAHHS, and Lloyd Connelly.

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Proposition 99 Emerges
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