Just bought some stuff at the local CVS and noticed that brand-name cigarettes were a little more than $5 a pack, which is barely above Virginia/North Carolina prices. An additional $1 per pack (on top of the current 87 cents) – which would put California roughly at the national median – that would yield about $800 million per year in new revenue (after adjusting for reduced consumption due to higher prices). That would (for example) allow the state allocation to University of California budget to get most of the way back to its pre-Crash levels, which would be adequate to prevent the otherwise-inevitable slide into mediocrity.
The reduction in smoking would have noticeable health benefits. Assuming that an additional dollar in tax led to roughly a 20% increase in retail price and assuming a price-elasticity of demand of roughly -0.4 means an 8% decrease in smoking. If we take national annual cigarette-related mortality to be 430,000, the population of Californiate to be 12% of the national population, and the California smoking rate to be about 3/4 of the national average, we have, in steady state:
430,000 x .08 x .12 x .75 = just over 3,000 lives per year saved, plus reductions in non-fatal disease.Sounds like a pretty good package to me.
California has an unusually good system for collecting tobacco taxes, which ought to keep the evasion problem under control.
With solid Democratic majorities in the legislature and a Democratic governor, this ought to be doable, though I doubt they’d want to give UC any of the money. But if the tobacco lobby makes a legislative fix impossible, then how about an initiative for 2016?